Sonatrach updates refining plans

State-owned Sonatrach is weighing the purchase of a refinery abroad to process Algerian-produced crude oil to further help reduce Algeria’s high costs for and reliance on imported petroleum products, Abdelmoumen Ould Kaddour, Sonatrach’s chief executive officer, told Algeria Press Service.

Content Dam Ogj Online Articles 2018 03 180326 Sonatrach Skikda Final

State-owned Sonatrach is weighing the purchase of a refinery abroad to process Algerian-produced crude oil to further help reduce Algeria’s high costs for and reliance on imported petroleum products, Abdelmoumen Ould Kaddour, Sonatrach’s chief executive officer, told Algeria Press Service (APS).

Without disclosing specific details of the potential transaction, Ould Kaddour said Sonatrach has launched a project to consider buying a refinery outside of Algeria, negotiations for which are still under way.

The proposed purchase comes as part of Sonatrach’s new strategy of resource development, under which the company plans to process its own oil and gas production instead of selling it into the market, according to APS.

Content Dam Ogj Online Articles 2018 03 180326 Sonatrach Skikda Final

Alongside the potential refinery purchase, Ould Kaddour also disclosed that Sonatrach expects to complete the refurbishment and revamping of the operator’s 2.7 million-tonne/year refinery in Algiers before yearend in a project that previously intended to increase crude processing capacity at the site to 3.6 million tpy (OGJ Online, June 5, 2017; Dec. 22, 2010; Sept. 24, 2010).

A contract launching Sontrach’s previously announced construction of a grassroots 5 million-tpy refinery at Hassi Messaoud is scheduled to be signed within the next 2-3 months, while relevant provisions for an earlier announced 5 million-tpy refinery at Tiaret—which will cost between $2-5 billion—has yet to be launched (OGJ Online, Mar. 8, 2016).

Ould Kaddour did not address plans for a third previously announced 5 million-tpy refinery the company previously said it would build in Biskra.

In addition to the three proposed grassroots refineries at Hassi Messaoud, Tiaret, and Biskra, Sonatrach’s program to help meet energy demand of Algeria’s domestic market by 2040 also includes construction of a 4.6-million tpy gas oil hydrocracker and a 4-million tpy catalytic reformer to enable production of Euro 5-quality diesel and gasoline at its existing 16.5 million-tpy refinery in Skikda, both of which most recently were scheduled for completion in 2019 (OGJ Online, Dec. 20, 2016).

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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