Algeria launches $2.3 billion gas expansion project

Sonatrach, Algeria's state-owned energy company, has launched a $2.3 billion project to upgrade its Hassi R'Mel gas field, the country's largest and a critical hub for pipelines supplying gas to southern Europe, according to multiple energy news outlets.

Sonatrach said the initiative aims to counter natural gas depletion and maintain production at 188 million cubic meters per day, ensuring steady energy supplies to Europe, reports Upstream Online.

Algeria’s economy heavily depends on its hydrocarbon industry. The World Bank estimates that between 2019 and 2023, this sector contributed 14% of Algeria's GDP, accounted for 86% of exports, and made up 47% of government revenues.

The project includes constructing three new compression stations equipped with 20 turbo-compressors. The first station is expected to be operational by October 2026, with the remaining two set to follow in 2027.

The engineering, procurement, and construction contract for the upgrade was awarded in May 2024 to a consortium comprising Baker Hughes and Tecnimont, supported by Nuovo Pignone.