• Sonatrach has launched commercial production of ethanol-blended gasoline at its Augusta refinery in Italy.

• The move aligns with the group’s energy transition strategy and EU fuel regulations.

• Augusta remains one of Sonatrach’s largest industrial assets outside Algeria.

Algeria’s state-owned energy group Sonatrach has started commercial production of a bio-component fuel at its Augusta refinery in Sicily, Italy. The development reflects the group’s commitment to sustainable fuels and its strategic shift toward energy transition in its European operations.

Algerian media reported the launch on Sunday, January 18, citing Sonatrach Raffineria Italiana, the group’s Italian subsidiary. The refinery has begun producing gasoline blended with ethanol for commercial distribution.

“Sonatrach Raffineria Italiana has reached a major milestone with the start of production of gasoline containing ethanol (E5), with the first tanker truck shipped on January 14 from its Augusta terminal,” the company said in a statement published on its LinkedIn page.

Sonatrach Raffineria Italiana said the introduction of ethanol blending “forms part of the strategy to increase” the share of bio-components in automotive fuels produced at the site. The subsidiary added that the industrial shift “contributes to the company’s energy transition process.”

Augusta refinery, a key Sonatrach asset in Europe

Sonatrach acquired the Augusta refinery in 2018 from Esso Italiana, a subsidiary of U.S. oil major ExxonMobil. At the time of the transaction, the Algerian group said the facility had a crude processing capacity of about 10 million tonnes per year, which positioned it as one of Sonatrach’s largest industrial assets outside Algeria.

The acquisition sparked controversy in Algeria, particularly over the purchase price of $720 million and the condition of the equipment, according to Algerian media reports. Critics questioned refurbishment costs and the expected profitability of the overseas investment. In September 2022, authorities arrested three Sonatrach executives following an investigation.

In the years following the takeover, Sonatrach said it had carried out maintenance and modernization operations at the refinery. In its 2023 annual report, the group said it continued to invest in improving the operational reliability of its international assets, without providing specific details on the Augusta site.

The development comes amid a European regulatory framework that already governs changes in road fuel composition. The European Union requires the gradual incorporation of biofuels into transport fuels under its energy and climate policies. E5 fuels, which contain up to 5% ethanol, are already marketed in several European countries.

This article was initially published in French by Abdel-Latif Boureima

Adapted in English by Ange Jason Quenum