Sonatrach Secures Investment for Italian Refining Complex

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Algerian state-owned oil company Sonatrach has received a $250 million loan to continue maintenance and improvements at its Sonatrach Raffineria Italiana refining complex in Sicily, Italy.

The loan was made by The Arab Petroleum Investments Corporation (APICORP), with $100 million to go to refinery improvements and another $150 million letter of credit for the purchase of Saudi Aramco crude by Sonatrach Raffineria Italiana. The refinery in Augusta, Sicily, was purchased from Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) in 2018 and is Sonatrach's first overseas acquisition. Industrial Info is tracking six projects at the refinery, including an $11 million project to modernise the tanks over the next couple of years.

The integrated refinery complex, which has access to the major global shipping routes through the Mediterranean Sea, boasts a conversion rate of 200,000 barrels per day (BBL/d) and produces a wide range of downstream products, including gasoline, distillates, fuel oils, lubricants, asphalts and chemicals.

"Our strategic investment in international refining through Sonatrach Raffinera Italiana will contribute to meeting local energy demand and address imbalances in petroleum supplies," said Nordine Bouteldja, managing director of Sonatrach Petroleum Investment Corporation. "This is of key importance to our efforts to diversify our energy assets and secure reliable supplies of crude oil, as part of our drive to meet local energy demand and address imbalances in petroleum supplies to the domestic market."

Ahmed Ali Attiga, chief executive of APICORP, added: "APICORP is committed to supporting and financing Sonatrach in its first overseas acquisition. This is part of our mission to continue playing an active role in the development of our member countries' broader energy sector and contribute to diversification and geographic expansion."

In an earlier interview, Rosario Pistorio, Sonatrach's chief executive officer, explained the rationale for purchasing the refinery: "Our types of crude come from all over the world: the Middle East, North Africa, Azerbaijan, Canada, also West Africa, and with the purchase of the refinery by Sonatrach, the Algerian crude has become the one of choice, as well as semi-finished products have become so, with a view to full integration of the upstream with the downstream of the Sonatrach group, which in addition to the Augusta refinery also boasts the Skikda complex and four other refineries. Algeria's acquisition of the refinery was strategic to fill the internal needs of finished products, such as diesel and petrol. Algeria currently produces around 1 million barrels of per day of crude oil, and its refining capacity is around 500,000 BBL/d. There is therefore in the country a surplus of crude oil and a deficit of finished products. The acquisition of Augusta will help Algeria to rebalance the situation."

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