Egypt's Petrochemical Sector Reaches Top Level With 15M T/Y Plan.

The petrochemical sector in Egypt, having grown rapidly in recent years, has been elevated to the top tier of the industrial hierarchy. The state entity in charge of this is the Egyptian Petrochemicals Holding Co. (Echem) which, as one of three strategic pillars in parallel with the Egyptian General Petroleum Corp. (EGPC) and the Egyptian Natural Gas Holding Co. (Egas), are answering directly to the Ministry of Petroleum. Echem is executing a 20-year, $10 bn Petrochemical Master Plan (PMP) to 2020, adopted in late 2000, to raise the country's production of petrochemicals to 15 million tons per annum for the local market and for export, with new ventures to involve both the private sector and state companies of strategic importance.

The increasing availability of natural gas has been the key factor behind the expansions and the PMP. Based mostly on recommendations made in September 2000 by Chem Systems, the plan calls for 24 petrochemical complexes to be built in big industrial zones along the Mediterranean and Suez/Red Sea coastlines. They will create 100,000 new jobs. A presentation of the PMP was made on May 10, 2001, to a special cabinet meeting chaired by President Mubarak and held at Sharm El Shaikh.

In parallel with the PMP, Egas has a master plan to raise production of natural gas to 7,000 MCF/day by fiscal 2009/10. Availability of feedstocks vital to Echem's sector will rise from 1,400 tons/day of ethane to 8,000 t/d; 750 t/d of commercial propane to 4,355 t/d; and 3,200 t/d of butane to 3,450 t/d. Production of condensate will remain stable at 90,000 b/d through to 2009/10.

The first venture under the PMP is a $196m linear alkyl benzene (LAB) plant to be built in Alexandria with a capacity of 80,000 t/y. There are eight other projects under execution and mostly involving Echem. Together with the LAB plant, these will cost more than $7.7 bn and should be completed within the next two to three years.

Egypt's petrochemical plants now are concentrated at Ameriya, 30 km from Alexandria. There plenty of feedstocks are available, with the gas piped mainly from the Western Desert. Private petrochemical ventures are under construction in the Suez area and the Nile Delta port of Damietta where free zone facilities provide attractive tax breaks and other incentives.

The petrochemical sector was developed late, relative to the country's extensive capabilities in other industries. Before Echem was created in 2002, this sector used to be of less importance and part of EGPC's domain. 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. Montedison later pulled out. In 1982 EGPC decided to go ahead with the project on its own. Egyptian Petrochemical Co. (EPC), a fully-owned unit of EGPC, was formed in the same year to undertake the Ameriya project. Now EPC is part of Echem.