Cairo – Decypha: Egypt’s Petrochemical sector plays a vital role in the development and growth of the country’s economy. Egypt launched a 20-year plan involving a three-phase, $20 million investment program, for the development of the local petrochemical sector, a key concern behind the move is to develop the local supply of petroleum derivatives.
Petrochemicals represented about 3% of the Gross Domestic Product (GDP) and 12% of the total Egyptian industries, according to a research presented to North Africa Downstream Summit. The petrochemical industry also has several drivers, including the presence of sufficient gas reserves that are needed for the industry.
In February, the Egyptian Petrochemicals holding company announced it plans for the implementation of four projects to produce derivatives of ammonium, propylene, formaldehyde and medium density fiberboard. These investments amount to $5 billion, according to Arab Finance.
Moreover, Egypt has the benefit of proximity to the major petrochemical converters in Europe, Africa and the Middle East. Besides, Egypt has a good infrastructure for the industry as it has 15 commercial and 44 specialized ports, including 11 for petroleum.
Egypt is expected to thrive in the petrochemical industry as it is well equipped and has the highest refining capacity in Africa since 2011, despite the political turmoil, Egypt Oil and Gas reported.
Egypt has already invested several packages in the downstream sector and is expecting a promising future in the industry. The Oil Ministry is aiming to optimize the sourcing of downstream and petrochemical, output and mass balancing, along with “driving downstream operations performance transformation,” Egypt Oil and Gas continued.
The leaders of petrochemical industry in Egypt realized the importance to address the performance of the sector and its structure. Hence, they turned down what they usually did in the past when they were rather concerned with exporting raw material and they focus today more on the value added activities as it’s more profitable, Eng. Mohamed Badr, Chairman and CEO of Oil&Gas Skills (OGS), said in an exclusive interview with Egypt Oil and Gas.
The petroleum sector in Egypt owns 8 large petrochemical projects with investments that amount to $7 billion and a total capacity of about 4.5 million tons.
Egypt is currently planning to achieve self-sufficiency of natural gas by 2018, and achieving a surplus by 2020 which can help in achieving added value through the petrochemical industry, al-Milla said in an interview Daily News Egypt.
As for the new petrochemical projects in Egypt, El Molla said that several projects will be implemented that amount to $1 billion, including a project in Alexandria to produce propylene and its derivatives among others.
The Egyptian government has realized the importance of investing in the petrochemical sector over the long term, as it will create more jobs and will help it obtain foreign currency when it exports, Hassan Allam, CEO of Hassam Allam Construction said in an interview with the oil and gas year.
He went on to say that the vast majority of the petrochemical sector investments in Egypt are controlled by the government as it needs major capital expenditures, a long-term view and an effective network to be able to function with the political turmoil that the country has been experiencing.
He concluded by saying that Egypt has has skilled labor and has the ability to compete in the regional market.
By Toqa Ezzeldin
