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Chinese firm to take over Duro Felguera project in Algeria

22 April 2025

Spain's Duro Felguera and Algeria's Sonelgaz Production d'Electricite have signed a memorandum of understanding (MoU) for the amicable termination of a contract for the construction of the Djelfa power plant in Algeria, which they signed in 2014.

In a statement, the Spanish engineering, procurement and construction (EPC) contractor said the agreement includes assigning the contract "in favour of a group of companies" led by China Power Engineering Consulting Group (CPECC) and the final and amicable resolution of all disputes and litigation between Duro Felguera and Sonelgaz Production d'Electricite.

The Spanish firm said the "MoU has been signed by China Power Engineering & Consulting Group International Engineering Company, in its capacity as assignee of the contract, and by GE Energy Products France, in its capacity as manufacturer of the equipment".

The MoU ensures the completion of the construction of the Djelfa power plant through the assignment of the contract from Duro Felguera to the Chinese contracting firms, as well as the termination of all existing claims and litigation between Duro Felguera and Sonelgaz, with the withdrawal by the parties from the arbitrations in progress.

The Spanish company is understood to have stopped construction work on the gas-fired power plant, which has a planned installed capacity of 1,262MW, in June 2024.

The scope of the project includes engineering design, partial equipment procurement, installation and trial operation.

MEED understands that the project is part of the Algerian Electricity & Gas Company's strategy to enhance national power production.

Once completed, the project will meet the electricity needs of residents and enterprises in Algeria's Djelfa region and promote regional economic development.

It is not the first power plant project won by Duro Felguera in the region that has suffered delays and undergone arbitration proceedings.

Related read: K station highlights risks of part-finished schemes

The Spanish firm won the AED802m ($219m) EPC contract to build the expansion of the Jebel Ali K Station power plant in Dubai in 2017.

The project included the supply, installation, testing and launch of two F-type gas turbines from Siemens AG that would produce 590MW at 50 degrees centigrade. The turbines were planned to be operational by the second quarter of 2020, taking the capacity of K Station to 1,538MW.

However, it is understood that the contract with the Spanish contractor was terminated in 2020.

In its 2021 annual report, the Madrid-headquartered EPC contractor said that Dubai Electricity & Water Authority (Dewa) had submitted claims of AED975.8m ($266m) and it had issued counterclaims of AED603.8m. It said at the time that the arbitration process was going through the Dubai courts.

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Jennifer Aguinaldo

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