State-owned Sonatrach SPA and Total SA have signed two agreements to further Algerian gas and petrochemicals development as part of the companies’ comprehensive partnership announced in 2017 (OGJ Online, June 11, 2018; May 11, 2018).
As part of the extended agreements, Sonatrach and Total, along with Algeria’s National Agency for the Valorization of Hydrocarbon Resources (Alnaft), signed a new concession contract to jointly develop the Erg Issouane gas field located on the Tin Fouyé Tabankort (TFT) Sud permit, Total said.
Sonatrach 51% and Total 49% will develop the reserves of Erg Issouane located on the TFT Sud permit—which is located south of TFT field and of which Total is a long-standing partner—estimated at more than 100 million boe.
The development, which represents an investment of about $400 million, will be tied back to the existing TFT gas treatment unit by a 22 km-long gas pipeline.
The partners, which also have signed a gas market agreement, said that—while the concession contract will become effective upon approval by the Algerian authorities—first gas from the project is due in late 2021.
Alongside the Erg Issouane agreement, Sonatrach 51% and Total 49% also have entered a shareholder agreement to create the Sonatrach Total Entreprise Polymères joint venture.
STEP will be responsible for executing a joint petrochemical project that will include a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tonnes/year in Arzew, western Algeria.
Sonatrach and Total said the project will enable valorization of large quantities of propane produced locally by transforming it into polypropylene, a plastic for which demand is strongly growing.
The partners said they plan to begin front-engineering and design on the Arzew complex in November.
A timeframe for startup of the complex was not disclosed.
