Optimised feedstock

Egypt

TOGY talks to Saad Helal, chairman of Egyptian Petrochemicals Holding Company (ECHEM), about growth in Egypt’s petrochemicals market, the scope of the New Alamein project and the company’s efforts to add value. Established in 2002 to manage and develop the petrochemicals industry, ECHEM seeks to optimise the utilisation of natural gas in value-added products.

Egypt is now in the third phase of the National Petrochemicals Master Plan. What are its main highlights?
When the National Petrochemicals Master Plan was first devised covering 2002-2022, it was based on certain criteria enabling the execution of projects strongly in demand to establish Egypt as a major player in the Middle East petrochemicals market.
Since ECHEM’s inception in 2002, the map of resources in Egypt has changed, in addition to the country’s political and economic changes. It was therefore essential to update the plan to accommodate such changes in the local and international markets.
The highlights of the updated master plan revolve around appropriate feedstock availability, the range of products demanded locally and internationally, new investors, new technologies and maximising the value chain.

What is Egypt’s petrochemicals exports vs. domestic consumption balance?
Our operating companies, Sidpec, Ethydco, ELAB, E-Methanex [Methanex Egypt] and Mopco, produce a wide range of products, amounting to 4.2 million tonnes per year. Our most recent figures indicate the export of around 3.1 million tonnes per year. Meanwhile the rest is directed toward the local market according to industry demands.
The nature of the petrochemical industry does not allow one to generalise exports vs. domestic consumption. Each product has a map of its own depending on local and international competitive prices, demand cycles and market fluctuations.
However, after adopting the national plan for Egypt 2030, we expect the market will definitely be making way for growth for several reasons. New residential and industrial cities are underway, in addition to the national policy of adopting the establishment of small and medium-sized industrial farms. This increasing momentum of development assures us that the petrochemicals market in Egypt is growing.

What role does the New Alamein petrochemicals project play in using local feedstocks?
ECHEM and the petroleum sector companies intend to utilise the available local crude oil produced from the Western Desert, which is currently exported, in order to implement a modern petro-refinery complex. This complex shall produce specialised high-value petrochemical products such as MEG, VAM derivatives, styrene, PG and EPDM, in addition to high-value petroleum products such as kerosene/JET.
The execution of such a mega-project aims to cope with the national plans for sustainable development in the Alamein new city, to satisfy the local market demands, export the surplus and to stimulate SMEs in several applications for the project’s speciality products.
The project configuration is currently under optimisation for the sake of enhancing project operability and profitability through maximising utilisation of the Western Desert’s crude oil, minimising the imported condensate and decreasing the capex.
The project, with a total investment cost of USD 8.5 billion, will be located on ECHEM’s land (1,848.5 acres [7.5 square kilometres]) within the Industrial Zone of Al Alamein new city, 8 kilometres from El Hamra, maximising the utilisation of Wepco and El Hamra Port’s existing facilities. The project location has a unique competitiveness as it has direct access to the targeted markets in Western Europe and Turkey. In the meantime, international traders express their appetites to have long-term offtake for the project’s petrochemical products.

How are you promoting integration between sister companies to increase efficiencies?
ECHEM assumes a role in integration between affiliated companies, optimising their land, utilities and products to maximise the value chain. Examples of such integration are the propylene and derivatives project on Sidpec’s land, the polybutadiene project on Ethydco’s land, electrical substations, methanol derivatives, MDF [medium-density fibreboard], etc. This integration also maximises the added value of investment.
ECHEM has also assumed a pioneering project serving the environment, namely the bio-ethanol project, which aims to produce bio-ethanol from rice straw.

How are you taking advantage of Egypt’s strategic position as a leading petrochemical hub for the African continent?
It is our vision to become a petrochemicals hub for the African continent. It is our aim that our new projects and market strategies will enable us to penetrate the African market during the coming years.

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