The Asyut Hydrogen Cracking Facility project, planned by the national oil company Egyptian General Petroleum Corporation, is still on hold and is unlikely to see progress in the near future due to problems with obtaining financing.

“We’re waiting for financing and it could take a long time,” said a source with knowledge of the project.

The project has a budget of $887m and financing was initially expected to be finalised by the end of the first quarter of 2012, but the scheme still remains at the study stage after seeing a number of setbacks.

Egypt is currently wrestling with its worst energy crisis in decades, which is creating a challenging investment environment for oil and gas projects.

A shortage of natural gas has led to feed stocks being diverted away from many facilities to meet domestic demand.

The crisis has also led to the Egyptian government building up about $5.9bn of debt owed to international oil companies (IOCs), making them reluctant to increase investment in the country.

The Asyut cracking facility is to be built at the mazut complex in the Asyut refinery. Once constructed, it will convert 50,000 barrels a day (b/d) of mazut into more marketable products such as diesel. Mazut is a low-grade fuel oil.

The plant will include:

• Hydrogen cracking facility
• Coker hydrotreater
• Fastbreaker hydrotreater
• Associated facilities