• The National hydrocarbons Company, Sonatrach and its two partners British Petroleum, BP, and the Norwegian Equinor, began negotiations, described as the last turning point in negotiations before going to international arbitration with the British company, Petrofac, which also has Emirati assets, regarding the Ain Saleh gas project in the province Tamanrasset, southern Algeria.
• Sources related to the file told “Echorouk” that negotiations are currently underway between a complex formed by Sonatrach and its two partners namely the British BP and Norwegian Equinor on the one hand, and the British Petrofac company on the other hand, over a dispute over compensation.
• According to the source contacted by “Echorouk”, the negotiations are about an engineering, procurement and construction contract known for short as ECP Procurement Construction Engineering, or what is known as ready-to-operate projects, indicating that the problems are always within the framework of this type of contract.
• The British company “Petrofac” is demanding the complex consisting of Sonatrach – “BP” – Equinor “” to pay sums of money in exchange for additional costs it encountered in the Ain Saleh gas project, and it is mainly related to additional costs associated with changing designs in the project during the completion of the works.
The company itself is heading to international arbitration in the event that its negotiations with the aforementioned complex fail.
• The works of the Ain Saleh gas project ended in 2018 and it is expected to produce 9 billion cubic meters of LNG, as the British company demanded additional compensation amounting to $ 600 million, and the demands were later reduced to $ 200 million, at a time when the tripartite complex made up of “Sonatrach” -“BP” and “Equinor” is willing to pay $ 40 million in the beginning and then raise the amount to $ 120 million in compensation.
• In 2018, Sonatrach amicably ended its dispute with Italian energy firm “Saipem” regarding 4 major projects, which resulted in the Italian company paying compensation to the Algerian party amounting to $ 200 million, after it was the one asking Sonatrach to pay compensation amounting to 2.6 billion euros.
• Sonatrach also reached a few days ago an agreement with the Spanish company, “Naturgy”, to slash gas marketing prices in favor of the Spanish company, and this agreement came to replace an international arbitration that the Spanish company had hinted at months ago in light of an economic crisis that accompanied the spread worldwide of the Corona virus pandemic.