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Algeria Begins Construction of $5.4bn Illizi South Gas Project

On-site construction has officially commenced on the $5.4 billion Illizi South Gas Project in southeastern Algeria.

The massive upstream energy development marks a major milestone in expanding Algeria's hydrocarbon production and strengthening energy cooperation with Saudi Arabia.

The development is a joint venture between Algerian state-owned energy firm Sonatrach and Saudi Arabia's Midad Energy North Africa.

The total investment of about $5.4bn will be fully financed by Midad Energy, including approximately $288mn allocated to the exploration phase.

Structured under Algeria’s Hydrocarbon Law No. 19-13, the agreement spans 30 years, with a 10-year extension option. It includes a seven-year exploration phase.

The project is projected to produce a cumulative total of 125 billion cubic metres of natural gas and 204 million barrels of liquid hydrocarbons over 30 years. This will include 103 million barrels of liquefied petroleum gas and 101 million barrels of condensate.

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