Sonatrach Eyes Europe Market, Signs $600 Million in LPG Deals

Sonatrach Eyes Europe Market, Signs $600 Million in LPG Deals

/ Financial News / Friday, 28 October 2022 12:24

Algeria's national petrochemicals firm, Sonatrach, signed deals worth around $600 million with Italian companies to extract and transport liquefied petroleum gas (LPG).

As Africa's biggest natural gas exporter, Algeria aims to cash in on the nearby European markets after Russia's invasion of Ukraine disrupted global energy supplies.

Sonatrach said it had reached a $400 million deal with Italian firm Tecnimont for the building of an LPG extraction plant, to be built within three years. According to the company, the plant will produce 1,000 tonnes per day of LPG, 300 tonnes per day of condensate and 8.7 million cubic meters per day of gas.

Algerian pipelines firm ENAC will also build a 65-kilometer (40-mile) conduit to link the plant to an existing transportation network in the country's east, Sonatrach said.

Separately, a consortium owned by Sonatrach and its partner has signed a $170 million deal with Italy's Arkad to build a unit linking 24 new wells to an existing plant. In addition, three smaller deals for LPG-related infrastructure and equipment have also been announced.

Natural gas prices have more than doubled in Europe since Russia's February invasion of Ukraine, as Russia has cut back supplies in suspected retaliation against Western sanctions.

Algeria has signed a flurry of deals with southern European governments and energy firms that are seeking to offset the fallout. But experts are unsure about its ability to boost production in the short term.

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