Sonatrach’s plan to turn more of its hydrocarbons into industrial products has reached two milestones. The Arzew MTBE plant is close to real import substitution, while the Skikda polyethylene complex is still at the tender stage and years from production. This is based on TSA Algérie’s reports of statements by Safia Ourari Drissi, Sonatrach’s Director of Planning, Studies and Performance, at Club Energy roundtables in late October 2026.
Arzew MTBE: from importer to exporter in 2027
According to the reports, construction of the 200,000-tonne-a-year plant is complete and it is in pre-commissioning. Feedstock injection is due in December 2026, with the first Algerian MTBE expected in the first quarter of 2027. MTBE is a gasoline additive used to raise octane and improve combustion, and Algeria currently imports about 100,000 tonnes a year for its refineries.
The project is not new. The 2022 contract with CNTIC/LPEC was worth 76 billion dinars (about $500 million), financed 70% by BNA and 30% by Sonatrach, with production originally due in June 2025, so start-up is running well over a year late. The savings are also sizeable: Sonatrach put 2021 MTBE imports at over $170 million. radioalgerieradioalgerie
Our estimate: at the reported 2026 price range of $1,133-1,768 per tonne, 100,000 tonnes of avoided imports is worth roughly $113-177 million a year, and a similar exported surplus would bring in roughly the same amount. These are gross figures. They do not deduct feedstock costs (methanol and butane), and they assume prices stay at the elevated levels seen in 2026.
Skikda polyethylene: self-funded, but still at the tender stage
Sonatrach has decided to finance the Skikda steam-cracking complex from its own resources after earlier joint-venture attempts stalled. The reported feedstock is naphtha from the Skikda refinery and ethane from the GL1K LNG complex, with polyethylene, propylene and butadiene as products. Three international groups were reportedly shortlisted after bids opened in late October, and an evaluation committee has 50 days to decide. Sonatrach has not published a capacity or CAPEX figure, and other reports say capacities and budget will only be fixed by the FEED studies. maghrebemergent
Our estimate: for illustration only, a world-scale cracker producing 500,000-1,000,000 tonnes of polyethylene a year, at $1,068-1,350 per tonne, would replace roughly $0.5-1.35 billion of resin imports annually. The capacity is an assumption, not an announced figure. Comparable Algerian projects, such as the Skikda LAB plant (a $1.1 billion contract awarded in March 2024), suggest a complex of this size would cost several billion dollars, but Sonatrach has not confirmed a number. tsa-algerie
At a glance
| Arzew MTBE | Skikda polyethylene | |
|---|---|---|
| Status | Pre-commissioning; start-up Q1 2027 | Tender stage; award expected 2027 |
| Cost | About $500M (76bn DZD) | Not disclosed |
| Annual impact (our estimate) | About $113-177M in avoided imports, plus a similar export surplus | Roughly $0.5-1.35B in import substitution, if built at 0.5-1 Mt/yr |
Sources: TSA Algérie reports on Sonatrach’s petrochemical projects (October-November 2026) ; Radio Algérie, 20 May 2022 (MTBE contract); TSA Algérie (MTBE financing and 2021 imports); Maghreb Emergent (Skikda ethylene complex and FEED studies). Price figures as quoted by Sonatrach and international market data . Estimates are the author’s and are labelled as such. Not investment advice.
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