meed-logo

line1 line2 line3
SIGN IN / REGISTER

Lummus targets large contracts in Saudi Arabia

26 September 2023

 

Register for MEED's guest programme 

US-headquartered petrochemicals specialist Lummus Technology is expecting to grow rapidly in Saudi Arabia over the next decade, according to the company’s chief technology officer Ujjal Mukherjee.

Mukherjee is in the process of moving his entire team from the US to Saudi Arabia in order to capitalise on opportunities in the Middle East.

“The Middle East and North Africa are a key focus for us because of the scale of the planned capital expenditure in our industry,” he says.

“Within the region, Saudi Arabia is the most important to us because of the investments in petrochemicals that are planned.

“Qatar is also important because of its plans for natural gas and petrochemicals, but in terms of investment, Saudi Arabia is not just leading the region, but the entire world.”

Lummus is anticipating as many as 10 or 11 ethane crackers to be installed in Saudi Arabia over the next seven to eight years

Project expectations

Lummus says that Saudi Arabia’s plans to develop facilities with the capacity to convert 4 million barrels of crude oil to chemicals represent $100bn-$200bn in investment.

As part of the push to boost crude-to-chemicals production, Mukherjee is expecting at least four or five greenfield complexes to be developed in Saudi Arabia.

On top of this, he says there are several opportunities to upgrade existing facilities in the country, both in the eastern Jubail area and in the west coast’s Yanbu region.

Across all of these greenfield and upgrade projects, Lummus is anticipating as many as 10 or 11 ethane crackers to be installed over the next seven to eight years.

“This is a huge investment – and that is why everyone in the world of petrochemicals is focused on Saudi Arabia,” says Mukherjee.

“Elsewhere, China is slowing slightly and the Russian market is off limits. There are opportunities in Southeast Asia and India specifically, but the GCC nations are the most important.”

In addition to the GCC states, Lummus has significant interest in markets across the Middle East and North Africa (Mena) region, including Egypt and Turkiye.

Turkiye is of particular interest because of its stated aim of becoming self-sufficient in terms of petrochemicals production, according to Fadi Mhaini, Lummus Technology’s managing director for Mena.

Turkiye is also in a financial position that means investments in world-scale petrochemicals plants are feasible.

The investment climate in Egypt is more challenging, but it remains of interest because of its significant reserves of oil and gas, large population and internal demand for petrochemicals products.

“There are 100 million people living in Egypt and there is a great demand for polymers and plastics,” says Mhaini.

Per capita consumption of plastics in Egypt is estimated to be 21.8 kilograms (kg) a year. This is compared to more than 130kg in the US.

Lummus sees this as a potential sign of pent-up demand for plastics and says new facilities that come online in Egypt could see significant success by supplying the local market.

Saudi challenges

While there are big opportunities in Saudi Arabia’s petrochemicals sector, Mukherjee says it remains a market with significant challenges.

“The biggest challenge we have is getting subject matter expertise in the complex technologies that we license, especially with the focus on employing local skilled labour,” he says.

“We have a lot of graduates coming from good universities there, but you need a certain degree of experience in absorbing these complex technologies.”

A key area of focus for Lummus is growing the number of experienced specialists that it employs and accelerating the transfer of knowledge from its experienced workers to the local talent pool in Saudi Arabia, as well as in other markets, including the UAE.

In order to achieve this goal, the company plans to create centres of excellence across the Mena region.

It has already created one in Bahrain, and says that it has proven effective at providing education for local operators in complex technologies and advanced computing tools.

By recruiting locally and relocating experienced staff from around the world, Lummus expects to grow its Saudi Arabia office from an initial size of about 50 employees to more than 200 in the next three to four years, according to Mukherjee.

While the cornerstone of business activities for Lummus is technology licensing, it plans to use its Saudi office to work with local companies to provide a wide range of services, including the provision of engineering work and of spare parts and equipment.

Project acceleration

Since Lummus was spun off by McDermott in a $2.7bn deal in 2020, one of the key strategic changes is a renewed focus on project streamlining and reduced project completion times.

Mukherjee says this has positioned the firm well to win contracts in Saudi Arabia, where the country’s leadership is keen to execute large-scale projects on an accelerated schedule.

“As soon as we learned that we were going to be an independent company, we decided to take advantage of all of the engineering tools that are part of our ecosystem and use them to accelerate the engineering, procurement and construction (EPC) processes,” he says.

“We have used very advanced engineering tools to dramatically reduce the time it takes us to do early engineering and front-end engineering and design work.

“This means that we have to work with very highly skilled engineering contractors and get them started very early on in the procurement cycle.”

As part of Lummus Technology’s new focus on executing projects on an accelerated schedule, it has started to work more closely with several EPC contractors.

“Closer working relationships with these companies are a key way of creating a win-win situation for everyone involved,” he says.

Lummus estimates that the upcoming greenfield oil-to-chemicals projects in Saudi Arabia are each expected to be worth $20bn-$35bn.

“The size of these projects means that there is no EPC contractor in the world that can take them on alone,” says Mukherjee.

Fear of risk

One of the key challenges in Saudi Arabia’s petrochemicals projects sector is that several large international contractors are less keen to take on contracts that use the EPC model due to the potential risks.

Many companies are worried that unpredictable price inflation could mean the EPC contract model would leave them out of pocket if the cost of materials and equipment suddenly increases.

“Even working in consortium, there are very few companies globally that are well equipped to execute complex projects on this scale on an accelerated time schedule,” says Mukherjee. “The technology is there, but there is a risk averseness among many large EPC companies that have been burnt in the past.”

While the projects are difficult and will require close cooperation between different contractors, Mukherjee is confident that his company will play a key role in many of the planned petrochemicals facilities in Saudi Arabia.

He says it is likely that his company will win contracts on many of Saudi Arabia’s upcoming petrochemicals projects, and that the firm is expanding the office so that it can cooperate closely with clients and subcontractors in the country to provide quicker response times to any queries.

“By moving there, we want to make sure that [clients and subcontractors in] Saudi Arabia, Kuwait and the UAE know that they will not have to cross time zones to get immediate responses,” Mukherjee says.


Ujjal Mukherjee, Fadi Mhaini and the Mena team

Market outlook

Lummus is optimistic about how Saudi Arabia’s investment in petrochemicals production will benefit the country’s economy in the long term.

Mukherjee says Saudi Arabia could become an increasingly powerful force in global petrochemicals markets in the coming years if it manages to successfully execute the planned projects to an accelerated schedule.

“What Saudi Arabia has is one of the cheapest raw materials for petrochemicals production. The same is true for Qatar and Abu Dhabi,” he says.

“Very cheap oil and gas gives Saudi Arabia a huge advantage and competitive edge over places like South Korea.”

Mukherjee says that, in the past, South Korea maintained a competitive edge in terms of managing project schedules and costs.

He adds that a petrochemicals project that could be completed in 36-42 months in South Korea would previously have taken 60-72 months in Saudi Arabia.

Now, the difference is being reduced by Saudi Arabia’s plans to execute projects using an accelerated schedule.

“If Saudi Arabia can do it, it will put itself in a position where it will be a dominant force when it comes to manufacturing certain polymers,” he says.

Aligning the scheduled start-up of Saudi Arabia’s new wave of planned petrochemicals projects with trends in the global market is likely to be key to the kingdom's success, according to Mukherjee.

In the past year and half, the prices of key petrochemicals products have been subdued as large projects have come online in China and other locations.

This temporarily created an oversupply in certain chemicals despite global per-capita consumption having increased, Mukherjee says.

He believes global prices will stabilise after 2030 and that demand will outstrip that for both gasoline and diesel.

By the end of this decade, Mukherjee expects that demand for polyethylene in particular will start to grow robustly, as is demand for polypropylene – and that Saudi Arabia will be well positioned to take advantage of this growth.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11170351/main.jpg
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • Dubai tenders stormwater drainage projects

    14 August 2026

    Dubai Municipality has issued three tenders for stormwater and sewerage infrastructure projects serving Hind City, Dubailand and surrounding areas.

    The projects cover drainage networks for Hind 4, connections to the stormwater network in Dubailand and a stormwater trunk line serving Hind 3, Hind 4 and Umm Al-Daman.

    The three tenders were issued through the municipality’s Sewerage and Recycled Water Projects Department.

    All three have bid submission deadlines of 10 September.

    Hind 3 and Hind 4 are two of four zones within Hind City. The Dubai government renamed the Al-Minhad area and surrounding areas as Hind City in 2023. The 83.9-square-kilometre area is served by Emirates Road, Dubai–Al-Ain Road and Jebel Ali–Lehbab Road.

    The DS-316-C1 project covers the construction of sewer and stormwater networks in Hind 4. The stormwater network will include gravity drainage pipelines with diameters of up to 1,600 millimetres (mm), while the sewer network will include pipelines of up to 800mm.

    The TF-24-C1 project will connect developers’ areas in Dubailand to the stormwater network. It includes 18 kilometres (km) of stormwater drainage pipelines with diameters of up to 1,800mm and 3.5km of gravity sewer pipelines with diameters of up to 1,000mm.

    The TF-25-C1 project involves the construction of a 9.2km stormwater trunk line serving Hind 3, Hind 4 and Umm Al-Daman. The trunk line will include gravity drainage pipelines with diameters of up to 2,800mm. It will also serve main roads along its alignment, including sections of Dubai–Al-Ain Road, and is designed to accommodate stormwater flows from part of Emirates Road.

    The projects are intended to strengthen flood resilience and improve the reliability of Dubai’s drainage infrastructure.

    Latest awards

    Dubai has continued to accelerate investment in stormwater infrastructure under the Tasreef programme in recent months.

    In July, MEED exclusively reported that Dubai Municipality had awarded the estimated $100m engineering, procurement and construction contract for the TF-15-C1 package of its Tasreef rainwater drainage network programme to local firm DeTech Contracting.

    The municipality has also recently awarded the TF-15-C2 and DS-204-C1 packages to China State Construction Engineering Corporation and Nael Construction & Contracting, respectively.

    The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033 and serve the emirate for the next century.

    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
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18585485/main.jpg
    Mark Dowdall
  • Construction completed on $8.5bn Neom hydrogen project

    14 August 2026

    Construction work on the $8.5bn Neom Green Hydrogen project at Oxagon in Saudi Arabia has been completed, with the facility entering the commissioning stage ahead of commercial operations targeted for 2027.

    The project is being developed by Neom Green Hydrogen Company (NGHC), a joint venture of Saudi-listed Acwa, US-headquartered industrial gases group Air Products and Neom.

    Acwa's chief financial officer, Abdulhameed Al-Muhaidib, said during the company’s recent H1 2026 earnings call that construction has been completed and commissioning activities are now under way.

    "It’s really more now into commissioning and the target to go into commercial operation next year," he told investors.

    The project is designed to produce up to 600 tonnes a day of green hydrogen, which will be converted into green ammonia for export. It is supported by about 4GW of solar and wind power generation capacity, with the renewable power that is generated being used to produce hydrogen through electrolysis.

    As previously reported by MEED, Air Products is also the exclusive offtaker for green ammonia produced at the facility under a 30-year agreement.

    NGHC said in March that its renewable power generation assets, including the wind and solar farms, and transmission grid, had reached approximately 95% completion.

    India’s Larsen & Toubro (L&T) is the engineering, procurement and construction (EPC) contractor for the project’s renewable energy and transmission and distribution package.

    L&T’s EPC scope includes a 2,200MW solar plant, a 1,370MW wind farm, a 400MW battery energy storage system and a transmission network extending 190 kilometres.

    The project reached financial close in 2023. Once operational, the facility is expected to produce up to 1.2 million tonnes a year of green ammonia for export.

    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
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18567177/main.jpg
    Mark Dowdall
  • Lamprell announces Abu Dhabi offshore project contract

    14 August 2026

     

    Saudi Arabia/UAE-based Lamprell has announced it has won an engineering, procurement, construction and installation (EPCI) contract for a project in Abu Dhabi, for which it will “support the delivery of subsea pipeline infrastructure that will help strengthen offshore energy production and processing capabilities”.

    The project includes the engineering, procurement and fabrication of approximately 50 kilometres (km) of subsea pipeline systems, along with associated flowlines, subsea connections and testing, Lamprell said in a statement.

    With the engineering, procurement and construction (EPC) activities having been completed, preparations are under way for the offshore installation phase, Lamprell added, without revealing further details about the project, its client or value of the contract.

    “Working alongside our sister company Algihaz Marine Contractors, the project demonstrates the value of combining complementary engineering, fabrication and offshore installation capabilities to deliver complex subsea infrastructure safely, efficiently and to a high standard,” the company said in a .

    MEED understands the contract award relates to the first package of the Umm Shaif Gas Cap development project in Abu Dhabi, for which Abu Dhabi National Oil Company (Adnoc Group) and its foreign partners announced achieving a $6.2bn final investment decision (FID) in July.

    MEED previously reported that Adnoc had awarded the EPCI contract for the package related to EPCI and fabrication of a 30,000-tonne gas compression system and associated subsea pipelines, flowlines and other structures, to a consortium of India’s Larsen & Toubro Energy Hydrocarbon (L&TEH) and Lamprell.

    Larsen & Toubro (L&T) confirmed its contract award from Adnoc Group subsidiary Adnoc Offshore earlier in August, describing the order as “ultra-mega”, a term the company uses for contracts valued at more than Rs150bn ($1.57bn).

    Mumbai-headquartered L&T added that the contract will be executed through a consortium, with its subsidiary L&TEH Offshore serving as the lead partner, without mentioning Lamprell.

    The Umm Shaif Gas Cap reserve is located within the offshore Umm Shaif and Nasr hydrocarbons concession, which is operated by Adnoc as the majority stakeholder. The other stakeholders in the concession are Italy’s Eni, France’s TotalEnergies and China National Petroleum Corporation (CNPC).

    Through this project, Adnoc and its concession partners intend to produce up to 600 million cubic feet a day (cf/d) of natural gas by unlocking the Umm Shaif Gas Cap in Abu Dhabi’s Gulf waters.

    Adnoc, in its 21 July statement, said the FID includes three EPC packages totalling $5.1bn for large-scale offshore infrastructure, awarded to consortiums comprising UAE and international contractors. The company did not disclose the contractors or the scope of work.

    MEED reported in May that the following contractors had emerged as frontrunners for the two offshore packages and one onshore package of the Umm Shaif Gas Cap and surface pressure boosting project:

    • First offshore package – fabrication of a 30,000-tonne gas compression system: L&TEH (India) / Lamprell (Saudi Arabia/UAE)
    • Second offshore package – fabrication of another 30,000-tonne gas compression system: McDermott (US)
    • Onshore package – EPC of gas inlet and processing systems on Das Island: China Petroleum Engineering & Construction Company

    Adnoc added that, as part of the FID, it has also awarded a $365m contract to its subsidiary Adnoc Drilling for a 14-well drilling and integrated drilling services scope, to be delivered over 18 months using three existing rigs.

    Umm Shaif Gas Cap project

    Adnoc Offshore, the offshore oil and gas business of Adnoc Group, is the operator of the Umm Shaif Gas Cap and surface pressure boosting project.

    The primary objective is to increase gas production by 550 million cf/d and raise associated condensate output by 50,000 barrels a day (b/d).

    Adnoc Offshore intends to feed about 520 million cf/d of the additional produced gas into Adnoc Group’s sales gas grid.

    Adnoc Offshore is understood to have issued the main EPC tender for the Umm Shaif Gas Cap and surface pressure boosting project in the first quarter of 2025.

    Contractors submitted technical bids for the three EPC packages by 30 October last year, while commercial bids were submitted by the 2 February deadline.

    The following contractors are among those understood to be bidding for the three EPC packages, according to sources:

    Offshore package 1:

    • Saipem (Italy) / Seatrium (Singapore)
    • L&TEH (India) / Lamprell (Saudi Arabia/UAE)
    • NMDC Energy (UAE) / Hyundai Heavy Industries (South Korea)

    Offshore package 2:

    • China Offshore Oil Engineering Company (China)
    • McDermott (US)
    • L&TEH (India) / Lamprell (Saudi Arabia/UAE)
    • NMDC Energy (UAE) / Hyundai Heavy Industries (South Korea)

    Onshore package:

    • Archirodon (Greece)
    • China Petroleum Engineering & Construction Company (China)
    • Engineering for the Petroleum & Process Industries (Egypt)
    • Galfar Emirates (UAE branch of Oman’s Galfar Engineering & Construction)
    • Target Engineering Construction Company (UAE)

    Australian firm Worley has performed front-end engineering and design (feed) work on the project.

    Umm Shaif gas production

    Adnoc Offshore operates the Umm Shaif hydrocarbons development, which is located 150km northwest of the city of Abu Dhabi. The field is located in Abu Dhabi’s offshore Umm Shaif and Nasr hydrocarbons concession, previously operated by former Adnoc Group companies Adma-Opco and Zadco.

    In March and April 2018, Abu Dhabi’s Supreme Council for Financial and Economic Affairs awarded a 10% stake in the Umm Shaif and Nasr offshore block to Eni, 20% to TotalEnergies and 10% to CNPC. Adnoc Group retained the majority 60% interest. The operators produce a total of about 460,000 b/d of oil from the Umm Shaif and Nasr block.

    Gas is produced from the Umm Shaif Khuff and Uweinat reservoirs, as well as from the Arab C and Arab D Early Production Scheme 2. The Umm Shaif Khuff reservoir is a formation that consists of dry gas volumetric reservoirs located in the Umm Shaif field.

    Khuff reservoirs have been in production in Abu Dhabi since August 1989. Umm Shaif Khuff gas is currently produced from 28 active wells within the Umm Shaif field. A majority of these wells supply gas to Adnoc Group subsidiaries Adnoc LNG and Adnoc Gas Processing, with the rest supporting oil reservoirs at the Umm Shaif field through gas injection.

    The Umm Shaif Super Complex (USSC) processes and transports oil, condensates and natural gas in separate pipelines to Das Island for further processing and export. The condensates collected from the USSC are transported to Das Island through an 18-inch pipeline stretching 34.4km, or are spiked into the 36-inch Adnoc main oil line.

    The gas collected from the USSC is transported to Das Island through two 46-inch pipelines, which also run 34.4km.

    Pressure at the Umm Shaif Khuff gas reservoirs will start to decline by the end of 2028. The flowing wellhead pressures at some of the Khuff gas wellhead towers are likely to reduce, so boosting well deliverability and increasing the flowrates is necessary.

    Therefore, new Khuff surface pressure boosting facilities are required to maintain the plateau – with a goal of achieving a 90% gas recovery factor – and increase production beyond the end of the plateau by lowering pressure at the Khuff reservoirs.

    Project tendering exercise

    Adnoc Offshore has been working to advance the Umm Shaif Gas Cap project since at least 2019 and has experimented with several project execution models.

    According to the original schedule, the project was due to be commissioned in 2023, but progress slowed down, primarily due to the Covid-19 pandemic.

    Adnoc Offshore launched a feed-to-EPCI competition for the project in May 2019 and selected the following three entities based on their feed submissions:

    • McDermott (US)
    • National Petroleum Construction Company (UAE; now NMDC Energy) / TechnipFMC (France)
    • Saipem (Italy) / Petrofac (UK)

    Technical bids for the EPCI works on the estimated $1.5bn project were submitted in January 2020 and commercial bids were submitted by August of that year.

    The Saipem/Petrofac consortium emerged as the lowest bidder for the project in September 2020, MEED reported.

    Petrofac is understood to have ultimately withdrawn from the consortium and was replaced by state-owned China Petroleum Engineering & Construction Company (CPECC).

    In 2022, the Saipem/CPECC consortium was understood to be the sole remaining bidder for the Umm Shaif Gas Cap project. Adnoc Offshore engaged the consortium for a revised feed exercise and subsequently received commercial offers on a single-source basis.

    In 2023, Adnoc Offshore cancelled the tendering process for the project and later decided to proceed with a conventional EPC-based project execution model.

    The operator then appointed Worley to undertake feed works on the renewed Umm Shaif Gas Cap project in 2024. Worley has a legacy of involvement in the Umm Shaif hydrocarbons development.

    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
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18556614/main1931.jpg
    Indrajit Sen
  • Hitachi Energy signs Erbil substations deal

    14 August 2026

    Switzerland-headquartered Hitachi Energy has annnounced it has signed an agreement to supply high-voltage equipment for three 132/33kV substations being developed in Erbil in northern Iraq.

    The substations are being built by Iraqi electrical contractor Hero Company under a ID100bn ($76.3m) contract signed with the Kurdistan Region's Electricity Ministry in May. 

    In a statement, Hitachi said it will act as the main technology provider for the project, which has a combined capacity of 753 megavolt-amperes.

    According to local media reports, the substations will be located in Shamamak, Hasarok and Timar. The ministry said the projects are to be completed within two years.

    Hitachi Energy says it has supplied more than 120 mobile substations and delivered more than 30 transmission substations in Iraq over the past 15 years. It also says it has upgraded assets including Iraq's National Control Centre.

    Iraq’s power and water sector is currently undergoing one of its largest expansion programmes in decades amid chronic electricity and water shortages.

    In 2025, it recorded its largest year of investment on record, with more than $17bn in combined contract awards.

    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
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18548939/main3553.jpg
    Mark Dowdall
  • 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
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18499932/main.jpg
    Wil Crisp