The government has decided to go ahead with a plan to build a network of petrochemicals plants involving investment of $10,000 million over 20 years.

The 28 September announcement by Prime Minister Atef Obeid came after a meeting with Petroleum Minister Sameh Fahmy and senior industry executives to review a masterplan prepared by Chem Systems of the UK. Andrew Spiers, head of the Middle East division of the firm, says the plan has looked at market conditions, feedstock availability and competition, as well as what kind of project to carry out in what location. 'It is a vision for petrochemicals over 20 years, ' he says.

Fahmy said the fruits of the programme would start to become evident in 2005, when the first exports would begin. He said the plan calls for production of 15 million tonnes a year of petrochemicals, involving 20 different products and 24 major complexes.

He said Damietta has been selected as the first location, followed by Alexandria and Suez. Egypt's petrochemicals industry started to be developed in the 1980s, but is still relatively small scale. The largest project now going ahead is an ethylene/polyethylene complex being built in Alexandria by Sidi Krier Petrochemical Company, which is majority state-owned. The private Orient Petrochemical Company is also building a polypropylene complex in the new Suez industrial zone (see below).

Analysts say plans to invite consultants to prepare detailed plans for a petrochemicals complex in Suez are likely to remain on hold, while the findings of the masterplan are digested.