Econostrum | Economic News in the Mediterranean

TotalEnergies denies plans to withdraw from the Arzew project in Algeria

Written by Frédéric Dubessy on Thursday, August 25th 2022 à 17:30 | Read 695 times

TotalEnergies is present alongside Sonatrach in the Arzew complex project (photo: DR)
TotalEnergies is present alongside Sonatrach in the Arzew complex project (photo: DR)
ALGERIA / FRANCE. Rejecting information published by the website Africa Intelligence, TotalEnergies said on Wednesday, August 24, 2022, continue its involvement in the project to build a petrochemical complex in Arzew in Algeria. "The information relayed by the article of Africa Intelligence is false," said a spokesman for the French company to the Reuters news agency.

The digital newspaper invoked as reasons for this withdrawal "a lack of profitability" and "the slowness of the Algerian government". It would have been announced to Sonatrach, according to the same source, by mail in July 2022.

As part of a global partnership initiated in 2017, the French company had signed, in October 2018, a shareholders' agreement, with the Algerian Sonatrach to create the joint venture Sonatrach Total Entreprise Polymères (STEP). This company has since been in charge of leading the petrochemical project common to both hydrocarbon giants located in the wilaya of Oran, 400 kilometers west of Algiers. It includes the construction of a propane dehydrogenation plant (PDH) and a polypropylene (PP) production plant with a capacity of 550,000 tonnes per year. The technical design would have been completed in February 2022.

14 billion investment

STEP plans to invest $1.4 billion (€1.4 billion) in this operation. The necessary budget will be matched 51% by the Algerian company (51%) and 49% by its French counterpart.

The future complex will be larger since it will also host a methanol production unit (Sonatrach Arzew Methanol) as well as a methyl tertiary-butyl ether, or MTBE, (Sonatrach Arzew Methyl Tertiary Butyl Ether). Sonatrach will finance and operate these two plants on its own.

The commissioning of the Arzew complex is scheduled for 2026.

"The production will be intended primarily for the domestic and Mediterranean market, Total being in charge of marketing the rest of the production on Europe," said a statement from TotalEnergies in May 2018..

This controversy comes as Emmanuel Macron is on Algerian soil for a visit described as "friendship". The President of the French Republic is due to visit Algiers, where he will have a meeting with his counterpart Abdelmadjid Tebboune, and then to Oran.

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