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China-Africa Trade Information Service
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China-Africa Trade Information Service
Image: Reuters
After discovering a series of natural gas over the past five years, international companies are seizing investment opportunities in Egypt's petrochemical sector.
There have been record levels of gas production in Egypt with about 7.2 billion cubic feet a day, helping the country reach self-sufficiency for natural gas, a key base material for the petrochemical and fertiliser industries for which global demand is constantly growing.
An agreement was recently reached between the Egyptian Ministry of Petroleum and Mineral Resources and the US company Bechtel for the construction of a refining and petrochemical complex in the Suez Canal economic zone with an estimated investment of $6.7 billion.
Chevron, another American company, signed a cooperation agreement with the Egyptian General Petroleum Corporation covering cooperation in petrochemicals, including refining, transportation and distribution of petroleum products and crude oil.
Chevron is also to work with Alexandria Mineral Oils Company in ports and terminal management, operating refinery operations efficiency and supplying marine vessels with fuel to take advantage of Egypt's location on the Mediterranean.
An alliance of investors from Saudi Arabia, the United Arab Emirates and Kuwait announced four projects with investments totalling approximately $6.8 billion. The alliance includes the Egyptian-Kuwaiti Holding Company, Saudi International Petrochemical Company, Bawabet Al-Kuwait Holding Company and Boubyan Petrochemical Company, also from Kuwait.
Egyptian Minister of Petroleum and Mineral Resources Tarek al-Molla said, "We aim during the coming period to maximise the added value of the natural oil resources according to a strategy aimed at settling the petrochemical industry in Egypt."
He explained how that strategy led to three industrial projects with investments totalling $4 billion in the Mopco Complex for Fertilisers and the Ethydco Complex in Alexandria for the production of ethylene and its derivatives, a main material for the plastics industry.
Ethydco's investments include a project producing synthetic rubber with an investment of $105 million that will supply raw materials to 13 industries, including tyre and conveyor belt manufacturers and construction.
During the recent Egypt Petroleum Conference, an agreement was signed with the British BSW Group to establish a refining and petrochemical complex in El Alamein on the Mediterranean coast.
The project aims to maximise the added value of crude oil produced in Western Desert fields to produce specialised petrochemical products at a capacity of about 1.5 million tonnes annually.
The project requires about $8.5 billion in investments and will be producing products used as raw materials in many small and medium-sized industries, such as textiles, automobile parts and accessories, printing materials and paints.
This complex is expected to boost production from its 1 million-tonne annual level of petroleum products, such as diesel fuel and kerosene, to meet needs of the local market and export surpluses.
Molla said four new industrial petrochemical projects were being established with investments amounting to about $1.5 billion. The projects include production of methanol derivatives at the Damietta Port of the Suez Petroleum Services Company, with investments of approximately $60 million to provide raw materials for the fertiliser, ready-mix and adhesives industries.
The Sidi Kerir Petrochemicals Complex expansion project in Alexandria includes two new factories producing propylene and polypropylene with investments worth $1.2 billion, in addition to a project to produce Medium Density Fibreboard wood panels.
Cairo has implemented more than 30 projects the past five years in the developing natural gas industry, with investments amounting to $21.4 billion. Egypt's ambitions are increasing with hoped-for discoveries of gas in its territorial waters in the Red Sea after completing border demarcation agreements with Saudi Arabia.
Cairo has dedicated a huge zone for the petrochemical industry in the economic zone along the Suez Canal to attract foreign investment. Companies can easily re-export products in addition to taking advantage of Egyptian trade agreements with various international blocs.
International companies can re-export products to all African markets with full customs exemptions, in addition to proximity to the expected gas discoveries in the Red Sea region, as well as to the giant Zohr gas field near the Suez Canal in Port Said governorate.
