Algerian oil and gas company Sonatrach signed a contract with Spanish firm Tecnicas Reunidas for engineering and consultancy studies for its new Skikda refinery processing plant in the north-east of the country, chief executive Amin Mazouzi said.
The plant would process 4.6 million tonnes of fuel oil and 4 million tonnes of naphtha for a yearly output of 3.2 million tonnes of diesel and 3.5 million tonnes of gasoline, Sonatrach's CEO said at a news conference, according to media reports.
Sonatrach CEO Amin Mazuzi said the contract, part of the company’s five year development plan, will strengthen Sonatrach's ability to produce refined petroleum products to meet the current and future needs of the domestic market. It will last for 42 months divided into three phases of 7, 5 and 30 months.
"The signing of this contract marks the integral launch of Sonatrach's refining program. We congratulate Técnicas Reunidas for having obtained this contract after a competition with nine major companies in the oil and gas sectors," said the manager.
During the first two months, the Spanish company will be in charge of basic engineering works and then will call a competition for its development under the supervision of Técnicas Reunidas.
The Spanish firm’s deputy president Manuel Alabart expressed his hope that this initiative will also serve to materialise other projects that his company is studying with the largest Algerian hydrocarbons company, both in terms of engineering and construction supervision.
Sonatrach also contracted British-based Amec Foster Wheeler for the preparation of basic feed studies for its second new plant, in Arzew, that would 75,000 tonnes per year of methanol and 150,000 tonnes per year of butane.
Algeria is a major oil and gas producer but imports an estimated $1.4 billion per year of gasoline products. The North African OPEC member is trying to save money on imports after being hit by the fall in global oil prices.
"The two refineries will transform us from a net importer to an exporter of refined products," said Sonatrach vice president Akli Remini.
The cost of the two studies was put at about 25 million euros ($26 million).