Meed | Algeria cancels $1.3bn refinery contract and makes new award

Algeria cancels $1.3bn refinery contract and makes new award

6 December 2024

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Algerian state energy producer Sonatrach has cancelled its $1.3bn contract with South Korea’s Samsung Engineering for the planned $3.7bn Hassi Messaoud refinery project in Algeria, and replaced it with China’s Sinopec.

Samsung Engineering confirmed the contract’s cancellation on 28 November without specifying the reason.

Sonatrach officially signed the main contract award for the Hassi Messaoud refinery with the consortium of Samsung Engineering and Tecnicas Reunidas in January 2020.

Since then, little progress has been made on the project due to various factors, including the Covid-19 pandemic, which caused significant disruption to the project.

Spanish newspaper CincoDias reported that China’s Sinopec has replaced Samsung Engineering on the project.

Spain’s Tecnicas Reunidas is still participating in the project, according to industry sources.

In August this year, MEED revealed that only some preliminary engineering work had been finished and the project was about 5% complete.

In 2023, Sonatrach restarted talks with the consortium that won the contract to execute the Hassi Messaoud refinery project to get it moving, but they were unsuccessful.

Talks were reinstated in 2024, but these were also unsuccessful.

In August, MEED revealed that Samsung Engineering and Tecnicas Reunidas had asked for amendments to the original deal due to the significant increase in building material prices since the original contracts were signed, which implies the project cannot be completed with the same budget.

At the time, a source said that the consortium wanted more money to account for inflation since 2020, when the contracts were signed.

In July this year, the vice-president of refining and petrochemicals at Sonatrach, Slimane Slimani, said that his company aimed to bring the facility online before the end of 2027.

Industry sources say this target will be difficult to achieve given the extensive delays and disruption that the project has suffered.

Speaking on Radio Algerienne Chaine 3 in July, Slimani said that Sonatrach had officially revived the project, and its execution was aligned with the company’s broader strategy for the country’s downstream sector.

He said the refinery project is estimated to produce an extra 2.7 million tonnes of diesel fuel and 1.2 million tonnes of gasoline a year.

When Sonatrach first announced the project, it was part of Algeria’s $14bn strategic downstream capacity expansion programme, which included the construction of five new refineries.

Under the terms of the original contracts signed in 2020, contractors were required to execute the works on a lump-sum turn-key basis.

Prior to the delays, the work was expected to be completed in about 52 months and conclude in the first quarter of 2025.

The scope of work includes building process and utility units; a crude distillation unit/vacuum distillation unit; a continuous catalytic reforming unit; an isomerisation, naphtha hydro-treating unit; a hydro desulphurisation unit; and a hydrocracker unit, as well as utility systems.

In recent years, Algeria’s $14bn strategic downstream capacity expansion programme has been scaled down and delayed.

Initially, Sonatrach awarded the front-end engineering and design contract for three refineries to London-based Amec Foster Wheeler in 2016.

These three refineries were located in Hassi Messaoud, Biskra and Tiaret.

Under the original $14bn plan, a further two refineries were to be added later.

Budget issues in 2017 put the Biskra refinery on hold so that Sonatrach could focus on moving forward with the Hassi Messaoud and Tiaret refineries.

Then, in 2018, Sonatrach cancelled the tendering process for the Tiaret refinery following a major downstream review.

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Wil Crisp

Exclusive from Meed

KBR seeks renewable energy contracts in Libya
29 September 2026
Sharakat receives bids for Riyadh East sewage treatment plant
29 September 2026
Egypt firm wins Al-Dabaa desalination O&M contract
29 September 2026
Oman awards exploration blocks to state upstream firm
28 September 2026
Saudi Arabia qualifies firms for gas-fired IPPs
28 September 2026

KBR seeks renewable energy contracts in Libya
29 September 2026

The US-headquartered technology and engineering company KBR is seeking renewable energy project contracts in Libya.

Representatives from KBR met with Abdussalam Elansari, chairman of the Renewable Energy Authority of Libya, earlier this month to discuss project opportunities, sources said.

The meeting with Elansari followed KBR’s opening of a new branch in Libya and its securing of several contract awards in the oil and gas sector.

In March, KBR announced that it had been awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the South Refinery Project in Libya’s southern city of Ubari.

Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the engineering, procurement and construction (EPC) phases of the project, according to a company statement.

The EPC work is expected to be executed over a 50-month period.

KBR is also carrying out work to re-evaluate the front-end engineering and design (feed) for the project to develop Libya’s J6 North Gialo field.

In January, KBR signed a memorandum of understanding (MoU) with the state-owned Libyan Post, Telecommunications & Information Technology Company.

Under the MoU, KBR agreed to support efforts to develop and improve Libya’s communications infrastructure and enhance fifth-generation (5G) mobile networks in the country.

KBR has previously provided engineering services for major national projects in Libya, but was forced to shut down its office in the country several times amid political instability and security issues.

When the company was known as Brown & Root, it worked on the Great Man-Made River Project in Libya, which is widely recognised as the largest irrigation project in the world.

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Wil Crisp
Sharakat receives bids for Riyadh East sewage treatment plant
29 September 2026
Saudi Arabia’s state water offtaker Sharakat has received bids for the contract to develop the $150m Riyadh East independent sewage treatment plant (ISTP).

Bids were submitted on 28 September.

The plant will have a treatment capacity of 200,000 cubic metres a day (cm/d) in its first phase, expanding to 500,000 cm/d in the second phase.

Five consortiums made offers, including:
- EtihadWE (UAE) / Metito (UAE) / Thrustboring Construction Company (TCC, Saudi Arabia)
- GS Inima (Spain) / Alkhorayef (Saudi Arabia)
- Lamar (Bahrain) / China Harbour Engineering Company (CHEC)
- Miahona (Saudi Arabia) / Marafiq (Saudi Arabia) / Bin Omairah Holding (Saudi Arabia)
- Suez (France) / Civil Works Company (Saudi Arabia) / Alwael (Saudi Arabia)
In May, MEED exclusively reported that groups had begun to form for the project, which will be developed under a build‑own‑operate‑transfer model with a 25‑year concession term.

It is understood that at least two other potential consortiums weighed up making an offer for the contract, but did not bid.

In 2024, Sharakat prequalified 53 companies that could bid for the Riyadh East ISTP, part of seven planned ISTP projects it said it would procure between 2024 and 2026. The request for proposals was issued last October.

WSP is the technical adviser, and KPMG Middle East is the lead and financial adviser.

The targeted commercial operation date for the facility is 2029.
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Mark Dowdall
Egypt firm wins Al-Dabaa desalination O&M contract
29 September 2026

Elsewedy Utilities has been awarded a three-year operation and maintenance (O&M) contract for a seawater desalination plant in Al-Dabaa on Egypt’s north coast.

The plant has a production capacity of 40,000 cubic metres a day (cm/d), and the contract runs for three years.

The award reflects Egypt’s increased focus on involving local private sector companies in operating and maintaining existing seawater desalination plants.

In March, Egypt’s Ministry of Housing, Utilities & Urban Communities directed that a number of existing desalination plants with capacities of more than 10,000 cm/d be offered to specialised local private sector companies for O&M. The plants include facilities in Al-Dabaa, Matrouh and El-Alamein, as well as sites in the Red Sea region and North and South Sinai.

The government said the move is intended to improve operating efficiency, strengthen maintenance systems and make greater use of specialised technical expertise. The contract value was not disclosed.

Elsewedy Utilities is the utilities and facilities management arm of Elsewedy Electric, with activities spanning engineering, procurement and construction, O&M and utility management.

As MEED understands, the contract is separate from the South Med desalination project at Al-Dabaa, which is being developed for the Engineering Authority of the Armed Forces’ Water Management Department.

Elsewedy Electric Infrastructure previously announced it is the main engineering, procurement and construction contractor for the planned 160,000-cubic-metre-a-day seawater reverse-osmosis plant.

Cairo-headquartered Engineering Experience Group also won a design and engineering services contract for the project in June.

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Mark Dowdall
Oman awards exploration blocks to state upstream firm
28 September 2026

Oman’s Ministry of Energy & Minerals (MEMR) has awarded state-owned upstream firm OQ Exploration & Production (OQEP) exploration rights for three hydrocarbon blocks in the sultanate.

OQEP, which is 75% owned by Omani state energy group OQ, has secured rights for Blocks 36, 43A and 66.

Under the agreements, OQEP will conduct geological and geophysical surveys, analysis and modelling, and drill exploratory wells at the three blocks, with the aim of developing recoverable reserves.

Neither MEMR nor OQEP disclosed the blocks’ locations, areas or prospective reserves in their statement.

OQEP’s portfolio comprises 14 upstream oil and gas exploration and production assets in Oman, covering onshore and offshore operations and assets held under service contracts.

Formerly known as Oman Oil Company Exploration & Production, OQEP’s flagship assets include Block 60, which contains the Abu Tubul and Bisat oil fields, and Block 48. The company also holds strategic interests in gas-producing Blocks 9, 10 and 61.

Offshore expansion

OQEP has been expanding its offshore exploration portfolio. In February, the company acquired a 30% participating interest in offshore Block 18, following MEMR’s award of exploration rights to a joint venture between OQEP subsidiary OQ Exploration & Production Al-Batinah Offshore and PC Oman Ventures, a wholly owned subsidiary of Malaysia’s Petronas.

Located off Oman’s northeastern coast, Block 18 covers more than 21,000 square kilometres in the Sea of Oman, with water depths ranging from 50 metres to 3,000 metres. No confirmed discoveries have previously been reported in the block.

ALSO READ: Concession deals boost momentum in Oman mining

Under the concession agreement, Petronas holds a 70% participating interest and operatorship, while OQEP holds the remaining 30%.

OQEP has also expanded its producing portfolio through the acquisition of a 35% interest in onshore Block 27 from Japan's Mitsui E&P Middle East in April. The transaction was valued at RO28.8m ($75m).

Block 27 is operated by US-based Occidental Petroleum, which holds a 65% participating interest under an exploration and production-sharing agreement valid until 2035.

OQEP expects its interest in the block to contribute approximately 3,500 barrels of oil equivalent a day (boe/d) in additional net production this year.

In June, MEMR signed an with OQEP and state-owned Turkiye Petroller AO (TPAO), granting the companies exclusive exploration, appraisal, development and production rights for offshore Block 80.

The block covers approximately 5,737 sq km in the Gulf of Oman, near the Strait of Hormuz and off Musandam governorate. It includes the producing Bukha and West Bukha oil and gas fields.

The agreement stipulates a minimum exploration investment commitment of $90m over an initial eight-year exploration period. The work programme is divided into two phases to evaluate the block’s hydrocarbon potential.

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Indrajit Sen

Saudi Arabia qualifies firms for gas-fired IPPs

28 September 2026

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Principal buyer Saudi Power Procurement Company (SPPC) has qualified 13 companies to bid for the third round of Saudi Arabia’s combined-cycle gas turbine (CCGT) independent power producer (IPP) programme.

The projects will comprise new CCGT plants developed on a build-own-operate basis. Each project will be implemented through a special-purpose project company wholly owned by the successful bidder.

The qualified firms are:

Abu Dhabi National Energy Company [Taqa] (UAE)
Acwa (Saudi Arabia)
Al-Bawani Capital (Saudi Arabia)
Al-Jomaih Energy & Water (Saudi Arabia)
EDF (France)
Etihad Development Company (UAE)
Kepco (South Korea)
Marafiq (Saudi Arabia)
Mitsubishi Power (Japan)
Nesma Renewable Energy (Saudi Arabia)
PowerChina (China)
Saudi Energy (Saudi Arabia)
Sumitomo Corporation (Japan)

Developers submitted statements of qualification for the round on 23 August, as exclusively reported by MEED.

Some have already begun “the process of forming consortiums to bid” for the project, with up to three or four groups likely to make offers.

Also in September, MEED exclusively reported that US-based GE Vernova was close to finalising a turbine reservation agreement with SPPC for the plants.

The new plants will use advanced H-class or J-class gas turbine technology. Each IPP is expected to comprise two or three gas turbine generators, corresponding heat recovery steam generators with duct firing, and one or two steam turbine generators.

The request for qualifications released by SPPC in July did not specify the number, locations or capacities of the projects, which mark the next stage of its CCGT IPP programme.

The first round comprises Taiba 1, Taiba 2, Qassim 1 and Qassim 2, with a combined capacity of 7,200MW.

The second round comprises Rumah 1, Rumah 2, Nairyah 1 and Nairyah 2, also with a combined capacity of 7,200MW.

Saudi Arabia’s Acwa recently said it had begun initial commercial operations at the Taiba 1 and Qassim 1 CCGT power plants.

US/India-based Synergy Consulting is the financial adviser for the procurement; Germany’s Fichtner is the technical adviser; and UK-headquartered Eversheds Sutherland is the legal adviser.

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