Projects in the pipeline

Egypt

Alaa Hegazy, chairman and CEO of Engineering for the Petroleum & Process Industries (Enppi), talks to TOGY about oil and gas investments in Egypt and the company’s current projects. Enppi provides engineering, procurement, construction supervision and project management services for the oil and gas, petrochemicals and power industries, among others.

Why should an international investor be looking at Egypt now?
Our economic position has improved and many investors are looking at opportunities here and benefitting from this new economic reality. Most investors have to use commercial loans to finance their projects. Still, Egypt is now a good place to invest; we have a lot of opportunities and a lot of projects in the pipeline.

What is your assessment of Egypt’s oil and gas industry at this point in time?
From the E&P standpoint, there are many companies that have a lot of business now. There are new bid rounds and recent awards, and companies are looking at where they can grow their presence. In Enppi, we are working in the downstream side, and there are also a lot of opportunities for new oil and gas projects. In general, Egypt today offers good opportunities for upstream and downstream operations.

For the downstream, there are recent developments linked to the National Petrochemicals Master Plan as well as refinery projects. What is Enppi’s engagement in these areas?
I’m a member of the committee that controls the major projects in refining and petrochemicals. One of the big projects that we have recently finished and which is operational is the Midor refinery. Another well known project is the ANOPC hydrocracker. The investment in these two projects is close to USD 4 billion. Then we have the USD 2.5-billion Red Sea projects, which include a hydrocracker and CCR [continuous catalytic regeneration] unit.
In addition, we have a lot of refining projects such as asphalt cookers and other engagements with petroleum companies. The amount of money dedicated to these new refining projects is more than USD 10 billion. These projects are already in process. We also have the New Alamein Complex, a project for petrochemicals, a new investment area that is just starting. And there are other petrochemicals development projects such as Ethydco and Sidpec, which are in the tendering phase.
The biggest workload for Enppi right now is in the Red Sea projects for the hydrocracker and the CCR unit, where we work as EPC contractors, jointly with Petrojet. I’m also expecting a lot of work in gas and petrochemicals in the coming years.

Egypt has the biggest refining capacity in Africa. What remains to be done to realise its full potential?
We have heavy crudes that our refineries cannot process and which we export, while we are also importing crudes which we refine locally. The new projects, such as the hydrocracker for fuel oil, aim at reducing the import of oil products. In two years’ time, we will stop producing fuel oil, as it is no longer used; now we are using gas to generate power. We will start cracking this mazut to produce 97 or 98 octane benzene. This is the major ambition of the new projects. Midor is a big refinery, so we can also refine crudes for neighbouring countries.

How is Enppi’s workload distributed between national and international projects, and what markets are you looking at penetrating in the near future?
Our revenues last year reached 59% from local projects and 41% from international projects. Our international revenues have been growing recently. We have a lot of projects in Saudi Arabia with Aramco for utilities, crude or gas treatment plants. We have yet to work with them on petrochemicals.
Our strategy is to implement new companies under Enppi, similar to what we have done in Saudi Arabia and Venezuela. We are looking at Abu Dhabi now, where we have an office, and engineering staff and are working towards establishing a new company. In Iraq, we have a facility, so we are concentrating on getting projects there as the situation domestically is improving. We have another opportunity in Libya, which is a market we are following closely. In Jordan, we have a lot of work on gas projects. We already have a company there, a shareholding company between Egypt and Jordan.
We are also looking at African markets, since we anticipate demand for our services coming from there. This would come in a future stage though, since we are focusing on catering to the local demand now, which keeps rising.

What is the company doing to bring in advanced engineering solutions?
In ASORC and the new Red Sea projects, there are a lot of licences involved. We are buying these licences from Honeywell UOP, Axens or Bechtel. This is new technology we are bringing to Egypt, but it belongs to those licensors.
Egypt has become more receptive to new technology in the past couple of years. The technology for deepwater operations we are bringing is new. We haven’t yet come to the stage of having patents under our name, but hopefully soon we will accomplish that.

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