ECHEM aims to launch five projects in 2003

23 January 2003
Egyptian Petrochemicals Holding Company (ECHEM) executive deputy chairman Sharif Ismael told MEED's 1st Egyptian Petrochemicals conference on 23 January that the company expects five petrochemicals projects including a 1 million tonne a year (t/y) ethylene complex to be launched by the end of 2003. He also said that UK consulting firm Nexantis due to complete a utilities and infrastructure masterplan to support petrochemicals initiatives by the start of April 2003. Ismael said that three of the five projects, which involve investment of more than $3,000 million, were already fully subscribed. 'These three projects have had pre-feasilibilty studies and discussions are underway with investors, offtakers, and banks,' he said. 'We are now ready to move with two of these projects to sign shareholder agreements and start front-end engineering.' Ismael said the plan to build a 350,000 t/y polypropylene plant in Suez is complete. ECHEM is to take a 30 per cent equity stake in the project. The other shareholders will be Oriental Petrochemicals Company with 25 per cent, the National Investment Bank (NIB)with 30 per cent, and Banque Misrwith 15 per cent. Banque Misr is also to act as lead manager for a proposed syndicated loan to help finance the $230 million scheme.

Ismael said a local private sector offtaker has been found for the 80,000 t/y linear alkyl benzene (LAB) plant to be built in Alexandria. The equity plan calls for ECHEM to take 35 per cent, Egyptian General Petroleum Company10 per cent, NIB 40 per cent, Commercial International Bank10 per cent and the local offtaker 5 per cent. 'We will sign the shareholder agreement by mid-February,' he said The third project is the 1 million t/y ethylene/polyethylene complex, for which a memorandum of understanding has been signed with an international chemicals company. 'We are jointly doing a detailed feasibility study,' Isamel said. 'By the end of April, we shall sign a joint venture agreement subject to a satisfactory feasibility study.' ECHEM declined to identify the company, but it is understood to be Chevron Phillips Chemical Company of the US. ECHEM is to take a 25 per cent equity in the joint venture and Chevron Phillips is to take 75 per cent. Total investment is to be $1,500 million.

The two other projects to be launched this year are a 1.7 million t/y methanol plant and a styrene/polystyrene complex with combined capacity of 500,000 t/y. 'For the methanol plant, we want to find enough offtakers for the total production,' Ismael said. 'We have reached an understanding with one offtaker for half of the output and to subscribe to some of the equity. We believe that we will conclude discussions by early March and we hope to be fully subscribed by the end of the second quarter.' Plans for the $590 million project call for ECHEM to take 30 per cent of the equity, an international investor to take 20 per cent, offtakers to take 10 per cent and a further unidentified investor to take 40 per cent. Turning to the $350 million styrene/polystyrene plant, Ismael said ECHEM is talking to international investors. 'We hope to be in a position to finalise discussions with a multinational investor by the second half of this year.' State-owned ECHEM was set up in January 2002 to implement the Egyptian Petrochemicals masterplan, which calls for investment of $10,000 million in more than 20 projects over the next two decades.

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