Sonatrach and Total have signed a shareholder agreement as part of the comprehensive partnership announced in 2017. Together they will create a joint venture known as STEP (Sonatrach Total Enterprise Polymères).

STEP will be carrying out a common project in Arzew, western Algeria. The project combines a propane dehydrogenation unit and a polypropylene production unit with an output capacity of 550,000 metric tons per year.

The two partners (Sonatrach 51%, Total 49%) are preparing to begin the front-end engineering and design (FEED) in November. The project will enable valorizing the propane, produced in large quantities locally. It will be transformed into polypropylene, a plastic the demand for which strongly goes up.

“Today’s agreements mark a new milestone in the development of the strategic partnership between Sonatrach and Total to continue developing the country’s gas reserves by providing the best of our technological expertise,” said Patrick Pouyanné, Chairman and CEO of Total.

The partners previously said they were conducting engineering studies linked to a joint petrochemicals project.