EGYPT - The Oil Refining Sector.

The oil refining sector in Egypt looks set for big expansion, with at least two new projects being promoted. One is a 500,000 b/d grassroots refinery to be built near the Suez Canal, an outlet used by tankers carrying crude oil from the Persian Gulf to Europe. The second is a 130,000 b/d grassroots refinery to be built at Ain Sukhna, on the Red Sea coast which is the terminal for tankers offloading crude oil pumped by pipeline to Sidi Kerir, on the Mediterranean coast near Alexandria.

Egypt now has nine oil refineries with a total capacity of 714,000 b/d. This sector is the biggest on the African continent. The government has spent over $3.5 bn since 1982 to upgrade the plants in order to raise and improve their product range.

The 500,000 b/d refinery project was disclosed on Dec. 19 by Egyptian Petroleum Minister Sameh Fahmi who told reporters it will be located near the Suez Canal. The Kuwaiti newspaper as-Siyassah on Dec. 23 quoted Fahmi as saying the plant will be built in partnership with Arab investors. Fahmi, interviewed while attending a petroleum conference in Kuwait, did not say when the refinery would be built. Nor did he name the prospective investors. Egypt's largest refinery, el-Nasr at the Red Sea port of Suez, has a nameplate capacity of 146,300 b/d.

On May 20, 2005, the Egyptian Petroleum Ministry was quoted as announcing plans to have a 350,000 b/d grassroots refinery built at Port Said. It said the project was to be developed by a special purpose venture company to be set up by the ministry and financed with equity raised from a public flotation of shares. Port Said governorate was then reported to have set aside a 3.5m-sq-metre plot of land for the project at the request of Petroleum Minister Fahmi.

MEED on May 20 quoted "a project source" as saying: "The new company will build an integrated third-generation refinery in the Port Said area with investment of about $3,500m. Its aim will be to produce high-quality fuels "as well as maximising stock exchange market utilisation to include citizens and private companies in high-revenue petroleum projects". MEED said details about where the crude oil will come from were still to be provided.

On Oct. 10, Reuters reported that a group including Egyptian, Saudi and Kuwaiti investors planned to have the 130,000 b/d refinery, worth more than $1 bn, built at Ain al-Sokhna. The news agency said Investment and Securities Group (ISG), a Cairo-based private investment banking firm, was the main developer and would take a small stake. But the main shareholders would be the state-owned Egyptian General Petroleum Corp. (EGPC), with roughly 16%, and investors from Kuwait and Saudi Arabia. Reuters quoted an EGPC executive as confirming EGPC's 16% stake in the refinery "but gave no further details".

Reuters quoted the EGPC executive as adding: "It is a greenfield refinery, a brand new refinery. It is mainly targeting exports. The budget will be $1 billion plus. We are still working on that". The refinery, to start up by summer 2009, would process 130,000 b/d of mainly Egyptian heavy crude oil with some imports, and would produce diesel to meet Euro-5 European Union regulations on car emissions.

According to Reuters, the promoters said a contract to take the refinery's output had been agreed upon with Shell. The project will be financed by 30% equity and 70% debt. BNP Paribas of France and Egypt's Commercial International Bank were said to be acting as financial advisers and would underwrite some debt. The EGPC executive said the tender for the project's engineering, producement and construction (EPC) contract was to be announced early in 2006.

The following are profiles of the existing refineries and other new projects in Egypt, and the companies which operate them:

Mostorod Refinery, south of Cairo, has a working capacity of 142,000 b/d and a design capacity of 115,000 b/d. Operated by Cairo Oil Refining Co. (CORC), a unit of EGPC, it came on stream in 1973. It produces gasoline, LPG, naphtha, propane and fuel gas. A vapour recovery unit came on stream in 1985 with a capacity to produce 74,000 t/y of LPG, 286,000 t/y of naphtha, 26,000 t/y of propane and 15,000 t/y of fuel gas. A light naphtha isomerisation unit producing 330,000 t/y of high octane unleaded gasoline and a hydrotreating unit, both using technology licenced by UOP of the US, have been installed at Mostorod, together with a control system, a power distribution network and a fire protection system.

The refinery's general utilities were upgraded as well. These were among EGPC projects completed in 2000. EGPC's engineering unit ENPPI did the work.

Tanta Refinery, north of Cairo, is operated by Cairo Oil Refining Co. It came on stream in 1969 with a design capacity of 25,000 b/d. After a series of debottlenecking works, with an upgrade completed in early 1997, this plant now has a capacity of 54,000 b/d.

Condensate recovery units at both of CORC's refineries produce 2m t/y for the domestic market.

The Mex Refinery, in Alexandria, occasionally exceeds its design capacity of 115,000 b/d. On stream since 1957, it is run by Alexandria Petroleum Co (APC), another EGPC unit. APC has since 1997 formed JV units with private firms, including local banks and insurance companies, to produce a variety of specialty oils at its Mex complex (see below).

Mex was the only refinery in Egypt to operate during the 1967 Arab-Israeli war. A gas recovery unit was installed in 1983 to produce butane. By end-1987 Lummus Crest completed the revamping of the plant's lube oil unit. This raised Mex's capacity and improved product quality. It can process different crudes. A 40,000 t/y hexane resolvent unit was built at Mex in the late 1980s by Kawasaki of Japan. A plant to raise the lube oil capacity from 120,000 t/y to 220,000 t/y was completed in 1995, with a new 30,000 t/y lube oil recycling unit using the process of the Dutch KTI Group. A 30,000 t/y re-refining back oil unit was installed in 1996 to produce 20,000 t/y of base stock and neutral oils.

One of APC's JV units at Mex has a continuous catalytic reformer (CCR) and associated isomerisation and hydrotreating units, using UOP process. They were installed in February 2000. They can turn 13,500 b/d of crudes and 700,000 t/y of naphtha into 880,000 t/y of high octane unleaded gasoline. The contractor was Technipetrol which got the $168m job in late February 1998.

A vacuum distillation unit, a catalytic mid-distillate dewaxing unit, a sour water stripper, an LPG recovery unit and other facilities have been installed at Mex by Tecnicas Reunidas of Spain under a $125m contract signed in June 1998. They enable Mex to produce 356,000 t/y of high quality gasoil, 93,000 t/y of naphtha and 39,000 t/y of LPG.

Alexandria Mineral Oils Co. (AMOC), an APC affiliate which is the largest firm of its kind in Egypt producing mineral and hydraulic oils, has a 100,000 t/y plant built at the Mex complex. On stream in 2000, it produces basic and special oils and 27,000 t/y of wax. These cover local market needs and have reduced imports. AMOC was set up in 1997 with APC holding 20%. The other shareholders include the National Bank of Egypt, Banque Misr, Banque du Caire, Misr Insurance Co. and el-Clark Insurance Co. An initial public offering (IPO) in which AMOC offered 20% of its 86.1m shares to the public closed oversubscribed on Sept. 24, 2005.

In September 2005 AMOC received offers from four international firms to do a feasibility study on maximising production at its refinery, including its gasoil unit which was competed in 2002. They bidders: Poerner Ingenieurgesellschaft of Austria, Technip of France, Foster Wheeler of the US, and UOP.

AMOC has a 110,000 t/y lube oil plant at the Mex complex built by a French unit of Foster Wheeler under a contract signed in early 1998. Technology was licenced from Texaco. A sub-contracting JV of the local Orascom Construction Industries and IEMSA of Italy did the civil and mechanical works at the plant's process line under a contract awarded in 1999. Another JV of local Industrial Construction & Engineering Co. and Italy's Fincimic and Carlo Gavazzi Impianti did the construction under a contract awarded in 1999.

Alexandria Special Petroleum Products Co. (ASPPC), another JV affiliate set up by APC in 1998, has a new plant at the Mex complex producing engine grease, petroleum jelly and bitumens. The main contractor was Tecnicas Reunidas.

APC is the main shareholder in ASPPC, with an equity of 30%. The other partners include local banks and insurance companies, as in the case of AMOC and most APC affiliates.

Ameriya refinery, near Alexandria, is run by EGPC unit Ameriya Oil Refining Co. (AORC). It came on stream in August 1972 with a capacity of 50,000 b/d. It has a 1.6m t/y distillation unit and facilities to produce 750,000 t/y of asphalt, 80,000 t/y of kerosine and 69,000 t/y of lube oils. Since then several units have been added to the plant, increasing its capacity to 75,000 b/d. These include a 1.7m t/y distillation unit using a Russian Technoexport process, a 750,000 t/y vacuum distillation unit, a kerosine desulphuriser, an 80,000 t/y lube oil hydrotreater, a gas oil hydrotreater and a distillate hydrotreater - all using a process developed by IFP. In recent years the capacity of the alkyl-benzene unit was raised to 50,000 t/y. The process is from UOP.

A new 215,000 b/d condensate refining unit was installed at the plant in late 1999 to produce light fuels. The condensates come from a 550 MCF/d gas processing plant at Ameriya. Another plant at the complex completed in 2000 is an isomerisation unit producing high octane unleaded gasoline, as part of government efforts to reduce air pollution in the big urban centres like Cairo and Alexandria. Another unit installed at Ameriya improves the quality of gasoil produced from Western Desert crude oils.

Ameriya has a 150,000 t/y lube oil blending plant. On stream since 1996, it can produce 135 different types of lubricating oil, with a surplus being exported. The plant receives 80% of its base stocks from local suppliers. The other 20% consists of imported lube oils. The complex's infrastructure includes a 1.5 km, 10-inch pipeline carrying imported lube oils from the port of Alexandria, a storage farm near that of APC's Mex refinery, and two four-inch pipelines carrying base oil feedstocks from APC's Mex complex.

Nasr Refinery at Suez, operated by EGPC unit Nasr Petroleum Co. (NPC), was built by Anglo-Egyptian Oilfields and came on stream in 1913. The oldest refinery in Africa, it now has a capacity of 146,300 b/d. Upgrading units are being installed at the complex as separate ventures in partnership with the private sector.

The plant was shut down due to damages sustained in the 1967 war. It was reopened partially in October 1974 when a 2,800 b/d unit was resumed. A second unit, 28,000 b/d, came back on stream in November 1974. Gradually capacity was restored to 50,000 b/d. In 1990 a new 50,000 b/d distillation unit came on stream. The unit has facilities for vapour recovery, caustic washing of LPG and stabilised naphtha.

Wadi Feiran Refinery, run NPC, is a small topping and reforming plant with a distillation capacity of 10,000 b/d. It is located in the Sinai Peninsula.

Misr Oil Processing Co. (MOPCo), set up in early 1998, is one of EGPC's JVs. It was the first to make an IPO in Egypt's oil sector on July 5, 1998, when it issued for sale 30% of its capital of about $88m. Investors bought 35.7m shares at 10 pounds ($2.40) each. But because of a long delay in getting a hydrocracker project at the refinery underway, MOPCo in October 2001 decided to reimburse the shareholders. The funds were disbursed at end-2001. The shareholders included the public, National Bank of Egypt, Bank of Alexandria, Banque Misr, Banque du Caire, Nasser Social Bank, Misr Insurance Co., Commercial Int'l Investment Co. and Commercial Int'l Bank.

MOPCo is haing the hydrocracker built to turn 35,000 b/d of heavy fuel oil surpluses at EGPC refineries into high quality diesel, kerosine, jet fuel, butane and light naphtha. The main contractor was SnamProgetti which got the $449m job in May 1999. MOPCo is having a CCR built beside the hydrocracker, for which UOP has provided the licence and basic designs under a contract signed in October 1998. The CCR is to turn 800,000 t/y of surplus naphtha into high octane unleaded gasoline.

Suez Refinery, the second oldest plant in the country which came on stream in 1921, is run by EGPC unit Suez Petroleum Processing Co. (SPPC). It processes government royalty crude. Its capacity was increased from 18,000 b/d to 58,000 b/d in 1986 with a 40,000 b/d distillation unit. Improvements to the refinery were made in 1983, when a catalyst-reforming unit came on stream enabling production of higher quality super benzene. Soon afterwards a decoking unit started producing mid-distillates (kerosine & gasoil) for the local market and coke for power stations. Subsequently a 40,000 t/y lube oil recycling plant was built at the plant. Now the refinery's capacity is 68,000 b/d.

The plant has a small hydrogen unit. Two 100-ton boilers and a water treatment unit have been installed to raise the rate of vapour generation.

Asyut Refinery, in Upper Egypt, is run by EGPC unit Asyut Oil Refining Co. It was built in 1987 by ENPPI and Petrojet at a cost of $350m and has a capacity of 50,000 b/d.

For local consumption, the refinery can produce 35,000 t/y of gasoline, 325,000 t/y of kerosine, 325,000 t/y of gasoil, 1.4m t/y of fuel oil and 25,000 t/y of LPG.