Runner up leads: Algeria turns to LNG runner up for Arzew development
Petrofac-IKPT duo lose Algeria LNG deal
Algeria has decided not to award a planned contract to build an LNG plant to British and Indonesian duo Petrofac and IKPT, and will instead discuss the project with a Japanese-Italian group, an official statement said.
State energy group Sonatrach provisionally awarded a contract to Petrofac and IKPT on 12 July to construct an LNG train in the western Mediterranean port of Arzew with a production capacity of 4.3 million tonnes a year, wrote Reuters.
Sonatrach at the time gave the two companies 10 days to provide guarantees that they could build the train in 50 months within the price they had offered of 55,000 dinars ($895) a tonne, or the deal will be awarded to the runner-up, a consortium of Italy's Snamprogetti and Japanese Chiyoda.
But the documents submitted by Petrofac and IKPT on 20 July "are not sufficient and do not meet the requirements of Sonatrach, guaranteeing the production capacity of 4.3 million tonnes of LNG per year, measured in ships," Sonatrach said in a statement posted on its website.
"Sonatrach made the decision not to retain the consortium Petrofac/IKPT for the construction of an LNG train (LNG3.Z) in Arzew," the statement added.
"Sonatrach will start discussions with the consortium ranked in second position, namely Snam-Projetti/Chyoda for the implementation of this project."
The project will be financed 100% by Sonatrach and the plant is due to be fed by gas from Algeria's Gassi Touil and Rhourd Nouss gas fields.