meed-logo

line1 line2 line3
SIGN IN / REGISTER

Algeria to invest $30bn to boost natural gas output

18 January 2023

Algeria’s state-owned oil and gas company Sonatrach plans to invest more than $30bn in exploration and production to boost the country’s natural gas output.

The funds will also be spent on upgrading infrastructure to export gas from liquefied natural gas (LNG) terminals and by pipelines to Europe, according to the company’s chief executive Toufik Hakkar.

The announcement regarding the investments in Algeria’s gas sector comes as European nations scramble to secure alternatives to Russian gas supplies amid the ongoing war in Ukraine.

In his 2023 policy statement, Hakkar said: “As part of Sonatrach’s five-year investment plan (2023-27), the sum of $40bn has been set aside and more than $30bn will be allocated to exploration and production with the objective of increasing production in the short and medium term, and preparing a portfolio of future projects, in particular for natural gas.”

The Sonatrach CEO said the company also planned to invest more than $7bn in refining, petrochemical and gas liquefaction projects within the framework of the investment plan.

“These projects will promote the creation of added value to Algerian resources and will strengthen our export potential,” said Hakkar.

“Nearly $1bn will be devoted to projects aimed at the company’s contribution to the energy transition.

“These include flared gas recovery projects at production sites and the LNG plants at Skikda and Arzew.”

Hakkar said that Algeria wanted to become one of the world's most important sources of natural gas through Sonatrach and its planned investments.

“Discoveries in certain gas fields will generate a significant increase in the volumes of gas available for export, both via gas pipelines and LNG carriers,” he said.

Hakkar said Sonatrach's several important gas projects are expected to be commissioned in the next two years.

These include the Hassi Mouina and Hassi Ba Hamou fields in southwest Algeria, and the Isarène and TFT Sud fields in the southeast of the country.

He added that other projects are planned for 2023 and 2024, notably in Hassi Rmel, Hamra, Ohanet and Touat.

Hakkar invited European countries to commit to long-term gas purchase agreements to guarantee their security of supplies.

Sonatrach is also investing in several associated gas recovery projects, particularly in large production sites such as Hassi Messaoud, which has reduced the flaring rate to 2 per cent, according to Hakkar.

He said: “Other gas flaring recovery projects also concern production sites and LNG complexes and will, in the medium term, achieve the set objectives of reducing gas flaring to less than 1 per cent,” said the CEO.

Sonatrach signed a contract in 2022 with two Chinese engineering companies, Sinopec Luoyang Engineering and Sinopec International Petroleum Services Corporation, for improvement work at the Skikda LNG plant.

The contracts include dismantling two 20-year-old storage tanks and constructing a new tank with a capacity of 150,000 cubic metres.

It also includes the modernisation of jetty and loading facilities to accommodate larger vessels.

Algerian gas supplies are transported to Europe through the Medgaz pipeline, which runs from Beni Saf in Algeria to Almeria in southern Spain.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10526670/main.jpg
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia launches $2bn Jawharat Al-Arous project

    1 May 2026

    Saudi Arabia has launched Jawharat Al-Arous, an SR8bn ($2bn) private-sector-led residential development in north Jeddah.

    The scheme covers 107 million square metres and comprises 18 residential neighbourhoods planned to accommodate more than 700,000 residents. It will provide more than 80,000 residential and commercial plots.

    The masterplan also includes 41 government-backed infrastructure and service zones to support large-scale urban expansion.

    The project was unveiled by Mecca Region Governor Khalid Al-Faisal and will be overseen by Saud Bin Mishaal Bin Abdulaziz.

    According to a recent report by real estate firm Cavendish Maxwell, Jeddah’s residential stock stood at about 1.09 million units at the end of 2025, following the completion of around 4,000 units that year.

    An expanding pipeline of about 18,000 units in 2026 and 22,000 units in 2027 is expected to bring total stock to around 1.14 million units by 2027, gradually adding supply without destabilising market equilibrium.

    GlobalData expects the Saudi construction industry to grow by 3.6% in real terms in 2026, supported by increased foreign direct investment (FDI) and investment in the housing and manufacturing sectors.

    The residential construction sector is forecast to grow by 3.8% in real terms in 2026 and to record an average annual growth rate of 4.7% between 2027 and 2030, supported by Saudi Vision 2030’s goal of increasing homeownership from 65.4% in 2024 to 70% by 2030, including through the delivery of 600,000 homes by 2030.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16640863/main.png
    Yasir Iqbal
  • Damage to US bases in region expected to cost more than $15bn

    1 May 2026

    The $25bn estimate a Pentagon official gave US lawmakers on 29 April did not include the cost of repairing damage to US bases in the Middle East, and the real cost of the war is likely to be between $40bn and $50bn, according to CNN.

    That would put the cost of repairing bases and replacing destroyed assets at between $15bn and $25bn.

    Jules Hurst III, the Pentagon official serving as the agency’s comptroller, told the House Armed Services Committee that “most” of the $25bn he cited had been spent on munitions. Defence Secretary Pete Hegseth declined to say whether the figure included repairs to damaged US bases.

    Iranian strikes across the Gulf in the early days of the war significantly damaged at least nine US military sites in 48 hours, hitting facilities in Bahrain, Kuwait, Iraq, the UAE and Qatar.

    Six US servicemembers were killed in an attack on a command post in Kuwait, and 20 more were injured.

    Three sources told CNN that the figure provided to the House Armed Services Committee did not include the cost of rebuilding US military installations and replacing destroyed assets.

    One source said the true cost would likely be between $40bn and $50bn.

    US contractors such as KBR and Fluor, as well as local firms, are likely to be among the leading contenders for contracts to repair and rebuild US bases in the region.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16638663/main.gif
    Wil Crisp
  • Morocco seeks financing for $25bn gas pipeline

    1 May 2026

    Register for MEED’s 14-day trial access 

    Morocco’s state-owned agency for oil, gas and mineral resources is preparing to launch a fundraising campaign for its planned $25bn gas pipeline to transport West African gas to the Mediterranean coast, according to officials.

    This will be the first time the Office National Des Hydrocarbures & Des Mines (Onhym) has sought to raise capital since it was restructured as a joint-stock company in February.

    The restructuring was implemented to try to bolster the agency’s “capacity to structure partnerships, mobilise diversified funding and support large-scale projects”, according to a company statement.

    Under current plans, the proposed gas pipeline will extend for 6,900 kilometres, including onshore and offshore segments.

    The Nigeria-Morocco Gas Pipeline (NMGP) will link gas deposits in Nigeria, Senegal and Mauritania to 10 neighbouring African nations.

    According to the plan, the project’s northern terminus will connect to the existing Maghreb-Europe Gas Pipeline, which links Morocco and Spain.

    In its statement, Onhym described the planned pipeline as a “major opportunity” to unlock some of the world’s largest untapped gas reserves, saying it would improve “Euro-African energy security”.

    Last month, Omco, Morocco’s gas-transport firm, said that a final investment decision (FID) for the first phase is expected to be finalised before the end of this year.

    Also last month, Amina Benkhadra, the director-general of Onhym, said that Nigeria and Morocco were planning to sign an intergovernmental agreement to formalise the legal and regulatory framework for the pipeline.

    Benkhadra said that the agreement would establish a “high authority” for the pipeline.

    This body will be based in Nigeria and include ministerial representatives from each participating country to ensure political coordination.

    To navigate global financing challenges and complex cross-border logistics, the project is expected to be developed in stages rather than waiting for a single FID.

    Early phases will link Morocco to gas fields in Mauritania and Senegal, while southern segments will connect Ghana to Cote d’Ivoire and eventually to Nigeria.

    The pipeline is being designed with an annual capacity of 30 billion cubic metres a year, according to officials

    Half of that volume is earmarked for Morocco’s domestic needs and exports to Europe, which has sought to diversify its energy sources following geopolitical disruptions.

    To manage construction, a joint-venture project company will be formed between Onhym and the Nigerian National Petroleum Company.

    Feasibility studies for the pipeline were completed last year.

    Onhym awarded UK-based Penspen the phase 1 front-end engineering and design (feed) contract for the project in 2019.

    Then, in 2022, Onhym awarded Australia’s Worley the phase 2 feed contract.

    At the time, Worley said that the overall feed services would be managed by Intecsea, its offshore engineering consultancy business headquartered in the Netherlands.

    It also said that Advisian, its global consulting business, will provide research connected to the acceleration of electrification and the feasibility of energy self-sufficiency in the region.

    Its UK and Madrid offices would analyse the possibility of using renewable energy resources to power the pipeline.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16635907/main.jpg
    Wil Crisp
  • Read the May 2026 MEED Business Review

    30 April 2026

    Download / Subscribe / 14-day trial access

    The regional war – and resulting disruption to oil and gas shipping – has triggered a major global energy security shock that is likely to recalibrate long-term decisions on how energy is produced and consumed.

    The effective closure of the Strait of Hormuz is exposing the vulnerability of Middle East supply chains and pushing import-dependent countries to strengthen energy security by expanding domestic fossil fuels, speeding up nuclear projects, and investing in renewables and storage.

    At the same time, higher prices are encouraging producers unencumbered by reliance on the Strait to boost output.

    Like the oil shocks of the 1970s, the conflict is likely to have lasting effects, reshaping energy policies and partnerships and accelerating diversification away from existing arrangements. Read more here. 

    The conflict is also undermining the business case for Middle East liquefied natural gas (LNG) projects, as prices rise, demand drops and confidence in the reliability of the region’s suppliers is eroded. 

    May’s market focus is on the UAE, where disruption from the Iran war has challenged every assumption behind the country’s non-oil model.

    This edition also includes our industry report on Gulf capital markets, as well as analysis on the region’s initial public offering market.

    In the latest issue, we explore why regional banks are feeling the strain despite strong buffers; consider why force majeure offers no shield against construction breaches; examine the Public Investment Fund’s 2026-30 strategy and talk to Estelle Brachlianoff, CEO of water infrastructure operator Veolia.   

    We hope our valued subscribers enjoy the May 2026 issue of MEED Business Review. 

     

    Must-read sections in the May 2026 issue of MEED Business Review include:

    > AGENDA: War in the Middle East recalibrates global energy markets

    > REGIONAL LNG: War undermines business case for Middle East LNG

    INDUSTRY REPORT:
    Gulf capital markets
    > Damage avoidance frames debt issuance
    > Regional IPO market dries up amid war

    > INTERVIEW: Desalination holds steady amid tensions, says Veolia CEO

    > LEGAL: Force majeure will not cure pre-existing construction industry breaches  

    > BANKS: GCC banks to feel the strain despite strong buffers

    > PIF STRATEGY: Public Investment Fund approves 2026-30 strategy

    > UAE MARKET FOCUS: 
    > COMMENT: Conflict tests UAE diversification
    > GVT &: ECONOMY: UAE economy absorbs multi-sector shock
    > BANKING: UAE banks ready to weather the storm
    > ATTACKS: UAE counts energy infrastructure costs
    > UPSTREAM: Adnoc builds long-term oil and gas production potential
    > DOWNSTREAM: Adnoc Gas to rally UAE downstream project spending
    > POWER: Large-scale IPPs drive UAE power market
    > WATER: UAE water investment broadens beyond desalination
    > CONSTRUCTION: War casts shadow over UAE construction boom
    > TRANSPORT: UAE rail momentum grows as trade routes face strain
    > DATABANK: UAE GDP projection corrects on conflict

    > MEED COMMENTS: 
    >     War takes a rising toll on Kuwait’s oil sector
    > Libya budget approval could lead to surge in oil and gas projects
    > Masdar’s move abroad will not be the last
    > Saudi Landbridge finds its moment in Gulf turmoil

    > GULF PROJECTS INDEX: Gulf index plateaus despite ceasefire

    > MARCH 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The road to hell is paved with gold

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16623768/main.gif
    MEED Editorial
  • Algeria extends bid deadline for stalled power plant

    30 April 2026

    Algeria’s state-owned electricity and gas utility Sonelgaz has extended a deadline for contractors to submit expressions of interest for the construction of the 1.2GW Djelfa combined-cycle power plant.

    The project is being procured through Sonelgaz’s power generation subsidiary, Societe Algerienne de l’Electricite et du Gaz – Production de l’Electricite (SPE).

    In March, MEED reported that the utility was seeking contractors to complete works at the existing Djelfa plant, including the remaining construction, the supply of missing equipment and the assessment of installed equipment.

    The original bid submission deadline for prequalification was 7 April. The new deadline is 5 May.

    The tender is open to both local and international companies, and will be conducted in three phases: prequalification, preliminary technical assessment, and final technical and financial submission.

    The retender follows earlier plans to complete the project through a Chinese consortium comprising China Energy Engineering Group Company, Northwest Electric Power Design Institute and Anhui Electric Power Construction Company.

    This proposal was made after Spanish contractor Duro Felguera halted work on the project in June 2024. 

    According to MEED Projects, construction works had progressed to 72% at the time of the suspension.

    It is understood that an agreement in principle was then reached to transfer the remaining works to the Chinese group after the Spanish firm entered a pre-bankruptcy phase in December 2024.

    A company statement at the time said: “The Chinese group is committed to completing the plant construction, with commissioning scheduled to start in the ninth month following the final agreement.”

    However, in October 2025, it was revealed that the attempt to transfer the project to a consortium of Chinese companies had failed, leaving the Spanish firm with an official demand to pay €413m in compensation to Sonelgaz.

    This was revealed via a lengthy report containing a restructuring plan sent by Duro Felguera to creditors in Spain and the Madrid Financial Markets Authority.

    Gas-fired power plants

    Located in Djelfa province, the project remains a key part of Algeria’s power generation expansion plans.

    Sonelgaz has been seeking contractors to build a separate 1.2GW combined-cycle gas-fired power plant in Aldrar since last April.

    The most recent deadline extension was 29 April.

    According to recent reports, Algeria has also begun construction of a power generation plant in El-Aouinet, with a total installed capacity of 1,406MW.

    The combined-cycle gas turbine plant is being developed in partnership with China National Electric Engineering Company.

    Gas-fired combined-cycle plants continue to account for the majority of Algeria’s electricity generation capacity. Data from MEED Projects indicates that more than 5,000MW of oil- and gas-fired power capacity is currently in the execution phase.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16623787/main.jpg
    Mark Dowdall