The CEO of Sonatrach in Algeria, Toufic Hakkar, announced the reasons that prompted the French energy company, Total Energy, to withdraw from the giant petrochemical project, which is located in the Arzew industrial zone, which was contracted today, Sunday, June 11 (2023), between the two companies. Algeria’s Step Polymers, and British Petrofac.
Hakkar said, on the sidelines of the contract signing ceremony with the British company, which the specialized energy platform participated in covering, that the French company Total Energy saw that the new project for its polypropylene production in Arzew was not financially in line with its aspirations, so it withdrew independently, while choosing Sonatrach will also continue to do so independently.
He explained that the agreement with Total Energy to complete the Arzew petrochemical project in Algeria was signed in 2016, according to which a joint venture was established in 2018, and Sonatrach and Total worked together to develop the project through feasibility studies, market and preliminary engineering studies.
Arzew petrochemical project in Algeria
The CEO of the Algerian company, Sonatrach, Tawfiq Hakkar, said that his company met at the end of the studies, and after the financial offer for the Arzew petrochemical project and setting it at $1.5 billion, with the parties to make the final investment decision, and each company has its own accounts and strategy.
Hokkar thanked the French company Total for its work on the project during the past period, from 2017 to 2022, in addition to confirming that it is ready to help Sonatrach to complete this project and other projects in various fields.
Toufik Hakkar explained that the Arzew petrochemical project in Algeria is one of the most important projects completed in the history of Sonatrach, as it follows a project established 45 years ago in the state of Skikda, according to statements monitored by the specialized energy platform.
According to Hakkar, the implementation work of the giant petrochemical project in Algeria is scheduled to start next July 2023, pointing out that there is great hope in the partners to complete it on the dates set for it, especially since the project is strategic and will activate the industrial movement in the country.
The CEO pointed out that Sonatrach has worked since 2017 to define the parameters of the Arzio petrochemical project, through feasibility, market and engineering studies, before establishing the “Step Polymers” company in charge of completing the complex, and searching for the necessary financing in 2018.
$1.5 billion is non-reviewable
The CEO of Sonatrach, Toufic Hokkar, touched on the cost of the Arzew petrochemical project in Algeria, explaining that the value of the deal, set at about $1.5 billion, is “non-reviewable,” on the grounds that it took into account the market situation after the Corona pandemic, which leads to excluding the possibility of raising the value later. .
For his part, Minister of Energy and Mines Mohamed Arkab said that the project is of “great importance” for the Algerian economy, as “it falls within the framework of the general policy approved by the country’s supreme authorities in its part related to the valuation of natural resources, especially hydrocarbons and mines.”
He explained that the state aims, through the petrochemical development strategy, to “transform more than 50% of primary production, compared to 32% at present, to create about 10,000 direct job opportunities, to export more than $5 billion, compared to $3 billion currently, and to double the added value in operations.” conversion and production 5 times.
It is noteworthy that Step Polymers, a subsidiary of Sonatrach, had signed today, Sunday, a contract to start the implementation of a huge petrochemical project in Algeria, with the British Petrofac Company, which leads an alliance that includes a construction company belonging to the Chinese National Oil Company.
On May 18, the British company Petrofac announced that Step Polymers had chosen it to obtain a petrochemical project engineering contract, with a value of $ 1.5 billion, according to an official statement of the company.
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