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Sonatrach's $500 Million Arzew Plant Nears Start-Up, Promising an End to Fuel-Additive Imports

11 November 2026 · Algeria Now

Sonatrach, Algeria's state energy group, has completed construction of a 200,000-tonne-a-year plant at Arzew that will produce a petrol additive the country now buys abroad, and says production should begin within three to four months. A senior company official told an energy roundtable on 31 October that construction and mechanical completion are finished, that the unit is in pre-commissioning, and that feedstock injection would start the following month.

A plant long in the making

The facility will make methyl tert-butyl ether, known as MTBE, an additive blended into unleaded petrol to raise its octane rating. It is being built on 11.4 hectares by a Chinese consortium, CNTIC and LPEC, under a contract worth 76 billion dinars, about $500 million, awarded in May 2022. The contract ran for 36 months, and the plant was originally due in service in 2025. If production starts on the company's new timetable, the delay will have been close to two years.

Sonatrach says it imports about 100,000 tonnes of MTBE a year, and prices reached $1,800 a tonne this year. At that level, the imports would cost roughly $180 million annually. The new unit would cover this domestic demand in full, with the other half of its output available for export. For a country that sells crude and gas yet buys finished fuel components, it is a modest but concrete step towards keeping more of the value chain at home.

The project belongs to a strategy to turn hydrocarbons into higher-value products rather than selling them raw. A methanol venture with an initial capacity of one million tonnes a year has been agreed, and an ethylene complex of 850,000 tonnes and a plant making raw material for biodegradable detergents are planned at Skikda for the end of 2027. Public authorities see such projects as a way to cut import bills and widen non-oil exports, which reached $5.16 billion in 2025 according to the trade minister.

The timing matters for public finances. The 2027 finance bill, which the National People's Assembly votes on 16 November, assumes a reference oil price of $60 a barrel and a heavy spending programme. Each import replaced by domestic output eases pressure on foreign-exchange reserves, which the International Monetary Fund projects will fall from $68.9 billion to $51 billion by 2031.

What comes next

The first test is the start of feedstock injection and the stability of early production. Sonatrach has not announced an inauguration date, and it will have to prove that the plant can run reliably and meet export specifications before the new MTBE reaches foreign buyers.

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Sonatrach's $500 Million Arzew Plant Nears Start-Up, Promising an End to Fuel-Additive Imports

A plant long in the making

What comes next

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