Several petrochemical projects in Egypt are facing delays due to a shortage in natural gas supplies and the authorities are now focusing on projects that utilize naphtha, Minister of Petroleum Sherif Ismail said.
"The country is suffering from a shortage in gas supplies, which has affected completion of some petrochemical projects, on which work had already started, since they rely on natural gas," Ismail told Zawya.
Projects facing delays include a USD 2.2 billion fertilizer complex in the industrial zone west of Damietta port, which has a planned production capacity of two million tons of urea per year, the minister said.
A USD 408 million polystyrene complex in Dekheila port in Alexandria, with capacity of 200,000 tons per annum (tpa), has also been affected as well as a USD 1.6 billion ethylene and derivatives project in the Western Desert that would bring on stream an additional 460,000 tpa of ethylene production capacity.
"These two projects (polystyrene and ethylene) were due enter the testing phase during the first half of this year, but they are now delayed to the first quarter of 2015," Ismail added.
The Ministry of Petroleum is now focusing on projects that rely on naptha, the minister said. He said the ministry plans to offer, by the end of this year, a project for a complex to produce benzene, propylene and polyethylene.
Initial costs are estimated at around USD 2 billion and the project, to be located in Suez Gulf Industrial Zone, would be executed in three phases with final completion by 2016, the minister said, citing a study by Egyptian Petrochemicals Holding Company and the Egyptian General Petroleum Corporation.
New gas discoveries
Ismail said new gas discoveries were expected to bring on stream an additional 500 million cubic feet (cft) per day.
"The Ministry of Petroleum plans to increase the country's natural gas production by 400-500 million cubic feet per day by the end of 2014 to meet growing local energy demand," he said.
"Due to this the ministry will offer a project to build an olefins complex, which would utilize natural gas, with investments reaching USD 6 billion next year."
Ismail said the Ministry of Petroleum was committed to implementing the national petrochemical plan to 2020, which foresees 24 projects with investments of USD 25 billion.
"[These projects] are expected to realize annual revenues of around USD 16 billion through the production of 20 million tons of petrochemical products."
According to a 2013 Oxford Business Group (OBG) report on Egypt's petrochemical industry, the national plan, which began in 2002, envisages 14 petrochemical complexes, comprising 24 plants and 50 production units.
OBG said one of the major projects under the master plan is the Ethylene and Derivatives Company, which would more than double Egypt's ethylene capacity with an additional 460,000 tpa. The complex would also include a 400,000-tpa polyethylene (PE) plant and a 20,000-tpa butadiene extraction plant. Engineering, procurement and construction contracts for both plants have been awarded to Japanese firm Toyo. The project had been due to begin operations in late 2014.
The second phase of the master plan includes construction of a gas-to-olefins complex, which will have around one million tpa of combined ethylene and propylene capacity, and around one million tpa of combined PE and polypropylene (PP) capacity, according to OBG.
There are also plans for a USD 1.75 billion aromatics complex, which will have a production capacity of 530,000 tpa of para-xylene and 350,000 tpa of benzene. The final phase of the plan includes construction of another propylene and PP plant, a third olefins complex and a styrenic complex. The plan also envisions downstream clusters that will produce final products from plastics and other petrochemicals materials.
Ismail said there were ongoing discussions with the Ministry of Local Development for the allocation of land at governorates for the establishment of manufacturing complexes that rely on petroleum products.
© Zawya 2014
