Algeria’s state-owned energy company Sonatrach has awarded Chinese engineering firm Sinopec Guangzhou Engineering a $437 million contract to build a new heavy naphtha hydrotreating unit at the Arzew refinery, a move expected to more than double the facility’s gasoline production capacity.
The agreement, structured as an Engineering, Procurement, Construction and Commissioning (EPCC) contract, covers the development of the new unit on a five-hectare site within the refinery complex in northwestern Algeria. According to Sonatrach, the project is scheduled to be completed within 30 months.
Once operational, the unit will process approximately 738,000 tonnes of heavy naphtha annually. The treated naphtha will then feed into the refinery’s catalytic reforming systems to produce higher-grade gasoline. This upgrade will lift the refinery’s gasoline output from the current 550,000 tonnes per year to about 1.2 million tonnes annually.
Sonatrach stated that the investment forms part of its broader strategy to modernize and expand Algeria’s refining network to meet rising domestic fuel demand and reduce reliance on imported petroleum products. The country currently operates five crude oil refineries with a combined capacity of 27 million tonnes per year, along with a 5-million-tonne condensate processing unit.
The new hydrotreating unit is also expected to support Algeria’s ambitions to strengthen its downstream value chain, enhance the quality of refined products, and create room for potential future exports of gasoline, base oils, and petrochemical derivatives.
The partnership with Sinopec adds to the growing list of Chinese engineering engagements in Algeria’s energy sector, underscoring the country’s push to accelerate refinery upgrades and diversify its industrial partners.
