September 07, 2008

Sonatrach awarded GP1Z expansion contract to Japanese firms

It is reported that energy firm Sonatrach has awarded a USD 1.1 billion contract to Itochu and Ishikawajima Harima Heavy Industries of Japan to expand the world’s largest liquefied petroleum gas complex GP1Z. Itochu and Ishikawajima Harima Heavy Industries also handled previous expansion projects at GP1Z in 1984 and 1998.

Under the agreement, the firms will build a new refining plant and storage facilities for the GP1Z complex in western Algeria. Construction is slated for completion by mid 2010. Once operational the new refinery is to produce 3 million tonnes of LPG per year, increasing GP1Z’s capacity to 9 million tonnes a year.

Algeria is currently making a big push to develop its massive reserves of natural gas in order to fund economic expansion. It has some of the largest gas reserves in the world. In July 2007 Sonatrach signed a USD 2.88 billion deal with US engineering and construction company Kellog Brown & Root for the construction of its largest liquefied natural gas plant, capable of producing 4.5 million tons of liquefied gas per year.