Four companies have prequalified to bid for contracts to provide design and project management services for two major downstream oil projects in Algeria.

The projects relate to a planned unit to produce Group II and Group III base oils at the Arzew refinery, and a separate project to develop a petrochemical complex for ethylene production in the Skikda industrial zone.

The contracts cover the provision of front-end engineering and design (feed), acquisition of process licences and project management consultancy (PMC) services.

The four companies that have prequalified to submit bids for the feed, licencing and PMC tenders are:

• China HuanQiu Contracting & Engineering Company [HQC] (China)
• Engineering for the Petroleum and Process Industries [Enppi] (Egypt)
• Tecnicas Reunidas (Spain)
• Wood Group (UAE/UK)

The prequalification process for the two projects started in August 2025. The process was delayed, and the deadline for submitting prequalification documents was extended beyond the original date.

Group II and Group III base oils are highly refined petroleum products used to manufacture engine oils, industrial lubricants and other specialist lubricants.

Ethylene is one of the world’s most important petrochemical feedstocks and around half of global ethylene production is used to manufacture polyethylene, the world’s most widely produced plastic.

Algeria is pursuing a major expansion of its refining, petrochemical, and downstream oil and gas industries, aiming to process more of its hydrocarbons domestically rather than export them as crude oil, natural gas or relatively low-value intermediate products.

It is central to Sonatrach’s development strategy, and several large projects are already under construction or in procurement.

In June last year, Algeria’s Energy Minister, Mohamed Arkab, announced a $7bn petrochemical investment programme for 2025-29, intended to increase the share of oil and gas transformed into higher-value products in the North African country.

Arkab said his ministry aimed to increase the rate of transforming hydrocarbons into higher-value products from 32% to 50% over the five-year period.