Petrochemicals and other heavy industries set to be the future of Egypt

In Egypt, petrochemicals is one of the industries that is seeing a strong uptick. (Photo: by Shutterstock)

The petrochemical industry in Egypt is seeking to become more important globally, capturing the increase in global demand, writes Ahmad Abdul-Rahman. He explains how this will be done.

The petrochemicals, chemicals and fertilizer industries in Egypt have witnessed a huge leap in exports over the past year. As well as the fact that they are added value industries, they have also benefited from the availability of natural gas, their biggest ingredient. In 2021 exports of these industries increased by 45 per cent over the previous year to about USD 6.7 billion. This is one of the main reasons for a boom in Egypt's total exports in 2021, according to statements made by the Minister of Petroleum and Mineral Resources, engineer Tarek El Molla.

The ongoing petrochemical projects plan contains a number of projects, including the medium density fiberboard (MDF) project in the Beheira Governorate. This project aims to produce 205,000 cubic metres annually of MDF based on 245,000 tonnes annually of Egyptian rice straw as a raw material. Investments will total 217 million euros

The petrochemical projects underway include a project to produce methanol derivatives. This project aims to produce 87,000 tonnes per year of urea formaldehyde. and 52,000 tonnes per year of sulfonated naphthalene formaldehyde (SNF). The total cost of the project is estimated to be USD 119 million.

The state-owned "Red Sea Refining and Petrochemical Company" aims to establish a petrochemical complex in the Suez Canal Economic Zone. The foundation stone of the project was laid on June 5, 2021. It is the first industrial complex for petroleum and chemical materials in the economic zone.This is part of the state's plan to develop the economic zone so that it contributes to meeting the needs of the local market for petroleum and petrochemical products. The surplus will be exported.

The project will require about 4 million tonnes of imported crude oil to produce about 2,700,000 tonnes per year of petrochemical products and 1,200,000 tonnes per year of petroleum products. This will require a total investment of about USD 7.5 billion. .

A new unit was also established by the Egyptian Ethylene and Derivatives Company (ETHYDCO), to manufacture and produce 60,000 tonnes annually of coloured high and medium density polyethylene. This material is used in the manufacture of gas, water, and high-pressure pipeline networks, as well as sewage and industrial networks. It is also used in infrastructure and reconstruction projects within the major national projects implemented by the state. This is in addition to its use in desalinating seawater, which reduces the import of such type of pipes.Total investment in the project is i expected to exceed USD 50 million.

A shareholder agreement was signed in August 2021 to establish the "Misr Methanol and Petrochemicals Company" to produce methanol, ammonia, and petrochemicals. Located in Ain Sokhna Complex, in the Suez Governorate, the shareholder agreement was signed between Abu Qir Fertilizers and Chemical Industries Company, Helwan Fertilizers Company and Al Ahly Capital Holding Company. The project aims to meet the local market's needs for methanol and its derivatives. The surplus will be exported.

The investment cost of this new company is about USD 1.6 billion. It will have a production capacity of one million tonnes of methanol and 400,000 tonnes of ammonia annually. Its location gives the project a competitive advantage because of the many economic advantages granted by the 'General Authority for the Economic Zone of the Suez Canal' to encourage and attract investments.

The Ministry of Petroleum and Mineral Resources gives full support to the petrochemical industry, with investments in the industry increasing each year. The petrochemical industry continues to modernise and receive support for its projects from the Supreme Committee for Petroleum Projects which is part of the Ministry of Petroleum and Mineral Resources)

Molla also said the strategy of the petrochemical industry has been updated to reflect developments in Egypt as well as globally. He also reiterated the importance of the investment opportunities offered in the petrochemical industry and that the private sector could team up with the public to seize opportunities and form partnerships that benefit the large local market, Egypt's African and regional backers, and globally. For example, there is increasing demand for petrochemical industry products worldwide.

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Sunday, 25 September 2022