Algeria’s Sonatrach lets contract for grassroots refinery

Algeria's state-owned Sonatrach has let a contract to a joint venture of Técnicas Reunidas SA of Spain and South Korea’s Samsung Engineering Co. Ltd. for construction of the operator’s previously proposed 5 million-tonne/year grassroots refinery at Haoud El Hamra in Hassi-Messaoud (OGJ Online, Mar. 26, 2018).

As part of the $3.7-billion contract, Técnicas Reunidas and Samsung Engineering will jointly deliver engineering, construction, and procurement (EPC) for the project, which will take 52 months to complete, Sonatrach and Técnicas Reunidas said in separate releases.

The JV’s scope of work includes construction of the completely new refinery, including all process and environmental units, as well as the necessary auxiliary services. Major units to be implemented as part of the project include a crude distillation unit, hydrocracker, gas oil hydrodesulfurizer, naphtha hydroprocessing unit, catalytic reformer, isomerization unit, solvent deasphalting unit, among others, all to be equipped with the latest technologies targeting deep conversion, clean-fuel production, and fulfillment of stringent environmental requirements, according to Técnicas Reunidas.

To achieve strict environmental standards, the new refinery also will include an amine recovery unit, a sulfur recovery unit, and a wastewater treatment plant.

As leader of the JV, Técnicas Reunidas holds 55% interest in the EPC contract, which amounts to a value exceeding $2 billion, the service provider said.

Part of Sonatrach’s program to increase Algeria’s domestic production of cleaner transportation fuels and energy products conforming to Euro 5-quality standards to help meet rising demand in the country as well as on export markets, the Hassi-Messaoud refinery is scheduled for start-up during first-half 2024.

Sonatrach previously let a series of contracts to Amec Foster Wheeler PLC to provide front-end engineering and design for three grassroots refineries—including Hassi-Messaoud—that, combined, would add 15 million tpy of fresh refining capacity in Algeria (OGJ Online, Mar. 8, 2016).

Alongside Hassi-Messaoud, two new 5 million-tpy refineries were to be built both in Biskra and Tiaret, with all three refineries to be configured for processing domestic Algerian crude oil. To date, however, Sonatrach has announced investment plans only for the proposed second refinery at Tiaret.