Alex LAB plant moves ahead

25 February 2003
Egyptian Petrochemicals Holding Company (ECHEM)is preparing to sign a milestone agreement by the end of February for the estimated $196 million linear alkyl benzene (LAB) plant to be built in Alexandria.

The agreement will include the official appointment of a local private sector offtaker, the signing of a feedstock agreement and licensing of technology for the plant (MEED 24:1:02).

The kerosine and benzene feedstock is expected to come from Alexandria National Refining & Petrochemicals Company. UOPof the US is understood to be in line to provide the technology. ECHEM has declined to identify the offtaker until the agreement is signed. Local contractors say they expect a call for expressions of interest in the project shortly afterwards.

The agreement also covers the formation of the holding company responsible for the 80,000-tonne-a-year project, in which the offtaker will take a 5 per cent stake. The other equity holders will include Echem with 35 per cent, Egyptian General Petroleum Companywith 10 per cent, National Investment Bank(NIB) with 40 per cent and Commercial International Bank(CIB), which will takea 10 per cent stake.

The equity covers 35 per cent of the total project cost. The remaining $127.5 million is expected to be covered by international debt financing, to be arranged by CIB and NIB.

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