Algerian state-owned company Sonatrach has signed a contract with Sinopec Guangzhou Engineering for the construction of a heavy naphtha hydrotreatment unit at its refinery in Arzew, in the northwest of the country. The investment amounts to DZD57bn ($437mn) under an engineering, procurement, construction and commissioning (EPCC) turnkey contract.
Gasoline production capacity to more than double
The new unit will be built on a five-hectare site within the Arzew refining complex. It will have an annual processing capacity of 738,000 tonnes of heavy naphtha, raising the refinery’s gasoline output from 550,000 to 1.2 million tonnes per year. Construction is expected to take thirty months from the contract’s effective date.
Heavy naphtha, a by-product of crude oil distillation, will undergo hydrotreatment using hydrogen to remove impurities such as sulphur and nitrogen. The treated product will then be sent to the catalytic reforming unit for conversion into high-octane gasoline.
Strategic industrial expansion for Sonatrach
According to Sonatrach Chief Executive Officer Noureddine Daoudi, the project is part of the company’s development plan aimed at strengthening its industrial capabilities in the refining segment. Sonatrach currently operates five crude oil refineries with a combined processing capacity of 27 million tonnes per year, along with a condensate processing unit capable of handling an additional 5 million tonnes.
Since 2020, these facilities have met Algeria’s domestic fuel demand. A portion of refined products, including naphtha, fuel oil, base oils and aromatic compounds, is exported to other markets.
Sinopec expands its industrial footprint beyond Asia
Chinese firm Sinopec Guangzhou Engineering, a subsidiary of China Petroleum & Chemical Corporation (Sinopec Group), specialises in the design and execution of major industrial projects in the hydrocarbon sector. The company will handle the full design and construction scope of the new unit in Arzew, with no announced local subcontracting or joint venture.
The agreement marks a further step in Sonatrach’s industrial development strategy to enhance the value of its refinery outputs while improving energy autonomy. It also reflects the continued expansion of Chinese engineering companies in North Africa’s petroleum infrastructure sector.
