Cairo, 29th August: The Egyptian Refining Company (ERC) and a consortium consisting of GS Engineering & Construction - South Korea and Mitsui & Co. - Japan today signed an Engineering, Procurement and Construction (EPC) contract for a complete hydro-cracking/coking facility and ancillary units adjacent to the existing Cairo Oil Refinery Company (CORC) and the storage facilities of the Pipeline Petroleum Company (PPC) facilities in Cairo.  

The total EPC contract value, at $1.9 billion, is among the largest EPC contracts ever signed in Egypt and forms the largest part of a total expected project cost of $2.25 billion. The facility is expected to be completed and commissioned within 49 months (September 2011).

ERC was jointly established between a Citadel Capital-led consortium of Egyptian and Arab investors (85%) and Egyptian oil companies (15%).  ERC has successfully obtained all necessary regulatory approvals required for the project, including those from the Egyptian General Petroleum Corporation (EGPC), the Egyptian Environmental Affairs Agency (EEAA), the Industrial Development Authority (IDA) and the General Authority for Investment and Free Zones (GAFI).

The refinery is designed and configured to maximize the production of distillates such as diesel and gasoline through the cracking of heavier atmospheric residue which is fully supplied from the neighbouring Cairo Oil Refining Company under a long term supply contract.    

ERC's unique location in Cairo is expected to achieve a net benefit to EGPC of approximately $ 200 million, primarily through savings on freight and insurance arrangements that would have otherwise been required to import such petroleum products into Egypt and deliver them in the Greater Cairo market.

The environmentally-friendly technology selected for the facility allows for the production of 700,000 tons high octane gasoline without having to use environmentally hazardous additives such as MTBE and lead.  Furthermore, the facility will have the capability to produce 2.2 million tons of diesel in accordance with the latest Euro V specifications (which come into force in 2009).  In total, it is expected that the upgrading of the atmospheric residue into lighter products of higher quality, using the selected technology, will prevent the release of 75,000 tons of sulphur into the atmosphere in Greater Cairo.

Marwan Elaraby, Chairman of the Board of ERC, stated that he expects the facility to be operational by 2011 with a total production capacity of 5 million tons, with all of the production of light petroleum products being sold under a long-term off- take agreement for consumption by the growing Greater Cairo market.

Ahmed El-Housseiny, Managing Director of Citadel and Member of the Board of ERC, added that Societe Generale - London, who are acting as the financial advisors to ERC, are currently preparing the project debt financing plan.  El-Houssieny expects that several of the largest international and local banks will be part of this large debt financing plan, in addition to export credit agencies.

-Ends-

Citadel Capital is a leading, Egypt-based private equity firm focused on acquisitions, turnarounds and green-fields in Egypt and the Middle East region. Established in 2004, Citadel now manages a portfolio of more than $5 billion in various industries including mining, oil & gas, cement and transportation.

For more information contact:
Citadel Capital (S.A.E.)
Corporate Communications Department        
Ms. Magda Habib
mhabib@citadelcapital.com
Tel : +202 27914440
Fax: +202 27914448

© Press Release 2007