$3.7B Refinery Contract Goes to Samsung and TR

$3.7B Refinery Contract Goes to Samsung and TR
Sonatrach has awarded an EPC&PM contract for a grassroots refinery to a joint venture of Samsung Engineering and Tecnicas Reunidas. PHOTO SOURCE: Samsung Engineering

Algerian national oil company Sonatrach has awarded a $3.7 billion engineering, procurement, construction and project management (EPC&PM) contract for a new refinery to a joint venture of Samsung Engineering and Tecnicas Reunidas (TR), Samsung reported last week.

Under the lump-sum turnkey contract, Samsung and TR will provide EPC&PM services for Sonatrach’s grassroots Hassi Messaoud (HMD) refinery project approximately 373 miles (600 kilometers) southeast of Algeria’s capital city Algiers. The facility will be capable of processing 110,000 barrels of crude oil per day, Samsung noted In a written statement emailed to Rigzone.

According to Samsung, the scope of work over the approximately 52-month contract will include:

  • Process and utility unit
  • Crude distillation unit / vacuum distillation unit
  • Continuous catalytic reforming unit
  • Isomerization
  • Naphtha hydro-treating unit
  • Hydrodesulfurization unit
  • Hydrocracker unit
  • Utility systems.

“Samsung Engineering is honored to be trusted again by Sonatrach as contractor,” commented Samsung Engineering President and CEO Sungan Choi. “Our expertise in refinery projects and know-how of the region will secure a state-of-the-art refinery for Algeria.”

In a separate written statement, Sonatrach reported that the deep-conversion refinery will meet medium- and long-term internal demand and generate export volumes. The state firm added that the facility will produce the following products under European “Euro V” specifications:

  • Propane
  • Butane
  • 95 gasoline
  • 91 gasoline
  • Kerosene
  • Diesel
  • Bitumen

Sonatrach Chairman and CEO Kamel Eddine Chikhi remarked that the HMD project will help his company to meet domestic market needs and contribute to Algeria’s economic and social development.

Sonatrach stated that it expects to receive the refinery in March 2024, with final acceptance in March 2026 following a two-year warranty period.

To contact the author, email mveazey@rigzone.com.


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Barry Timmerman  |  January 21, 2020
Good to hear Algeria is getting into this lucrative and economically vital business.Oil that is....Alberta where I live has been sold out by the Canadian government which has not fought against the foreign interests (America and Saudi Arabia) which have crushed Canada's Oil industry. We need a big refinery in western canada to refine our oil and sell to whoever will buy it.
Josephine Treurniet  |  January 17, 2020
Samsung could be looking at price increases for material purchased from suppliers.The bid proposal may have cost provisions for which Samsung will not be able to request extra order payment requests
Aissaoui Belkacem Belkacem  |  January 14, 2020
3.7 billion dollars for a refinery of 90,000 bbls / day? there is surely an over-billing as usual. There is nothing to be proud of for a refinery of very small capacity and whose work has not yet started. There is nothing to be proud of since the duration of its construction (in theory) will be realized in 53 months. (it will be productive around the year 2030) if all goes well.