Banks provide financing for Algeria chemicals plant
15 June 2023
Banks have provided financing to fund 70 per cent of the cost of the planned $1.5bn STEP petrochemicals project in Algeria, allowing the country’s national oil and gas company to go ahead with the project without France’s TotalEnergies, which had originally agreed to take a 49 per cent stake in the project.
“Financing has been key to this project progressing without TotalEnergies,” said one source. “Technically, this project is very easy for Sonatrach to develop, but without TotalEnergies different funding arrangements had to be made.”
Banque Nationale d'Algerie was the lead arranger on the financing deal, according to industry sources.
Earlier this month, Sonatrach's chief executive, Toufik Hakkar, spoke to domestic media outlets about why TotalEnergies is no longer associated with the project.
He said: "We worked together to refine the project, through market studies and feasibility studies, as well as the first engineering studies."
He went on to say that TotalEnergies ultimately decided that the project "did not correspond to its financial aspirations" and it withdrew as a result.
Hakkar said that TotalEnergies worked with Sonatrach on the project from 2017 to 2022 and maintained a cooperative relationship with Sonatrach despite no longer participating in the project.
Earlier this month, UK-based engineering company Petrofac signed the engineering, procurement and construction (EPC) contract.
Petrofac has partnered with China Huanqiu Contracting & Engineering Corporation, a subsidiary of China National Petroleum Corporation, for the project, which is due to be developed in the Arzew Industrial Zone to the west of Algiers.
The contract was signed with Step Polymers, a wholly-owned subsidiary of Sonatrach.
The contract signing came less than a month after Petrofac announced that it had been selected for the contract award.
The project’s scope includes designing and building two major integrated processing units.
It includes the delivery of a new propane dehydrogenation (PDH) unit and polypropylene production unit, as well as associated utilities and infrastructure for the site.
It is expected to produce 550,000 tonnes of polypropylene a year.
Petrofac has been active in Algeria since 1997, when it opened its first office in Algiers. The company has since developed some of the country’s most significant oil and gas assets.
Polypropylene, a thermoplastic, is used for many industrial applications, such as consumer goods, medical supplies and parts for the automotive industry.
Last year, MEED revealed that bids had been submitted for the contract before the deadline of 20 July 2022.
Four international contractors were understood to have submitted commercial bids for the project’s EPC work.
In August last year, UK-based Wood Group announced it had won the project’s front-end engineering and design contract.
In the PDH process, propane is selectively dehydrogenated to create propylene. Industrial implementation of PDH is complicated owing to side reactions such as deep dehydrogenation, hydrogenolysis, cracking, polymerisation and coke formation.
Algeria is seeing an uptick in interest in its oil, gas and petrochemicals sectors as Western countries look to North African suppliers to replace imports from Russia amid the ongoing war in Ukraine.
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The second deal, worth about $35m, covers the construction of the Sultan Haitham City 132/33kV grid station and associated 132kV line-in line-out underground cables running 4 kilometres from Mabella to Mabella Industrial Zone.
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Saudi sovereign wealth vehicle the Public Investment Fund (PIF) has launched Expo 2030 Riyadh Company (ERC) as a wholly-owned subsidiary to build and operate facilities for Expo 2030.
In a statement, the PIF said: “During its construction phases, Expo 2030 Riyadh and its legacy are projected to contribute around $64bn to Saudi GDP and generate approximately 171,000 direct and indirect jobs. Once operational, it is expected to contribute approximately $5.6bn to GDP.”
The masterplan for Expo 2030 Riyadh encompasses an area of 6 square kilometres, making it one of the largest sites designated for a World Expo. Situated to the north of the city, the expo site will be located near the future King Salman International airport, providing direct access to various landmarks within the Saudi capital.
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In mid-May, MEED reported that Riyadh had begun talks with various stakeholders in preparation for the start of the construction works for the event.
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Kharafi wins Egypt wastewater deal
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Kuwaiti contractor Mohamed Abdulmohsin Al-Kharafi & Sons has won a €69m ($79m) contract to design and build a new wastewater treatment plant (WWTP) in Tanta with a capacity of 100,000 cubic metres a day (cm/d).
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Oman receives dams funding
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The Islamic Development Bank (ISDB) has extended a $632m loan to the Ministry of Agricultural, Fisheries Wealth & Water Resources to fund the construction of four major flood protection dams in the sultanate.
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Separately, contractors are preparing to submit technical and commercial bids by 23 June for the ISDB-funded project to build two flood protection dams at Wadi Al-Ansab, called ANS-02 and ANS-03.
The estimated $80m contract involves the following scope of work for each dam:
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Contractors submit prices for QatarEnergy NGL train project
18 June 2025
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Contractors have submitted commercial bids to QatarEnergy for a project to add a fifth natural gas liquids (NGL) train at its NGL complex in Qatar’s Mesaieed Industrial City.
The objective of the project, which is estimated to be worth $2.5bn, is to build a fifth NGL train (NGL-5) with the capacity to process up to 350 million cubic feet a day of rich associated gas from QatarEnergy’s offshore and onshore oil fields.
Contractors submitted commercial bids for engineering, procurement and construction (EPC) works on the NGL-5 project by the deadline of 15 June, according to sources.
The following contractors are understood to be participating in the project’s main contract tendering process:
- CTCI Corporation (Taiwan)
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- McDermott (US)
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- Samsung E&A (South Korea)
- Tecnicas Reunidas (Spain)
- Tecnimont (Italy)
QatarEnergy initially set a deadline of the end of May for the submission of prices for the project.
MEED previously reported that QatarEnergy had received technical bids for the project from contractors by the deadline of 13 April.
QatarEnergy issued the expression of interest (EoI) document for the NGL-5 project in early June of last year, with contractors submitting responses by 24 June 2024, MEED previously reported.
QatarEnergy eventually issued the main EPC tender for the NGL-5 project in November 2024.
In the EoI document, QatarEnergy said that it had begun site preparation works for the project in the fourth quarter of 2023 and expected work to be completed in the first quarter of 2025.
Turkish contractor Iris Insaat is performing site preparation work on the project, according to regional projects tracker MEED Projects.
QatarEnergy intends to start operations at the NGL-5 facility by the second quarter of 2028.
Project scope
Associated gas from the PS1, PS2 and PS3 offshore fields and the Dukhan onshore field is processed at existing facilities in the NGL complex at Mesaieed – the FSP, NGL-1 and Qapco ERU units.
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QatarEnergy is understood to have divided the scope of work on the NGL-5 project into five EPC packages.
ALSO READ: QatarEnergy receives bids for new NGL train project
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