SNC-Lavalin wins contract to expand oil-rich Algerian city

SNC-Lavalin Group has won a contract to design and oversee a major expansion of the Algerian petroleum city of Hassi Messaoud, spokeswoman Gillian MacCormack said Thursday.

The deal has not yet been signed, she said, but the Algerian online daily Tout sur l'Algérie (www.tsa-algerie.com ), citing unidentified sources, said the Montreal-based company had won an eight-year contract with a bid valued at about $508 million.

The expansion of the city, once an oasis in the Algerian desert, is expected to cost about $9.3 billion. The future city will house 80,000 people (about 30,000 more than today), with offices, oil company headquarters and universities, the website said.

Hassi Messaoud was a desert village with a well until 1956, when oil was discovered there. A refinery was built and oil production increased until the city was responsible for half of Algeria's oil.

It's at the centre of the largest Algerian oilfield, where there are frequent new oil and gas discoveries.

SNC beat four other companies for the job,Tout sur l'Algérie said.