A Chinese company has won a contract to prepare a feasibility study for a petrochemical project in Algeria, the local press reported on Wednesday.

China National Chemical Engineering & Construction Corporation Seven (CC7) will conduct the study for the project under an agreement signed with Algeria’s state-owned Sonatrach Company on Tuesday, Elkhabar and other papers said.

The paper said the agreement is related to the “development of feasibility studies for a petrochemical steam cracking complex.”

“The project will use a new substance to produce all kinds of polyethylene in addition to other products, especially propylene and butadiene,” the report added, quoting a Sonatrach statement.

The statement said the study would also cover “an evaluation of the required investments” adding that the project would be funded through Algerian  and foreign bank loans.

The mixed-feed for the cracker would be composed of naphtha from the Skikda refinery and ethane from the GL1K complex, Sonatrach had said in a French language press statement.

(Writing by Nadim Kawach; Editing by Anoop Menon)