Japan’s Toyo Engineering has been awarded a $600m contract to built an ethylene cracker by Egyptian Petrochemicals Holding Company (Echem).
The Japanese company will built the 460,000 tonne-a-year (t/y) cracker next to an existing 300,000 t/y facility in Alexandria.
Toyo was sent the Letter of Award (LOA) by Echem at the end of May and the two companies are working towards signing the final engineering, procurement and construction (EPC) contract.
“Its been awarded to Toyo. We expect [the contract signing] in one month. We are just tuning the terms and conditions,” says a source at Echem. The source expects financial close on the deal by the end of November.
Toyo has won the contract ahead of rivals Saipem (Italy), Samsung C&T (South Korea) and Tecnimont (Italy). The technology for the plant is supplied by the US’ CB&I Lummus, which completed the front-end engineering and design (feed) for the project in 2009.
Echem has created a new company for the plant, the Egyptian Ethylene Production Company. The project is a joint venture of Echem and several state-owned entities, such as Egyptian Natural Gas Company (Gasco) and the National Bank of Egypt. Echem holds a 20 per cent stake in the project.
Media reports in April suggest that a consortium of banks will provide $925m in financing. The banks are the local Misr Bank, Commercial International Bank (CIB), National Societe Generale Bank (NSGB) and Arabic African International Bank.
The plant will break down ethane, a component of natural gas, into ethylene, a feedstock for the petrochemicals industry. The development is part of a 20-year masterplan, unveiled in 2002, to develop the country’s petrochemical industry at a cost of $10-20bn.