meed-logo

line1 line2 line3
SIGN IN / REGISTER

Algeria cancels $1.3bn refinery contract and makes new award

6 December 2024

Register for MEED's 14-day trial access 

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.

https://image.digitalinsightresearch.in/uploads/NewsArticle/13072344/main.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Houthi truce collapse widens Gulf risk map

    15 July 2026

    Register for MEED’s 14-day trial access 

    The Houthis’ declaration ending the de facto truce with Saudi Arabia has significantly increased the likelihood of renewed attacks on Red Sea shipping and regional infrastructure, broadening the threat environment beyond the Strait of Hormuz.

    S&P Global Market Intelligence says the 13 July exchange is best understood as a potential widening of the renewed US-Iran escalation cycle into the Yemen and Red Sea theatres.

    Houthi claims that Saudi Arabia was responsible for a strike on Sanaa International airport have not been independently confirmed. Saudi Arabia had not formally commented at the time the analysis was written.

    The Yemeni militant group is likely to use the incident as a trigger that allows it to justify renewed military action while aligning with Iran’s wider effort to impose costs on US and Gulf interests, according to the research firm.

    The decision to declare an end to de-escalation with Riyadh materially increases the likelihood of further missile and unmanned aerial vehicle (UAV) activity against infrastructure near the Yemen-Saudi border, as well as renewed pressure on maritime routes in the Red Sea and Bab Al-Mandab.

    Aviation exposure

    The resumption of direct hostilities broadens the range of vessels and ports likely to be subject to Houthi targeting, and presents severe risk to airports and stationary aircraft, S&P Global Market Intelligence says.

    While the Houthis would probably not intentionally down civilian aircraft, there is a significant risk to aircraft in flight, particularly at lower altitudes close to airports, due to incoming UAVs and missiles and interceptor activity.

    The broader risk is to regional logistics rather than any single target set, the analysis says.

    If escalation around the Strait of Hormuz coincides with renewed Houthi activity in the southern Red Sea, Bab Al-Mandab and the Gulf of Aden, commercial operators face a more complex dual-chokepoint environment, with the added likelihood that the Houthis will seek to target Hormuz bypass infrastructure across the Gulf.

    That would raise the likelihood of shipping delays, higher insurance costs, more conservative routing decisions and greater interest in alternative corridors or bypass routes.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17680608/main.jpg
    Colin Foreman
  • Saudi Downtown awards Al-Khobar infrastructure deal

    15 July 2026

    Register for MEED’s 14-day trial access 

    Saudi Downtown Company, a wholly owned subsidiary of the Public Investment Fund (PIF), has awarded a contract for infrastructure works in downtown Al-Khobar.

    The contract was awarded to local contractor Ansab General Contracting Company.

    The scope of work includes the design and development of overall infrastructure, road networks and street lighting for the downtown Al-Khobar project.

    Saudi Downtown Company was officially launched in 2022 by Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud, who is also chairman of PIF.

    At the time, the company announced plans to develop downtown areas in 12 cities across the kingdom: Medina, Al-Khobar, Al-Ahsa, Buraidah, Najran, Jizan, Hail, Al-Baha, Arar, Taif, Dumat Al-Jandal and Tabuk.

    SDC’s mandate is to develop more than 10 million square metres of land across its projects

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17677176/main.jpg
    Yasir Iqbal
  • Saudi Arabia opens third round of gas-fired IPPs

    15 July 2026

    Register for MEED’s 14-day trial access 

    Principal buyer Saudi Power Procurement Company (SPPC) has opened the qualification process for the third round of conventional independent power projects (IPPs) using combined-cycle gas turbine (CCGT) technology.

    The round is being tendered under the supervision of the Ministry of Energy. Each plant will be built with provision for carbon capture unit readiness, allowing the technology to be deployed at a later stage.

    Each project will be developed on a build-own-operate (BOO) basis, with the winning consortium taking 100% equity in a special purpose vehicle (SPV) set up to develop and operate the plant.

    Each SPV will sign a power purchase agreement with SPPC, which is licensed by the Saudi Electricity Regulatory Authority (SERA) to prepare preliminary studies, tender and award IPPs, and purchase electricity from energy projects in the kingdom.

    The programme forms part of Saudi Arabia’s Circular Carbon Economy approach, which underpins the energy sector element of the Vision 2030 strategy. Riyadh is displacing liquid fuels with natural gas in power generation to cut emissions intensity, while designing new plants so that carbon capture equipment can be retrofitted in support of national emissions targets.

    In April, Acwa and Saudi Energy (formerly Saudi Electricity Company) signed a 31-year power purchase agreement (PPA) with SPPC for the Rabigh 2 IPP expansion.

    The project involves the development of a CCGT plant in the Mecca region. It will have a total capacity of 2,313.5MW.

    The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17676286/main.jpg
    Colin Foreman
  • Dubai selects contractor for Al-Maktoum airport people mover

    15 July 2026

     

    Register for MEED’s 14-day trial access 

    Dubai Aviation Engineering Projects (DAEP) has selected a contractor to deliver the automated people-mover system as part of the first phase of the $35bn expansion of Al-Maktoum International airport.

    A team of Japan’s Mitsubishi Corporation and Indian contractor Larsen & Toubro is the selected contractor.

    The automated people-mover system will serve as a critical facility for operations at Al-Maktoum International airport. The system will run under the apron of the entire airfield and the airport’s terminals. It will consist of multiple tracks, taking passengers from the terminals to the concourses.

    Four underground stations will be built as part of the first phase. The overall plan includes 14 stations across the airport.

    The firms submitted the bids for the project in July last year, as MEED exclusively reported.

    The contract is the latest in a series of awards signed by DAEP recently. DAEP has awarded contracts valued at about AED13bn, with construction works currently under way on several airport packages.

    These include enabling works, the second runway, and the initial structural foundations for passenger terminals and gates.

    Upcoming awards

    In June, DAEP said that it will award contracts worth over AED55bn ($15bn) by the end of this year for construction works at Al-Maktoum International airport.

    The projects slated for contract awards include the substructure works for the Western Passenger Terminal, the fourth aircraft concourse building and the baggage handling system, in addition to the superstructure works for the Western Passenger Terminal and the first, second and third aircraft concourses.

    The packages also encompass long-span structural frameworks for buildings covering about 1.5 million square metres (sq m), infrastructure works for the southern airfield area, and power generation and district cooling plants supporting the construction programme.

    The award of the facade and roofing packages is also planned for this year.

    Construction progress

    In May last year, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal were awarded to Abu Dhabi-based Tristar E&C.

    Construction on the project’s first phase is expected to be completed by 2032.

    Construction on substructure works began in November last year, when DAEP formally selected a contractor to deliver the package.

    The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    According to an official description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level, 800,000 sq m facility with an annual capacity of 45 million passengers.

    It will be the second of three terminals at Al-Maktoum International airport.

    In September 2024, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    The airport’s construction is planned to be undertaken in three phases. The airport will cover an area of 70 square kilometres south of Dubai and will have five parallel runways and 430 aircraft gates.

    It will be five times the size of the existing Dubai International airport and will have the world’s largest passenger-handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17674721/main.png
    Yasir Iqbal
  • Chinese contractor wins Kuwait investment authority HQ

    15 July 2026

    Register for MEED’s 14-day trial access 

    Beijing-headquartered China State Construction Engineering Corporation (CSCEC) has won a contract to build the permanent headquarters of the Kuwait Direct Investment Promotion Authority (KDIPA).

    The contract covers the construction of a 275-metre, 55-storey office tower located in Kuwait City’s Sharq district. The project is expected to be completed by 2028.

    According to results published on the Kuwait Central Agency for Public Tenders (Capt) website, the firm initially submitted a bid of $233m, as MEED reported in January. The tender was issued on 19 October 2025 and bids were submitted on 18 November, MEED reported.

    The contract is the latest in a series of high-profile projects signed by CSCEC in the GCC region this year. Last month, it won a contract to deliver the Janadriyah cultural district at Qiddiya entertainment city on the outskirts of Riyadh. The contract was awarded by gigaproject developer Qiddiya Investment Company (QIC).

    The scope covers the construction of six structures, including a heritage building, a gateway hotel, a wadi hotel, a creative hub, a community centre and an open-air market.

    In June, MEED exclusively reported that QIC had awarded CSCEC a contract to build a new transport hub at Qiddiya entertainment city.

    The project is located within the resort core zone of the development.

    Kuwait market overview

    UK analytics firm GlobalData expects Kuwait’s construction industry to average annual growth of 4.9% in 2026-29, supported by government investment in renewable energy and transport infrastructure.

    In September 2025, Kuwait’s government allocated KD1.3bn ($4.2bn) for 141 projects, as part of its capital spending during the fiscal year 2025-26. This allocation was intended for 162 current projects and 17 new projects.

    According to government data, as of September 2025, the country had around 300 active projects, valued at about KD35.3bn ($115bn), with large infrastructure projects making up nearly half of that total.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17674440/main.jpg
    Yasir Iqbal