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Committed to renewables and a new petrochemical industry

Article - June 25, 2012
With an eye to the future, Sonatrach moves into new sectors
Algeria expects to gain an additional 30 million tons of refining capacity from its plans to build five new oil refineries. However, the lion’s share of the budget provided by the 2009-2013 Investment Plan is aimed at developing the petrochemical industry in order to add further value to Algeria’s primary resources.

“We are entering a new era: we wish to implement a solid basis for the petrochemical industry, and also to upgrade it in order to become a player in the international market. This is really our new challenge,” says Youcef Yousfi, Minister of Energy and Mines. “We also plan to become a big producer and exporter of fertilizer, by bringing together our mining, oil and gas industries: we have important phosphate deposits which should be exploited.”

For 2015, Sonatrach plans to develop sectors such as plastics (polyethylene, polypropylene, resins and polymers); rubber textile fibers (nylon six), which can also supply the Algerian textile industry; agricultural fertilizers; and production subsidiaries such as helium and aluminum.

Partnerships already exist to help expand the business, with Egypt’s Orascom Construction Industries (OCI) and Oman’s Suhail Bahwan Group Holding (SBGH), and two factories to produce ammonia and urea are operating in Arzew.

“The development plan aims to supply the Algerian national market with petrochemical products to reduce our import bill and promote the development of the SME sector,” adds Abdelhamid Zerguine, Sonatrach’s CEO.

Energy analysts are forecasting a massive step-up in petrochemicals production in the country once the Arzew petrochemicals complex is completed in 2014, albeit two years behind schedule due to the global economic downturn.

Algeria’s ethylene and polyethylene capacities are forecast to remain static until 2014, after which they will increase with the addition of new capacity. By 2014, ethylene capacity should be at 1.23 million tons per annum (tpa) and polyethylene capacity totaling 878,000 tpa, with new capacity also expected in the production of other derivatives.

Sonatrach is also investing in renewable energy, often acting more as a provider of finance than directly engaged in the core activity.

“Renewable energy or mixed energy projects are Sonelgaz’s responsibility, because it is mandated to supply electricity. In Hassi R’mel, we launched a new hybrid gas/solar power station in 2011, the first one of its type, and Sonatrach was a provider of financing,” says Yamina Hamdi, Vice-President of Commercial Activity at Sonatrach.

Two other hybrid power stations will be built on the same principle in 2013: Maghaïr in El Oued wilaya (East Algeria) and Naama in El Bayad wilaya (West Algeria); and a further four 300MW hybrid power stations are planned for 2016-2020. These power stations combine parabolic mirrors, covering an area of 180,000m2 and producing 30MW of solar power, with a 120MW SGT800 Siemens gas turbine station. This combination enables a significant reduction in CO2 emissions and is consistent with Sonatrach’s 2009-2013 investment plan, which includes safety and environmental considerations. Thus the group, already renowned for its technological and financial prowess, is developing its green credentials.