Project Profile
Value: US$3,000 million
Location: City of Arzew, 400km (249 miles) west of Algiers
Start-up Year: 2014
Capacity 4.5 million tonnes
The Arzew LNG train or GL3-Z project is under construction in Algeria near the city of Arzew and situated about 400km (249 miles) west of Algiers. It launched in June 2014 with 4.5 million tonne capacity, helping support a 36% rise in Algerian gas output to 60 bcm. Arzew is capable of loading the Q-Flex LNG carrier with a capacity of up to 215,000 cubic metres.
The country has proven natural gas reserves of 4.5 trillion cubic metres, which amounts to about 2.6% of the world total, and is the world\'s fourth-largest gas producer, supplying 25% of the EU\'s natural gas imports. In July 2008 Sonatrach awarded a new contract for a new LNG liquefaction train. The onshore contract is worth US$3 bn and will involve the construction of a new LNG liquefaction train on a brownfield site in the industrial zone of Arzew adjacent to the existing refinery. The work was awarded to a joint venture of Saipem / Snamprogetti and Chiyoda on a turn-key basis. The contract will involve the engineering, procurement and construction for a 4.7-million-ton-a-year liquefaction train and associated infrastructure. This is the first time that Saipem has been the main contractor for a large LNG project. The construction work begun in 2010 and is scheduled to be completed in 2012.
Sonatrach already has an oil refinery at Arzew, which carries out topping and reforming, and has a capacity of 60,000bpd. Opened in 1973, the refinery processes crude piped to it along the Haoud El Hamra / Arzew pipeline. Half of the output is for domestic consumption and half for export. Alongside the refinery are two gas liquefaction plants – the GL1-Z and GL2-Z – which have recently undergone refurbishment of equipment and de-bottlenecking by Bechtel and IHI and Itochu of Japan. The contract to build the third LNG train at Arzew had previously been provisionally awarded to Petrofac (UK) and IKPT (Indonesia) as the lowest bidders. Sonatrach was not happy that the group could provide sufficient guarantees about the capacity and overall cost of the project and consequently they were disqualified. Technip of France also submitted a bid for the project, proposing a 4.88 million tons a year plant at a cost of US$5.92bn (this was rejected as too expensive).
After Snamprogetti Chiyoda s.a.s. di Saipem S.p.A won the main contract, they awarded to Cape in 2010 a contract for the provision of the total insulation works for the Sonatrach GL3-Z LNG Project. Based on the results of a review in February 2012, and as indicated in the Company\'s 2011 results announcement in March 2012, the timing of the work releases on the Arzew Project had been slower than expected with revenues in 2011 less than one-third of planned levels. With the mechanical completion date being unchanged, it was also explained that it had been necessary to significantly increase the manpower on the project
In April 2016, Linde Gas Algeria announced plans to build a new air gas unit at the Arzew complex. The EUR30 million project will launch in 2019 and meet the requirements of the domestic market. It will produce 400 tonnes per day, most of which will be nitrogen for use in local industries in the Arzew industrial zone.
Operator:
Sonatrach: Operator with 100% interest
Contractor:
Joint venture for EPC
Saipem
Snamprogetti
Chiyoda
Cape: Provision of the total insulation works