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Sonatrach and Total in discussion again about Arzew Petrochemical Complex

Qatar Petroleum holds 10% of $3 billion Arzew project

Since Total and Sonatrach had announced the giant Arzew petrochemical complex, the project had to be put on hold by the lack of ethane as feedstock to supply the cracker.

This ethane should come from the Hassi R’meil natural gas fields, but transportation along the 500km to Arzew petrochemical complex site requested deeper evaluations than expected.

Anyway in the meantime Algeria voted the 51/49 bill to impose by law that Algerian companies should have at least 51% stake in joint ventures.

Thus Qatar Petroleum (QP) was introduced in the joint venture to adjust the previous share holding Total (51%) Sonatrach (49%) to the new regulation.

Today the partners share working interests as following:

 – Sonatrach 51%

 – Total 39%

 – QP 10%

Sonatrach, Total and QP are planning to invest $3 billion capital expenditure in this olefins complex.

Sonatrach, Total and QP to build 1.4 million t/y cracker

The ethane cracker is designed with a capacity of 1.4 million t/y to produce 1.1 million t/y of ethylene.

Then the ethylene should be used as feedstock for three polyolefins production lines:

 – 450,000 t/y of linear low density polyethylene (LLDP)

 – 350,000 t/y of high density polyethylene (HDPE)

 – 410,000 t/y monoethylene glycol (MEG)

Alike Qatar, Algeria is looking for diversifying its revenues in producing higher added value petrochemical products in order to reduce it reliance on low natural gas market prices.

These low gas prices give a competitive advantage to Algeria in producing costs competitive hydrocarbon products to be exported, but in the same time they make more difficult the financing of such large project.

In 2010, Sonatrach and Total had called for tender the front end engineering and design (FEED) of the Arzew petrochemical complex project.

Engineering companies submitted offers for this FEED but the whole bidding process was stopped when the project was shelved.

At that time the project was due to come for completion and commercial operation in 2014.

This Arzew petrochemical complex is not the only one to have been stopped because of the lack of gas feed stock.

Sonatrach is also planning a $850 million methanol plant and a $600 million integrated propane dehydrogenation and polypropylene complex, both in Arzew.

Within the center of Algeria, in Sahara region, four fields, Touat, Ahnet, Timmimoun and Reggane North are able to deliver 13.1 billion cubic meter per year of natural gas to these  petrochemical projects in Arzew.

In this context, all the conditions are converging to help Sonatrach and its partners Qatar Petroleum and Total  Sonatrach in finding solution on the gas pipeline in the near future to let move all the Arzew petrochemical projects on again. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

1 Comment to “Sonatrach and Total in discussion again about Arzew Petrochemical Complex”

  1. As per my experiences in Qatar spent as production in olefins process, I found that this new project cracker in Arzew is very benefit for the partners in the future.

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