EGYPT - Petrochemical Sector.

The petrochemical sector in Egypt has grown rapidly. Further expansions are underway, with new ventures involving both the private sector and the state-owned Egyptian General Petroleum Corporation (EGPC). The availability of sufficient and cheap gas as feedstock has been an important factor behind the expansions.

Egypt's petrochemical facilities are concentrated at Ameriya, in the Alexandria region. Plenty of gas feedstocks are now available at Ameriya, piped mainly from the Western Desert gas fields (see Gas Market Trends, No. 2). New petrochemical ventures are under construction in the Suez area where free zone facilities being established provide tax breaks and many other incentives.

The petrochemical sector in Egypt was developed late, relative to the country's extensive capabilities in other industries. The first step towards establishing a petrochemical industry was taken in 1979, with an agreement between EGPC and Montedison of Italy to build a complex at Ameriya, 30 km from Alexandria. Montedison later pulled out of the venture. In 1982 EGPC decided to go ahead with the project on its own. Egyptian Petrochemical Company, a fully-owned subsidiary of EGPC, was formed in the same year to undertake the Ameriya project.

The local industrial base includes a significant capacity to produce fertilisers. Projects worth over $2 billion are under construction or are being planned for this business, involving private investors from Egypt, Saudi Arabia and Kuwait (see following).