The association promised to guarantee a price of 55,071 dinars per ton ($890.10 per ton). The project is scheduled to be completed in 2012. By that time, Algeria's liquefied natural gas production will rise to 30 million tons per year, and Sonatrach will be responsible for the downstream business. Vice President Abdelhafid Feghouli said.
The contract will establish a third LNG production line in Arzew. The contract was awarded to Petrofac, a British oil service company, and IKPT, Indonesia after a public tender at the beginning of this month. However, Sonatrach stated that the group could not provide the project. Plan for adequate guarantees.
The second bid was jointly awarded by Snamprogetti and Chiyoda.
The tender of the Petrofac-IKPT community was rejected because the association was not able to provide sufficient guarantees for the project's production capacity and total investment within the time frame specified by Sonatrach.
France’s Technip also submitted a bid for the project, promising to build a 4.88 million tons/year LNG project with a total investment of US$5.92 billion.
Initially, the project was developed by Repsol-YPF in Spain and a company in Algeria, but the project was cancelled because of delays in implementation. Sonatrach decided to finance Xin's production line.
Algeria is one of the member countries of OPEC and is the fourth largest liquefied natural gas producer in the world. It has two LNG production lines in Skikda and Arzew.
Algeria supplies natural gas through pipelines to the European market, especially Spain and Italy.
Algeria is the world’s largest exporter of liquefied natural gas and Algeria is preparing to increase production capacity. Last year, Sonatrach awarded US Kellogg Brown and Root a $2.85 billion contract to build a 4.5 million-ton/year production line in Skikda, which is scheduled to be completed in 2011.
Algeria sign LNG production line agreement with Italian/Japanese community
Algeria’s state-owned oil and gas company Sonatrach signed a contract with the Italian company Snamprogetti and Japan’s Chiyoda Group to establish a 4.7 million-ton/year liquefied natural gas production line. The production line will be established in Arzew with an investment of US$4.55 billion. Sonatrach said on Sunday.