Abstract
A two-year delay in the Arzew petrochemical complex is a set-back for the
development of the Algerian
petrochemicals industry, but is typical of
project delays seen across the world amid the global economic
downturn and
the financial crisis, according to BMI' s latest Algeria Petrochemicals Report.
Sonatrach
has announced that it will invest US$63.5bn on petrochemical
plants and refineries as well as oilfield
expansion between 2009 and 2013.
This represents a 41% increase from an estimated US$45bn planned
for the
five-year period 2008-2012. The investments are in expectation of a rise in
demand for oil and oil
prices, reflecting the company' s strategy of
maintaining 1.4mn barrels of oil equivalent per day (boe/d) of
production.
Algeria plans to invest a total of US$45.5bn in its energy sector over
2008-2012. Sonatrach is
expected to invest the majority of the figure,
US$35.8bn, while foreign partners will make up the
remainder, US$9.7bn,
according to energy minister Chakib Khelil. The investment is specifically
aimed
at increasing the North African state' s oil production and gas
exports, Khelil was quoted as saying.
Sonatrach is expected to invest
heavily in the development of North Africa' s pipeline network, which will
be crucial if it is to boost gas exports to Europe. Over the course of the
next five years the company plans
to upgrade the existing network of
16,200km of oil and gas pipelines and extend it by over 5,000km.
The round
of contracts signed in July 2007 will see the construction of a 1.1mn tonnes
per annum (tpa)
ethane cracker at Arzew, which will be used to manufacture
410,000 tpa of MEG, 350,000 metric tonnes
of HDPE and 450,000 metric
tonnes of LLDPE. This will be overseen by a 51:49 joint venture (JV)
between Total and Sonatrach and is expected to be commissioned in 2012. Early
2009 reports suggest
that the technology and design contract awards for
the cracker will be made in H209 and that the
completion of the complex
would take place in 2014 and not 2012 as originally planned. The Almet
consortium was also granted a US$1bn contract to construct a 1mn tpa methanol
plant. However, there is
a possibility that project targets will overrun.
The projects are already well beyond the timeframe
originally envisaged by
the government, although the contracts mean that they are now likely to go
ahead.
In addition, two major new fertiliser complexes are on track in
Arzew. The US$1.9bn Sorfert Algérie
complex, a 51:49 JV between Egypt' s
Orascom Construction Industries (OCI) and Sonatrach, is
scheduled to
complete in 2011.
Algeria' s ethylene and PE capacities are forecast to
remain static at 130,000 tpa until 2014, after which
they will increase
with the addition of new capacity. By 2014, ethylene capacity should be 1.23mn
tpa
and PE capacity should reach 930,000tpa, with new capacity in the
production of other derivatives. This
is two years later than we forecast
in the previous quarterly report. In the Middle Eastern Petrochemicals
Business Environment Rankings matrix, Algeria remains in 10th place with an
overall score of 35.2
points, down 2.7 points since the previous quarter
due to the two-year delay to the Arzew petrochemical.
On nearly every
indicator, Algeria comes last by a long margin and is likely to remain that
way until the
complex comes onstream.
| 
View Cart
