ITOCHU Corporation, together with Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI), has been awarded a contract by SONATRACH, the state-run Algerian hydrocarbon corporation, for construction to expand its plant for production of liquefied petroleum gas (LPG). Worth about 130 billion yen, the contract is of the full turn-key engineering, procurement, and construction (EPC) type, for work including design, procurement, transportation, civil engineering, machinery installation, and trial operation. The construction is slated for completion in August 2010.

The subjects of the construction are a new refining plant and storage facilities for LPG. The plant is to produce 3 million tons of LPG per year through a process of separation and liquefaction. GP1Z, the existing SONATRACH LPG plant, is the world's largest, and is located in the Arzew industrial zone in western Algeria. Its annual production capacity came to 4 million tons in 1984, the year of its completion, and was increased by 2 million tons in 1998. With the completion of this expansion, the capacity will reach 9 million tons, making the LPG plant even huger.
In Algeria, development of gas fields is currently moving ahead at fast pace. There are high hopes for early completion of the separation and refining plant as needed for expanded LPG production and shipment.

ITOCHU and IHI have handled all of the previous construction, i.e., the first-phase construction of the new plant completed in 1984 and the second-phase expansion completed in 1998. The smooth operation of the plant for more than 20 years lay behind their selection for the latest contract.
The expansion constitutes a large-scale project whose subjects include separation and liquefaction trains (three, each with an annual production capacity of 1 million tons), spherical tanks for feedstock storage (six, each holding 1,000 cubic meters), tanks for the product propane and butane (two, each holding 70,000 cubic meters), and various other incidental facilities.

ITOCHU and IHI have a long record of construction in Algeria even in previous years. Their recent activities may be exemplified by the construction of the country's first sea waterdesalination and power generation plant, which was completed last year. At present, they are in the process of building four boilers for an LNG plants based on a contract awarded in August 2005 and rehabilitating an existing LPG plant (GP2Z) based on another awarded in April 2006.

ITOCHU and IHI intend to continue with their aggressive sales activities in Algeria and thereby help to solidify that country's economic foundation.

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