Petrofac led JV bags $1.5bn EPC contract for petrochemical project in Algeria

Petrofac and China Huanqiu Contracting & Engineering (HQC) have secured an engineering, procurement, and construction (EPC) contract worth $1.5 billion for a petrochemical project in Algeria, awarded by STEP Polymers.

As the lead partner in the joint venture, Petrofac will be allocated $1 billion of the contract value, while its partner in the JV is a construction subsidiary fully owned by China National Petroleum Corporation (CNPC).

STEP Polymers, a subsidiary of Algerian national oil company Sonatrach, has conditionally awarded the contract to Petrofac, and this selection follows a bidding process initiated in April 2021. The joint venture between Petrofac and China Huanqiu Contracting & Engineering emerged as the lowest bidder for the project.

The petrochemical EPC project has an expected completion period of 42 months.

Petrofac and China Huanqiu Contracting & Engineering bag $1.5bn EPC contract for petrochemical project in Algeria from STEP Polymers. Photo courtesy of Petrofac Limited.

The new petrochemical plant will be situated in the Arzew Industrial Zone, located to the west of Algiers. Petrofac’s scope of work encompasses the design and construction of two integrated processing units.

The joint venture will oversee the establishment of a propane dehydrogenation facility and a polypropylene production unit, along with the necessary utilities and infrastructure for the project site. Once operational, the petrochemical plant is projected to have an annual production capacity of 550,000 tons of polypropylene.

Tareq Kawash — Petrofac group chief executive said: “We are proud to be supporting our customer to deliver this strategic project. Algeria is a core market for Petrofac and we are committed to supporting the long-term delivery of critical infrastructure as the country plays an increasingly important role as a major energy producer and moves into major petrochemical projects.”