Algeria’ Sonatrach awards UK’s Petrofac consortium $300m EPC contract

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ALGIERS- Algeria’ state-owned hydrocarbons firm Sonatrach awarded Uk’s international energy services company Petrofac and its consortium partner Genie Civil et Batiment (GCB) a provisional award for an engineering, procurement and construction (EPC) contract for the Tinrhert Development Project in the province of Illizi.

The contract is valued at approximately $300m and has been awarded by state-owned oil company Sonatrach for EPC2 of the Tinrhert Field Development Project.

The EPC2 involves a new central processing facility (CPF) featuring inlet separation and decarbonisation units.

Petrofac secured the contract for EPC1 of the Tinhert field in 2018. The EPC1 covered the delivery of a new inlet separation and compression centre and extending the existing Ohanet CPF.

Under the latest contract, Petrofac will also be responsible for tie ins to the existing Alrar separation and boosting facilities, in addition to commissioning, start-up, and performance testing.

The development is expected to boost natural gas production at the field while reducing CO₂ from the gas reserves, within specifications for the global market.

Petrofac engineering and construction division chief operating officer Elie Lahoud said: “The Petrofac and GCB consortium is testament to our focus on local delivery, through investment in local supply chains and work forces.

“We are very pleased to have been notified of this provisional award by Sonatrach, which reflects their confidence in our ability to drive in-country value, whilst safely delivering strategically significant energy infrastructure.”

Tinrhert Development Project is an expansion project associated with the Sonatrach-operated Tinrhert Project.

On another level, the national oil and gas firm Sonatrach has maintained its privileged position in the field of hydrocarbons and is moving on the right track.

The company is among the 15 best oil companies in the world, ranking 12 according to the 2022 ranking of the British specialist magazine, The Economist.

Sonatrach, thus, outperforms major oil companies, such as; Qatar Energy and the Mexican company Pemex.

The magazine referred, in its ranking, to Sonatrach’s 2021 achievements, which achieved, noteworthy, an export turnover at the end of May 2022 of 21.5 billion dollars, against 12 .6 billion at the end of May 2021, up 70%, indicated a report on the group’s achievements during the first 5 months of the current year.

As for the primary production of hydrocarbons, it reached 79.2 million tonnes of oil equivalent (TOE) at the end of May 2022, up 2% compared to the achievements at the end of May 2021.

The volume of hydrocarbon sales (exports + National market) amounted to 67 million TOE, up 0.3% compared to the achievements at the end of May 2022, while imports of petroleum products reached a volume of 95,000 tons, down 14% compared to the same period.

Sonatrach’s production volume for 2021, it should be noted, exceeded 185 million tonnes of oil equivalent, which strengthened Sonatrach’s position in the world energy market and made it rank among the most important companies.

The best is yet to come. The Sonatrach Group, which announced three discoveries, including two of gas in its own effort and an oil discovery in partnership with the Italian “Eni”, is engaged in negotiations with several foreign partners with the aim to ink several contracts by the end of 2022.

A coincidence? Certainly not. This major player in the oil industry draws its strength from its ability to be a fully integrated group across the entire hydrocarbon value chain. Its management has a lot to do with it. The appointment of Toufik Hakkar was an asset as he, given his rich career at the firm, restored the company’stability, desired by the President of the Republic, Abdelmadjid Tebboune.

Noting that the boss of Sonatrach is also ranked by Forbes magazine as the 4th best CEO in the Middle East.

Forbes Middle East magazine published the ranking of the best 2021 CEOs of the Middle East, who have managed to strategically lead the wheel of growth and development in their countries despite the “Coronavirus” pandemic.

Toufik Hakkar, CEO of the Sonatrach group, was selected among the best leaders who make a significant contribution to the economies of the region, ranking fifth in the list comprising leaders from 24 nationalities, and representing 21 sectors.

Interviewed by Radio Algerie (International channel), Mr. Hekkar underlined that the National Hydrocarbon Company Sonatrach has been able to maintain investments and face the repercussions of the global health crisis, induced by Covid-19.

As such, Mr. Hakkar explained that “the health crisis has pushed most of the foreign partners and collaborators to return to their country of origin”. To deal with this situation, “Sonatrach had recourse to national skills”, indicated its CEO. Consequence: “the company has made significant savings in foreign currency”, noted Toufik Hakkar, who assured that this “special” year was the opportunity to take stock of the structure of Sonatrach’s expenditure.

The Head of the national hydrocarbon company has decided to further open the field to partnership with national public and private companies…. “We have also decided to collaborate with Algerian micro-enterprises and start-ups,” added the CEO.

The state-owned hydrocarbon company is, also, active in the field of exploration. “Our objective is to renew the consumed reserves at more than 100%, currently we are at 90% renewal rate”, indicated Mr. Hakkar.

Another announced objective: to maintain, or even increase, the production levels of the fields qualified, by the CEO of Sonatrach, of: “mature fields”, requiring a maintenance effort. Sonatrach also intends to increase its refining capacities, by making new investments in petrochemicals.

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