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Hassi Messaoud Refinery

Hassi Messaoud Refinery: Técnicas Reunidas confirms relaunch of the $4 billion project

28^th Nov 2024, ALGERIE ECO

Sonatrach Group, Spanish company Técnicas Reunidas, and Chinese group Sinopec have agreed to relaunch the Hassi Messaoud refinery construction project in southern Algeria. This announcement was made on November 27 by Técnicas Reunidas in a communication to Spain's National Securities Market Commission (CNMV), as reported by Spanish newspaper Cinco Dias (El Pais).

Initially awarded by Sonatrach in late 2019 to a consortium including Técnicas Reunidas and Samsung Engineering (South Korea), the project has undergone a change in partners. Samsung Engineering has been replaced by Sinopec, a strategic partner of Técnicas Reunidas since their agreement signed in September 2023.

The project will be implemented through a joint venture. Técnicas Reunidas will hold 51% of the shares, while Sinopec will own 49%. The total contract amount is approximately $4 billion (3.8 billion euros). Of this budget, more than $2 billion (1.9 billion euros) will be allocated to Técnicas Reunidas.

This project is considered a strategic priority for Algeria. It aims to strengthen local production of energy products to meet growing domestic demand. The refinery, with a processing capacity of five million tons, is expected to be completed in 65 months, with the first refining units scheduled to begin operations by the end of 2027, according to details provided by Técnicas Reunidas to the CNMV.

This is the fourth major project carried out by Técnicas Reunidas and Sinopec since their strategic alliance. Additionally, in June, Sonatrach signed a memorandum of understanding with Sinopec. This agreement aims to expand their cooperation, particularly in exploration, renewable energy, petrochemicals, and petroleum engineering.

For its part, South Korean company Samsung Engineers & AHEAD (Samsung E&A) announced on Thursday that it had been notified of the cancellation of a 1.9 trillion won ($1.36 billion) order placed by Algeria in 2020, according to South Korean news agency Yonhap Agency. Samsung E&A indicated that it had failed to reach a compromise with Sonatrach on modifications to the contract terms, according to the same source. The Korean company emphasized that there were no financial losses resulting from the order cancellation.

In July, Sonatrach's Vice President of Refining and Petrochemicals, Slimane Slimani, indicated on Radio Channel 3 that the Hassi Messaoud refinery project had been relaunched. President of the Republic, Abdelmadjid Tebboune, had also insisted on relaunching this project, which was on the agenda of two Council of Ministers meetings in December 2023 and January 2024.

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#algeria #sonatrach #hassimessaoud #crudeoil #oilfield