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Contracts signed for Algerian phosphate project

14 August 2026

Algeria’s national oil and gas company Sonatrach and the Algerian Chinese Fertilisers Company (ACFC) has signed two engineering, procurement and construction (EPC) contracts for the country’s planned phosphate integrated project in Tebessa Province.

ACFC was created in March 2022 by Algerian companies Asmidal and Manadjim El-Djazair (Manal), which own 56% of the company, and Chinese groups Wuhuan and Tianan, which own the remaining 44% stake.

Manal and Asmidal are both subsidiaries of Sonatrach.

The new contracts are part of the Bled El-Hadba phosphate development project, which is expected to be worth $7bn.

The contracts were signed by Italy’s Saipem and China Harbour Engineering Company (CHEC) as part of the first phase of the integrated phosphate project.

Saipem’s contract is worth approximately €500m ($577m), according to a statement released by the Italian company.

Saipem was previously awarded a front-end engineering and design (feed) contract for the same project in June 2025.

The signing ceremony for the latest two EPC contracts took place at the headquarters of Sonatrach's general directorate, in the presence of members of the government, Sonatrach CEO Nour Eddine Daoudi, the ambassadors of Italy and China in Algeria, as well as officials from Saipem and CHEC.

The first phase of the project involves the construction of industrial and port infrastructure, including a phosphate extraction and enrichment complex in Bled El-Hadba with an extraction capacity of 5.5 million tons a year (t/y) and an overall production capacity of concentrated phosphate estimated at 3.2 million t/y.

Phase one also includes the construction of an integrated industrial complex in Oued Kebrit with the capacity to produce 2.4 million t/y of phosphate fertiliser and 570,000 t/y of nitrogen fertiliser.

The facility in Oued Kebrit will also produce quantities of other intermediate products.

Port infrastructure will be constructed in Annaba with the aim of enabling the establishment of an integrated industrial and logistics ecosystem.

During the signing ceremony, Minister of State and Hydrocarbons Minister Mohamed Arkab said that the project benefits from special attention from Algerian President Abdelmadjid Tebboune, within the framework of his vision to exploit natural resources, strengthen national industrialisation, create added value, diversify the national economy and promote the country’s non-hydrocarbons exports.

He said that the project will be carried out according to an “accelerated EPC fast-track method”, in order to reduce completion times and bring production online faster.

This is expected to allow the first quantities of enriched phosphate to be produced in the first quarter of 2027 and fertiliser production is expected to start during the fourth quarter of the same year.

When the project is fully operational, it is expected to produce approximately 6 million t/y of enriched phosphate and 4 million t/y of different types of phosphate and nitrogen fertilisers.

It will also produce industrial materials such as sulfuric acid, phosphoric acid and ammonia, according to Arkab.

He said that Algeria's ambition is not limited to the production of phosphate and fertilisers and also includes the establishment of an integrated industrial chain capable of creating added value, developing skills, supporting the national economy and opening new horizons for Algerian products on international markets.

Daoudi, the chairman and chief executive of Sonatrach, said that the signing of the two contracts marked the effective transition to the implementation phase of this project, which "undoubtedly constitutes a key milestone in the industrial development process in Algeria".

The scope of the EPC contract signed by Saipem covers the construction of project facilities at the Bled El-Hadba site and the Oued Kebrit site.

Saipem’s chief executive Alessandro Puliti said that his company will try to deliver the project on time and will work with three local companies on the project.

The three companies are pipeline specialist Cosider Canalisations; Algerian Industrial Projects Realisation Company, which is a subsidiary of Sonatrach; and state-owned National Civil Engineering & Building Company.

The scope of the EPC contract signed by CHEC is focused on developing the Annaba port infrastructure project.

Speaking at the signing ceremony, CHEC's deputy general manager Chen Zhong said his company is committed to completing the first and second phases of the Annaba port project within the allotted timeframe.

The wider integrated phosphates project has four main focus areas.

These are:

  • The Bled El-Hadba phosphate mine
  • Phosphate enrichment units
  • The Oued Kebrit chemicals processing complex
  • Logistics facilities, including the extension of the port of Annaba and a railway network dedicated to the transport of raw materials and finished products

In its statement, Saipem described the document that it signed with Sonatrach as a limited notice to proceed (LNTP) for the execution of phase one of the integrated phosphate project in Algeria.

It said: “The full EPC contract will be based on a contractual framework which will allow both parties to share risks and rewards during the execution, including the LNTP period which will enable Saipem to start the preliminary activities that are preparatory and critical for achieving the first project milestones.

“These include but are not limited to feed completion and detailed engineering, procurement of long lead items, as well as preliminary project mobilisation and organisation activities, pending the negotiation and finalisation of the EPC contract.”

Saipem has been present in Algeria since 1968 and has developed infrastructure for hydrocarbons treatment and transportation, power generation plants and oil well drilling.

The Bled El-Hadba phosphate mine has over 1.2 billion tonnes of estimated total reserves, including 800 million tonnes of estimated exploitable reserves, making it one of the biggest mines of its kind in the world.

READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

> MARKET FOCUS: Maghreb fortunes diverge
To see previous issues of MEED Business Review, please click here
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Wil Crisp

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