Técnicas Reunidas and Samsung close $3.7bn Algerian refinery deal

The National Petroleum Corporation of Algeria (Sonatrach) has signed a $3.7bn deal with a consortium led by Spain’s Técnicas Reunidas and Samsung Engineering to build the country’s sixth oil refinery.

The consortium will build the plant in Haoud El Hamra, in central Algeria, on an engineering, procurement, construction basis.

Técnicas Reunidas will be responsible for 55% of the contract, which includes environmental work and auxiliary infrastructure.

When complete, in the first half of 2024, the refinery will be able to process 5 million tonnes of crude oil a year, or 100,000 barrels a day. This will make it the second largest in the country after the Skikda Refinery on the Mediterranean coast.

Kamel Eddine Chikhi, the recently installed chief executive of Sonatrach, said: "The signing of this contract confirms our commitment to further develop our refined products in hydrocarbon resources to meet on the one hand, the needs of the national market, and on the other hand, to contribute to the economic and social development of our nation through the strengthening of its industrial fabric."

The contract, which was announced at the end of 2019, was officially signed at a ceremony in Algiers yesterday after a procurement process that began in November 2017, and which attracted seven bids.

As well as petrol, the plant will produce propane, butane, kerosene and bitumen.

Técnicas Reunidas is a Madrid-based company specialising in industrial plant projects. It has designed and built 421 refining units worldwide over the past 60 years.

In 2014, Samsung won a $1.4bn order to build two power plants in Algeria as part of a joint-venture.

Image: Kamel Eddine Chikhi (fifth from right) at the signing ceremony in Sonatrach’s headquarters on 8 January (Sonatrach)

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