Under the MoU, the government would commit itself to provide the essential infrastructure for the project, a 30-square-kilometre plot of land between Alexandria and Damietta on the Mediterranean coast as well as regulatory and legal support, official lending and marketing support and ethane feedstock. NOOR Development, set up by a UK-based sponsor, will develop all other aspects of the greenfield complex.
Top government officials, including President Mubarak and Prime Minister Ahmed Nazif, have expressed their desire to go ahead with the project following several presentations made by Noor Development in recent weeks, says a source involved in the project.
According to pre-feasibility studies carried out by the US' Jacobs Consultancy and the UK's Nexant, the project would add about $5,600 million to the country's gross domestic product (GDP), mostly from the export of refined products and petrochemicals. Gains would also come from sales to the local market by substituting imports. About 350,000 barrels a day (b/d) of crude feedstock for the project would be sourced at market price from the 2.5 million-barrel-a-day (b/d) Sumed pipeline, jointly owned by Egypt, Saudi Arabia, Kuwait, the UAE and Qatar, and linking Suez with the Mediterranean at Sidi Krier. Between 700,000-1.2 million tonnes a year (t/y) of ethane feedstock would be purchased from the government.
The refinery will have capacity of 350,000 b/d. Designed to meet all European and US specifications, it will produce coke, diesel, ethane, fuel oil, jet gasoline, propylene, petrochemical and aromatic-rich naphtha, and liquefied petroleum gas (LPG).
The integrated petrochemicals complex will feature a world-scale ethane cracker and produce 2.6 million t/y of olefins and 1.4 million t/y of aromatics, which would also provide significant amounts of feedstock for projects planned under the government's petrochemicals masterplan. Related utilities will involve a 150-MW power plant. The project is scheduled to be completed within five-six years. The project company operating the complex will be NOOR Refining & Petrochemicals Holding Company (NOOR Holding).
Jacobs is now working on conceptual studies, to be completed by year-end, looking at a range of issues including soil, infrastructure and environmental issues, which will be followed by a full feasibility study.
The project is set to be financed 70 per cent by debt and 30 per cent by equity. The source says that interested regional investors have already offered equity commitments to the tune of 50 per cent of the project's requirements. The project will be the single largest hydrocarbons investment in the country and - together with the Rabigh integrated complex being developed by a joint venture of Saudi Aramco and Japan's Sumitomo Chemical Corporation in Saudi Arabia - the only project of its kind and size in the region.
Integrated refining and petrochemicals projects are aimed at taking advantage of the synergies between the two elements to reduce costs, increase efficiency and widen the product slate.