Oil and gas news in africa (exploration and development) – page 10 – skyscrapercity electricity video ks1

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Esso Italiana Srl, a unit of Exxon Mobil in Italy, signed an agreement for the sale of its Augusta refinery in Sicily to Algerian state energy producer Sonatrach, according to an emailed statement from Esso. It’s also selling three fuel terminals in Augusta, Palermo and Naples and related pipelines to Sonatrach.

The terminals will enable Sonatrach to ship Algerian crude to the Augusta refinery and send oil products back to Algeria after refining, Omar Maaliou, general manager of the company’s marketing department, said in an interview. Neither Maaliou nor the Esso statement gave details of the sale’s value.

Algeria, which depends heavily on oil natural and gas exports, has struggled to trim its fuel imports and narrow a budget deficit that ballooned to more than 15 percent of gross domestic product after crude prices began plunging in 2014. The North African nation’s oil production dropped to 990 million barrels a day in April from 1.27 million barrels a day in January 2012, according to data compiled by Bloomberg.

The Augusta refinery purchase marks Algeria’s first international investment in refining, Sonatrach Chief Executive Officer Abdelmoumen Ould Kaddour said in the Esso Italiana statement. Sonatrach announced a deal earlier this year with oil trader Vitol Group to ship Algerian crude to Italy to be processed and sent back as refined products, the first deal of its kind.

Sonatrach is to complete its purchase of the refinery and fuel terminals in Italy by the end of 2018, and the deal is subject to conditions and legal requirements, including consultation with trade union representatives and approval of the antitrust authority, according to the Esso statement. About 660 Esso employees at these facilities will be transferred to Sonatrach once the sale is completed.

Algeria consumes more oil than its refineries can process into products, according to Sonatrach data. The company’s fuel tenders to cover that shortfall have sometimes been among the largest in the Mediterranean products market, making them important for regional prices.

The project includes a propane dehydrogenation (PDH) unit and a polypropylene production unit with an output capacity of 550,000 tons per year. The project represents an investment of around $1.4 billion by the two partners (Sonatrach 51%, Total 49%), who are planning to start the front-end engineering and design (FEED) this summer, subject to approval by the relevant Algerian regulatory authorities. The facility will valorize propane, produced in large quantities locally, by transforming it into polypropylene, a plastic for which demand is growing strongly. It will supply in priority the local and Mediterranean demand and Total will be responsible for the commercialization of the rest of the production in Europe, where it will leverage its market expertise to the benefit of both partners.

“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. This polypropylene project complements our other projects announced recently in the United States, in the Middle-East and in Asia, which are primarily focused on polyethylene” commented Patrick Pouyanné, Chairman and Chief Executive Officer of Total. “It is also an opportunity to strengthen our cooperation with Sonatrach, by moving beyond our long-standing exploration and production relationship to invest in the downstream together.”