Algeria’s state energy company Sonatrach has awarded a $1.087 billion engineering and construction contract for Phase 2 of its Hassi Bir Rekaiz oil and gas field development to an international consortium led by Italy’s Arkad Engineering and Construction — part of Nigerian billionaire Kola Karim’s Shoreline Natural Resources group — and Egypt’s state petroleum construction company PETROJET.
The deal, structured under an EPCCS model (engineering, procurement, construction, commissioning, and start-up), was confirmed on May 5 at a signing ceremony in Algeria attended by Egypt’s Minister of Petroleum and Mineral Resources Karim Badawi, Algeria’s Minister of Hydrocarbons Mohamed Arkab, and senior representatives from both countries’ petroleum sectors. The consortium also includes Thailand’s national upstream oil company PTTEP.
Scale of the Development
The project involves the construction of a central processing facility with a daily capacity of 31,500 barrels per day in Phase 2A, expanding to 63,000 bpd in Phase 2B. It also covers roughly 217 kilometres of pipelines, more than 100 wells, and integration with infrastructure already in place in Algeria’s Berkine Basin. Work is scheduled over 39 months, with start-up targeted for 2028.
Additional scope includes enhanced oil recovery drilling, water injection and gas lift operations, as well as worker accommodation, industrial base facilities, and long-term field logistics infrastructure.
A Strategic African Push
For Shoreline Natural Resources, the deal marks another milestone in the group’s expanding global engineering footprint following its 2024 acquisition of Milan-based Arkad. “This deal shows that, as an African infrastructure and energy group, our ambitions are global — starting with Africa,” said Kola Karim. The group has active operations in Saudi Arabia, the UAE, and entered the US market in February 2026 through acquisitions in Texas, Oklahoma, Pennsylvania, and California.
For PETROJET, the contract reinforces its profile as a leading regional engineering contractor. Badawi noted that more than half of PETROJET’s recent contracts have been secured outside Egypt, spanning Algeria, Saudi Arabia, Iraq, Libya, Jordan, the UAE, and Kuwait. The deal also coincides with near-completion of a joint Sonatrach-PETROJET study to establish a new Algerian-Egyptian company to manufacture static equipment — including pressure vessels, heat exchangers, and separators — targeting the local market and West African exports.
Trans-Saharan Gas Pipeline Link
The consortium’s engagement in Algeria’s upstream sector also intersects with the wider Trans-Saharan Gas Pipeline project linking Nigeria, Niger, and Algeria — a 4,128-kilometre corridor targeting 30 billion cubic metres of annual gas export capacity toward European markets. Approximately 60 percent of its construction has already been completed as of May 2026.
Source: prospect-intel.com | egyptoil-gas.com