Sonatrach lets contract for Gassi Touil gas project

Algeria’s state-owned Sonatrach has awarded JGC Corp. a contract valued at ¥150 billion to construct a gas processing facility at the integrated Gassi Touil gas project.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 12 -- Algeria’s state-owned Sonatrach has awarded JGC Corp. a contract valued at ¥150 billion to construct a natural gas processing facility at the integrated Gassi Touil gas project.

Under the 42-month turnkey engineering, procurement, and construction contract, JGC will build gas gathering and processing facilities to produce 12 million cu m/day of gas from seven gas fields in eastern Algeria.

JGC will oversee the entire project at the complex, which includes a facility for collecting and distributing output from 54 gas wells in the Gassi Touil region, 350 km of pipelines, and equipment to collect the oil extracted as a byproduct.

The Gassi Touil development is expected to supply gas as feedstock to the 4.7-million tonne/year GL3Z LNG plant at Arzew, now under construction by a joint venture of Snamprogetti and Chiyoda, with completion set for yearend 2012.

“The [upstream] project will allow Sonatrach to send out additional volumes of natural gas, LPG and condensate from the end of 2012, consolidating Sonatrach’s position as a reliable gas industry participant,” Sonatrach said.

The award to JGC follows one in April to Daewoo Engineering & Construction Co. for work on the LNG plant being built at Arzew, as part of Sonatrach’s Gassi Touil gas field development.

According to analyst Global Insight, the Gassi Touil project has been greatly delayed, causing Sonatrach in 2007 to evict Gas Natural and Repsol-YPF SA, which were working on the integrated LNG export project under a production-sharing agreement.

“The eviction caused widespread fear that Algeria would renationalize many other projects amid a resource-nationalist wave simultaneously sweeping the parliament, something that in the end proved unfounded,” Global Insight said.

Since its takeover, Sonatrach has been pursuing the project itself, awarding turnkey contracts to developers. According to Global Insight, these awards have “benefited companies such as JGC, which has a long history in Algeria and has worked in close cooperation with Sonatrach many times before.”

Contact Eric Watkins at hippalus@yahoo.com.

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