French oil giant Total SA announced May 11 that it signed an agreement with Sonatrach to launch engineering studies for a petrochemical project in Arzew in western Algeria.

Representing an investment of about $1.4 billion by the two partners, with Sonatrach holding 51% interest and Total owning a 49% stake, the project includes a propane dehydrogenation unit and a polypropylene production unit with an output capacity of 550,000 tons per year. The facility will supply local and Mediterranean demand, and Total will be responsible for the commercialization of the rest of the production in Europe.

Total and Sonatrach plan to start front-end engineering and design for the project in the following months.

Total Chairman and CEO Patrick Pouyanné said the project represents the company's petrochemical growth strategy and complements other projects announced recently in the U.S., the Middle East and Asia.