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The Step joint venture between Algeria’s state-owned oil-and-gas firm Sonatrach and Total chose in September US congolmerate Honeywell as technology supplier for a propane dehydrogenation and polypropylene (PDH-PP) plant planned at the Arzew downstream hub in western Algeria.
Honeywell’s selection by Step—51pc owned by Sonatrach with Total holding the remaining 49pc—came as no surprise, given the firm’s extensive local and regional experience. But the award was a welcome sign that the project is moving beyond the drawing board. The partners have discussed a petrochemicals venture for more than a decade,while Algeria’s wider plans for downstream expansion over the same period have progressed at a similarly glacial pace.
The timing was also important—coming just after yet another change of leadership at Sonatrach and potentially indicating that the company’s new head would maintain his predecessor’s policy of nurturing often rocky ties with international oil companies (IOCs).
Sonatrach and Total signed the Step shareholders’ agreement in October last year and the articles of association in January. The planned plant will convert 640,000t/yr of locally-abundant propane into 550,000t/yr of polypropylene, a crucial petchems building block.
In a late September strategy update,Total anticipated an FID on the estimated $1.4bn plant in 2021 and noted that the projected internal rate of return was more than 7pc. Front-end engineering and design (Feed) work was said to be under way.
Petroleum
Honeywell’s selection by Step—51pc owned by Sonatrach with Total holding the remaining 49pc—came as no surprise, given the firm’s extensive local and regional experience. But the award was a welcome sign that the project is moving beyond the drawing board. The partners have discussed a petrochemicals venture for more than a decade,while Algeria’s wider plans for downstream expansion over the same period have progressed at a similarly glacial pace.
The timing was also important—coming just after yet another change of leadership at Sonatrach and potentially indicating that the company’s new head would maintain his predecessor’s policy of nurturing often rocky ties with international oil companies (IOCs).
Sonatrach and Total signed the Step shareholders’ agreement in October last year and the articles of association in January. The planned plant will convert 640,000t/yr of locally-abundant propane into 550,000t/yr of polypropylene, a crucial petchems building block.
In a late September strategy update,Total anticipated an FID on the estimated $1.4bn plant in 2021 and noted that the projected internal rate of return was more than 7pc. Front-end engineering and design (Feed) work was said to be under way.
Petroleum
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