Algeria’s Sonatrach and France’s Total have signed two agreements continuing its partnership agreed last year.
The deals include a new concession contract to jointly develop the Erg Issouane gas field located on the TFT Sud permit, signed by Sonatrach, Total and Alnaft, the National Agency for the valorization of hydrocarbon resources.
The TFT Sud permit is located south of the Tin Fouyé Tabankort (TFT) field. Sonatrach (51 percent) and Total (49 percent) will develop the reserves of Erg Issouane located on the TFT Sud permit estimated at more than 100 million barrels of oil equivalent (boe).
The development, which represents an investment of around $400 million, will be tied back to the existing TFT gas treatment unit by a 22-kilometer-long gas pipeline, with the first gas is expected late 2021.
The partners have also signed a gas marketing agreement.
Under the second deal, the two companies agreed to create a joint venture named Sonatrach Total Enterprise Poly Polymères (STEP).
STEP will be responsible for carrying out a joint petrochemical project in Arzew, western Algeria. The project includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tons per year.
The two partners (Sonatrach 51 percent, Total 49 percent) are planning to start the front-end engineering and design (FEED) from November. This project will allow to valorize the propane, produced in large quantities locally, by transforming it into polypropylene, a plastic for which demand is growing strongly.
In June 2017, Total signed a new concession contract for a period of 25 years to extend the exploitation of the field, giving Total a 26.4 percent interest alongside Sonatrach (51 percent) and Repsol (22.6 percent).
Total has also established an LNG presence in Algeria with the acquisition of Engie’s upstream assets. This transaction added 4.6 million tons to the group’s global LNG portfolio thanks to supply agreements with Sonatrach.