Total said it signed deals with Algeria’s Sonatrach that will see the companies jointly develop the Erg Issouane gas field and set up a new joint venture for a petrochemical project in the North African country.
As part of a comprehensive partnership announced earlier, Total, Sonatrach and Alnaft (the National Agency for the Valorization of Hydrocarbon Resources) with jointly develop the Erg Issouane gas field located on the TFT Sud permit.
The TFT Sud permit is located south of the Tin Fouyé Tabankort (TFT) field, of which Total is a long-standing partner.
Sonatrach (51 per cent) and Total (49 per cent) will develop the reserves of Erg Issouane located on the TFT Sud permit estimated at more than 100 million barrels of oil equivalent (boe). The development, which represents an investment of around US$400 million, will be tied back to the existing TFT gas treatment unit by a 22-kilometer-long gas pipeline.
First gas is expected late 2021, Total said. The partners have also signed a gas marketing agreement. The concession contract will become effective upon approval by the Algerian authorities.
Meanwhile, Sonatrach and Total also signed a shareholder agreement to create a joint venture known as STEP (Sonatrach Total Entreprise Polymères).
STEP will be responsible for carrying out a joint petrochemical project in Arzew, western Algeria. The project includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tons per year.
The two partners (Sonatrach 51 per cent, Total 49 per cent) are planning to start the front-end engineering and design (FEED) from November. This project will allow to valorize the propane, produced in large quantities locally, by transforming it into polypropylene, a plastic for which demand is growing strongly.
“Today’s agreements mark a new milestone in the development of the strategic partnership between Sonatrach and Total to continue developing the country’s gas reserves by providing the best of our technological expertise,” said Patrick Pouyanné, chairman and CEO of Total.
Earlier this year, Total started up production from the Timimoun gas field in southwestern Algeria. The group has a 37.75 per cent interest in the field, which has a production capacity of 5 million cubic meters of gas per day (around 30,000 boe/d).