Petrofac has signed a $1.5 billion engineering, procurement and construction contract with STEP Polymers, a subsidiary of Sonatrach, for the design and construction ofa petrochemical complex in Algeria.

The contract will be carried out jointly by Petrofac and China Huanqiu Contracting Engineering Company. The latter is a wholly owned construction subsidiary of China National Petroleum Corporation. Petrofac's share of the contract will exceed $1 billion.

Tareq Kawash, Petrofac Group CEO, said: "I am delighted to celebrate with our partners and customers the official award of this groundbreaking project in Algiers. The contract expands Petrofac's portfolio in the Petrochemicals sector, building on our 25-year track record of safely delivering strategic energy infrastructure in Algeria while developing the local workforce.

The signing of the contract follows the receipt of the conditional award notice announced by the energy Services company last month. The petrochemical complex will be built in the Arzew industrial zone west of Algiers and is expected to produce 550,000 tonnes of polypropylene per year. The polypropylene produced will be used to meet the needs of the Algerian domestic market, while the remaining product is planned for export to European, Asian and African markets.

Under the contract, Petrofac and HQC will be responsible for the design and construction of two main integrated processing units. The joint venture will deliver a new propane dehydrogenation facility and polypropylene production unit, as well as associated utilities and infrastructure at the project site.

The petrochemical EPC project is scheduled to be completed in 42 months. It will also open up 450 positions during the operational phase as well as 2,000 indirect jobs. Sonatrach announces the signing of a financing agreement between STEP Polymers and the National Bank of Algeria. The agreement will facilitate the financing of up to 70% of the construction of the polypropylene petrochemical complex, while the remaining 30% will be funded by equity.Editor/XingWentao