Algeria launches $2.3bn upstream gas project
4 December 2024
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Algeria’s national oil company Sonatrach has held a ceremony to mark the start of the $2.3bn gas development project to upgrade Algeria’s Hassi Rmel gas field.
In a statement, Sonatrach’s chairman and chief executive, Rachid Hachichi, said the project would help to maintain a production rate from the field of 188 million standard cubic metres a day (cm/d).
In May, a partnership of Italy’s Maire and US-based Baker Hughes was awarded the engineering, procurement and construction (EPC) contract.
The project aims to stabilise the pressure of the natural gas being transported through the Hassi Rmel transmission system.
Hassi Rmel is Algeria’s largest gas field, extending 70 kilometres (km) from north to south and 50km from east to west.
Maire has said that its subsidiary Tecnimont Integrated E&C Solutions will carry out its portion of the work.
It said that $1.7bn of the contract related to work that Tecnimont would carry out.
The project is focused on developing three gas booster stations and upgrading the gas gathering system at the Hassi Rmel gas field, which is located 550km south of Algiers.
The three gas booster stations will be developed in the field’s northern, central and southern zones.
The project includes installing 20 turbocompressors, which will compress about 188 million standard cm/d of natural gas.
It also includes:
- Rehabilitation of the existing gas-collecting network
- Construction of three condensate demercurisation units
- Tie-ins for the utilities
The existing gas gathering system, which will be upgraded during the project, includes more than 300km of flowlines connecting the wells.
The central booster station is expected to be completed within 33 months.
The northern booster station is anticipated to be completed in 36 months, and the southern booster station in 39 months.
The respective commissioning dates for the booster stations are October 2026, January 2027 and April 2027.
In its latest statement about the project, Sonatrach said: “The completion of this project will maintain the level of gas production in order to satisfy the domestic market, and enable Sonatrach to meet its commercial international commitments.”
The project aims to help maintain the pressure of the gas as it travels through the pipelines, allowing it to continue flowing more efficiently and ensuring a reliable and uninterrupted supply of natural gas to Italy and, subsequently, to Europe.
This project is the third major field development project to be awarded for the Hassi Rmel gas field.
Tokyo-headquartered JGC was awarded the second major field development contract for the Hassi Rmel gas field in 2016. The contract, worth $1.1bn, was completed in February 2021.
JGC participated in early talks with Sonatrach about potentially taking on the third development project for the Hassi Rmel field.
However, talks between JGC and Sonatrach regarding the project ended without an agreement between the two companies.
Chemical plant
In March, Tecnimont was awarded a $1.1bn contract for the planned linear alkyl benzene (LAB) plant at Skikda in Algeria.
The project entails implementing a new LAB plant with an annual production capacity of 100,000 tonnes and the associated utilities, offsites and interconnections with the existing facilities.
The completion of the project is scheduled within 44 months from the contract’s effective date.
Italy has increasingly sought a deeper partnership with Algeria since the start of the Russia-Ukraine war.
Claudio Descalzi, CEO of the Italian oil and gas company Eni, has said that Algeria is expected to supply 38% of Italy’s gas needs in 2024, as much as Russia did before it cut flows to Europe in retaliation against war sanctions.
Growing demand
Algeria has seen an uptick in its upstream energy projects amid increased demand as European nations look for alternatives to Russian energy imports due to the ongoing war in Ukraine.
In February, Algeria announced a contract to supply Germany with pipeline gas for the first time.
It said that a contract had been signed between a subsidiary of the Leipzig-headquartered company VNG and Sonatrach.
In July last year, the French oil and gas firm TotalEnergies signed a series of agreements with Sonatrach to increase Algerian gas production and the number of gas deliveries to France.
The agreements were signed by Patrick Pouyanne, the chairman and chief executive of TotalEnergies, and Toufik Hakkar, the chief executive of Sonatrach.
Under the terms of one of the agreements, both parties agreed to convert the production contracts for the Tin Fouye Tabankort 2 (TFT2) and Tin Fouye Tabankort Sud (TFT Sud) fields in southern Algeria to the framework established by the Algerian Petroleum Law enacted on 11 December 2019.
Sonatrach has a 51% stake in the fields and TotalEnergies has a 49% stake.
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Emaar announces $55bn Dubai project12 June 2026
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Oman signs $7.5bn of Duqm project deals10 June 2026
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Mohammed Alabbar, the founder of Emaar Properties, has released a statement saying that the Dubai-based real estate developer is about to announce a $55bn project in Dubai.
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Aramco awards contract for Uthmaniyah gas compression project
12 June 2026
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Saudi Aramco has awarded a key contract as part of its larger project to boost gas compression capacity at the Shedgum and Uthmaniya processing plants in the kingdom’s Eastern Province.
The Shedgum and Uthmaniya plants currently receive approximately 870 million cubic feet a day (cf/d) and 1.2 billion cf/d of Khuff raw gas, respectively. Through this multibillion-dollar project, Aramco aims to increase the compression and processing capacity of the two plants, as well as construct new pipelines to enhance gas transport.
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Shedgum and Uthmaniyah gas compression project
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Oman signs $7.5bn of Duqm project deals
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Oman’s Public Authority for Special Economic Zones and Free Zones (Opaz) has signed 10 investment agreements and memorandums of cooperation worth RO2.9bn ($7.5bn) for projects in the Special Economic Zone at Duqm (SEZAD).
The agreements were signed on 8 June during an investment ceremony in Duqm, chaired by Opaz chairman Qais Bin Mohammed Al-Yousef.
The package includes a RO350m ($910m) agreement with Al-Sahil Power to develop the 890MW Duqm independent power project (IPP).
MEED reported in January that a consortium comprising Korea Western Power (Kowepo), Qatar’s Nebras Power, the UAE’s Etihad Water & Electricity (EtihadWE) and Oman’s Bhawan Infrastructure Services had signed a PPA for the Duqm IPP project.
The agreement appears to relate to the same project, suggesting that Al-Sahil Power has been established as a project company to execute the project.
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A consortium of China-headquartered Shandong Electric Power Construction No. 3 Company (Sepco 3) and South Korea’s Doosan Enerbility was recently appointed as the main contractor on the combined-cycle gas turbine plant.
Commercial operations are scheduled to begin in 2029.
Green hydrogen project
The largest agreement signed includes a RO1.6bn ($4.2bn) agreement for the implementation of the second and third phases of Indian renewable energy company ACME Group’s green hydrogen project in Duqm.
Hydrom, Opaz and ACME previously signed project development and land usufruct agreements for the two phases in May 2025
The development will establish a green hydrogen and green ammonia production complex covering 10 square kilometres.
Each phase is expected to produce about 71,000 tonnes a year of green hydrogen and 400,000 tonnes a year of green ammonia.
Total production capacity will reach 142,000 tonnes of green hydrogen and 800,000 tonnes of green ammonia a year once both phases are completed.
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Other agreements
Other agreements cover industrial, residential, tourism and manufacturing projects.
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