French energy giant Total SA has signed an agreement with Algeria-based Sonatrach to launch the engineering studies for a petrochemical project in Arzew, Algeria.
The agreement, signed May 11, includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 metric tons per year.
The project represents an investment of around $1.4 billion and the ownership structure of with Sonatrach owning 51 percent and 49 percent owned by Total.
The project is set to start this summer, subject to approval by the relevant Algerian regulatory authorities.
The facility will convert propane, produced in large quantities locally, into polypropylene, mainly to supply local and Mediterranean demand. Total will be responsible for the commercialization of the rest of the production in Europe.
“This project in Algeria illustrates our petrochemical growth strategy, which consists of expanding our activities from competitively advantaged feedstock, especially derived from gas, to take advantage of the growing global plastics demand,” said Total CEO Patrick Pouyanné.
The project complements Total's other projects announced recently in the U.S. and the Middle East, which are primarily focused on polyethylene.
On April 10, the French company signed a $5 billion memorandum of understanding with Saudi Aramco to build a world-scale petrochemical complex in Jubail, Saudi Arabia.
The complex will be integrated downstream of the SATORP refinery, a joint venture between Saudi Aramco (62.5 percent) and Total (37.5 percent) in Jubail.
Located next to the SATORP refinery, the complex will comprise a world-size mixed-feed steam cracker with a capacity of 1.5 million tonnes per year of ethylene and related high-added-value petrochemical units.
In addition to that, in February, Total, Borealis AG, and Nova Chemicals Corp. agreed to form a joint venture in petrochemicals on the U.S. Gulf Coast.
The companies signed definitive agreements under which Total will own 50 percent of the venture and Novealis Holdings LLC, a joint venture between Borealis and Nova Chemicals, will own the remaining 50 percent.
The joint venture will include the new $1.7 billion ethane steam cracker, with a capacity of 1 million tonnes a year, which is currently being built alongside Total's Port Arthur refinery and Total/BASF's existing steam cracker.
The project, scheduled to start up in 2020, will further include Total's existing polyethylene 400 kilotonnes per year facility in Bayport, Texas, as well as a new a new 625 kilotonnes per year polyethylene unit using the Borealis Borstar technology at Total's Bayport, Texas, site.