ALGERIA - The Refineries.

Naftec's five refineries have a combined nameplate capacity of 474,500 b/d. But four of them are very old, they operate below capacity. In June 2004 Naftec launched a big investment programme to upgrade all the five plants - part of a $10 bn investment programme for the refining and petrochemicals sector. The whole network of pipelines linking the refineries to the markets and storage facilities has been upgraded under contracts awarded in early 2003.

Hassi Messaoud I & II: The first plant at Hassi Messaoud was completed in 1960 but started up in 1962, the year Algeria gained independence from the French, with a capacity of 3,400 b/d. It was built by the French company SN Repal, in which Sonatrach was to hold 49% by late 1963 - with the French state firm Erap retaining a 51% majority. Sonatrach's share rose to 50% in 1965, to 75.5% on Dec. 15, 1971, and to 100% in 1972 when the government nationalised foreign oil assets.

Plant II went on stream in 1979 and raise Hassi Messaoud's capacity to 27,000 b/d. The two plants supply a large part of southern Algeria with gasoline, gasoil and kerosine.

Algiers refinery built by a JV with foreign firms, Societe de Raffinerie d'Alger, in the capital's el-Harach district came on stream in February 1964 with a capacity of 28,000 b/d to process Hassi Messaoud crude. This was gradually increased to about 58,000 b/d by 1973. Crude from Hassi Messaoud is piped to it along the Haoud el-Hamra/Algiers pipeline.

Sonatrach progressively took control of the plant, first by nationalising the shares of Esso (17.6%) and Mobil (6%) in August 1968. It purchased 12% of Total's share in November 1968, Shell's 24% in June 1970, and finally bought Total's remaining 20% in December 1971.

The plant has the following: a 58,000 b/d crude distillation unit; a 15,000 b/d catalytic reformer; and a 15,000 b/d catalytic hydrotreater. Underground pipelines link the refinery to the various storage areas of Algiers for the supply of products to the country's central region. The system runs to the Algiers harbour and to the Houari Boumedienne International Airport. Most of the refinery's fuel oil and naphtha are usually exported. The refinery is being upgraded further.

Arzew refinery was built by a Japanese consortium made up of C. Itoh (now Itochu) and JGC. It came on stream in December 1972. It has a capacity of 60,000 b/d and processes the Saharan Blend, pumped via a 28-inch Haoud el-Hamra/Arzew pipeline, as well as 6,000 b/d of imported sour crudes. Half of the refinery's output is consumed locally and the rest is exported to Europe and the US.

The plant has the following: a 60,000 b/d crude unit; a 5,500 b/d vacuum unit; an 11,600 b/d catalytic reformer; an 11,000 b/d catalytic hydrotreater; a 145,000 t/y bitumen unit (on stream in 1984) producing asphalts; and two lubricants units producing 170,000 t/y of greases and paraffins (on stream in March 1984).

Honeywell of the US on Dec. 15, 2004 got a $60m Naftec contract to modernise the refinery's instrumentation systems with the goals of improving production and optimising operational efficiency. Honeywell then said its technology and equipment upgrades will give Naftec greater visibility into plant-wide operations and help it make business decisions quickly as well as maintain a safe and consistent operating environment.

The multi-phase project began in early 2005 and will be completed by 2009. Honeywell will install its Experion(tm) Process Knowledge System (PKS), field instrumentation systems, an advanced process control system, a training simulator and a centralised control room. These will enable the plant to upgrade existing controls and maintain normal operations and avoid the high costs of replacing equipment.

The 323,000 b/d Skikda refinery, the largest in Africa, went on stream in March 1980. Its first naphtha exports were shipped in April 1980 and full capacity was reached later in 1980. The plant can process 15m t/y of Saharan Blend, pumped through a 34-inch Haoud El Hamra/Skikda pipeline, and 300,000 t/y of sour crudes imported through the Skikda oil terminal which is linked to the plant by pipeline.

The plant, often running at more than 350,000 b/d, was built by Snamprogetti and Saipem under a contract signed on April 30, 1974. Its naphtha output consists of naphthenic grades suitable for re-formulation into gasoline. A reforming unit and an additional storage tank were completed in 1993 - built by JGC/Itochu, under a $200m contract, to turn naphtha into 1.6m t/y of gasoline. Gasoline imports were then stopped. Exports of naphtha from Skikda have had 75% paraffins, compared to about 70% before the reformer was built.

The refinery has: two 7.5m t/y crude distillation units; a 9,000 b/d vacuum unit; a 30,000 b/d catalytic reformer; a 1,900 b/d isomerisation unit; a 380,000 t/y aromatics unit producing benzene, toluene and xylenes; and a 145,000 t/y bitumen unit producing road and oxidised asphalts. Naftec wants a hydrocracker at Skikda.

Naftec has contracted turnkey installations for Saab Rosemount radar-based tank gauging systems. Skikda refinery will have 122 high precision radar gauges and Arzew will have 212 gauges to replace their existing mechanical systems. Both systems include, besides custody transfer accuracy level measurement, multi-spot temperature measurement to perform accurate net volume calculations. Advanced tank management with inventory and custody transfer reporting is provided by the Saab Rosemount TankMaster PC software. Skikda will use a fiber optic network with PCs distributed in seven control rooms. The network uses redundancy functions to maximise data availability. Both installations were commissioned in 2005.

Naftec recently began final work on tendering $450m worth of EPC contracts to upgrade and partly expand the Skikda, Arzew and Algiers refineries. The awards are expected in 2007.