EGYPT - Begins $10 Bn Programme To Produce 15M T/Y Of 20 Petrochemicals.

The state-owned Egyptian General Petroleum Corp. (EGPC) has just launched a $10 bn programme to have 15m t/y of new petrochemicals production capacity within 20 years which would generate about $7 bn per annum in revenue. This will cover local needs, now met by imports, and would allow exports worth $3 bn a year. The plan is to create 100,000 jobs. Petrochemical exports are to begin by 2005.

Prepared by EGPC with the assistance of Chem Systems of the UK, the programme was approved by the government in late September 2000. There will be 24 major complexes to make 20 different petrochemical products needed by the domestic market. The plants will be using natural gas and gas liquids as feedstocks, with Egypt now having up to 120 TCF of proven and probable reserves discovered over the past 15 years. Most of the gas reserves have been found since 1996.

The first petrochemical complex is to be built in the Mediterranean coastal city of Damietta, where an industrial free zone offers good incentives. Its gas feedstocks will come from deep water offshore fields found in the past two years. Other complexes are to be built in Alexandria and Suez, with each having a rapidly-expanding industrial free zone which offers equally good incentives.

Egypt's petrochemicals industry began in the early 1980s, when a polyvinyl chlorine (PVC) plant and an aromatics plant were built in Alexandria. There was no major progress until the mid-1990s, when EGPC decided to have a complex built at Ameriya, in Alexandria, to produce ethylene and polyethylene using natural gas from the Western Desert which went on stream this year.

The biggest venture now under construction is a complex in Alexandria to produce ethylene and polyethylene. This is a venture of Sidi Kerir Petrochemical Co. (Sidpec), owned by EGPC, banks, insurance companies and private investors. The ethylene plant contractor is Toyo Engineering Corp. Samsung Engineering Corp. of South Korea is building the polyethylene plant. The private Orient Petrochemical Co. (OPC), headed by rapidly expanding industrialist Mohammed Farid Khamis, is having a 120,000 t/y polypropylene complex built in the new Suez industrial free zone by Toyo Engineering. The venture, nearing completion, will be able to produce 160,000 t/y, with the feedstock to be imported until OPC's own 350,000 t/y propane dehydrogenation (PDH) plant at the complex is completed in late 2001 or early 2002. The PDH plant will be taking propane feedstock from both the Egyptian Gas Co. (Gasco) and a new NGL plant being built on the Gulf of Suez by GUPCO (the oil and gas producing JV of EGPC & BP). Khamis' Orient Polyester, an affiliate of his huge carpet making Oriental Weavers Group, is also to have a plant built in the Suez industrial zone to produce polyester. Another polyester plant is to be built in Alexandria for the Saudi Egyptian Petrochemical Co. The partners are to be EGPC (10%), the Saudi Jihan Group and Alamoudi Group, and private Egyptian interests.

The polypropylene train of Orient Petrochemical Co. (OPC) is scheduled to be on stream by end-January 2001. OPC intends to build a second train in the same Suez industrial free zone. Like the first train, this will be licensed by Union Carbide Corp. of the US and have a nameplace capacity of 120,000 t/y but will be able to produce 160,000 b/d.

Construction of OPC's 350,000 t/y propane dehydrogenation (PDH) plant at the Suez industrial zone, which is to provide the feedstock to the polypropylene complex, will begin in the first quarter of 2001. The main contracts for this are to be awarded before end-2000.

Project in the government's $10 bn programme will include olefins and polyolefins complexes, as well as plants to produce aromatics and methanol. There will be plans to produce polyolefins out of methanol as well, including polypropylenes and polyethylenes.

Ras Shukair NGL Project Is Progressing: Meanwhile, work on the NGL plant at Ras Shukair on the Gulf of Suez - which will feed OPC's first polypropylene train - has progressed rapidly and it should be on stream by end-2001. Until then, OPC's train is to receive propane feedstock exclusively from Gasco (see DT).

To be owned and run by GUPCO, a 50-50 oil and gas producing venture between EGPC and BP, the plant will process 280 MCF/day of associated gas to produce 1.1m tons of LPG, 14m tons of condensates and 3.9m tons of propane over 15 years. The plant will cost almost $140m. (See survey of Egypt in Vol. 54, Jan-June 2000, Nos. 1-4).