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Egypt Petrochemicals Report Q1 2012
Business Monitor International, Nov 2011, Pages: 49
Business Monitor International's Egypt Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's petrochemicals industry.
Political uncertainties following the overthrow of Hosni Mubarak’s regime in early 2011 have not upset progress on the expansion of the Egyptian petrochemicals industry, according to BMI’s latest Egypt Petrochemicals Report.
Orascom Construction Industries (OCI) reported in September 2011 that the commissioning of Sorfert Algeria is on track and the plant is scheduled to enter commercial production before the year-end. Sorfert will add 1.2mn tpa of urea and 800,000tpa of ammonia capacity. Meanwhile, Egyptian Fertilizer Company’s debottlenecking initiatives are expected to be completed by end of Q112. The projects will increase capacity by 250,000tpa to 1.55mn tpa.
BMI believes that Egypt remains a ripe destination for investment in petrochemicals due to the potential for the domestic market, its trading relations with other markets in Africa, the Middle East and southern Europe and the scale of its upstream resources. Egypt’s PP market was estimated at 400,000 tonnes in 2011 with domestic production fulfilling less than half of demand. The market has grown at an average of around 8% per annum over the past three years, boosted by growth in downstream industries such as those serving the automotive industry. BMI forecasts 5-7% growth per annum over the next five years, pushing demand to up to 550,000 tonnes by 2016.
In response to rising PP demand, Oriental Petrochemicals Company (OPC) plans to build a 250,000tpa propane dehydrogenation (PDH) unit and increase the capacity of its existing PP plant from 160,000tpa to 220,000tpa by end-2015 at a cost of US$450mn. The company has signed a letter of intent to secure feedstock propane gas from the south of the Red Sea by 2015. The PP unit was idled in May due to a lack of propylene feedstock supply from Libya and high prices in southern Europe. By Q411, it had restarted and operating at 70% capacity due to propylene shortages. OPC expects to return to full capacity in Q112 as Libyan output comes back onstream.
Other projects include EPPC’s new 350,000tpa PP facility at Port Said, a new VCM/PVC plant complex with capacity of 400,000tpa VCM and 200,000tpa PVC with a further 200,000tpa PVC likely to come online in 2013. The Egyptian-Indian Polyester Company has started construction of a 440,000tpa PET plant that is due to begin production in December 2012. The facility will meet Egypt’s domestic demand, currently covered by imports, and will facilitate exports of PET. Meanwhile, EStyrenics is planning Egypt’s first ethylbenzene-styrene monomer plant with 300,000tpa capacity, representing the second phase of a larger styrenics complex. The first phase, which is nearing completion, includes a 200,000tpa PS unit, although there are concerns that it could be a victim of burgeoning overcapacity. Meanwhile, Sidpec is planning a plant with capacity to produce 460,000tpa ethylene.
Carbon Holdings is also making progress at its new olefins product with a three-line Unipol process PE plant with combined capacity of 1.35mn tpa, including three PE plants, each designed for 450,000tpa – one will produce HDPE and the other two will be HDPE/LLDPE swing units. The complex is expected to come onstream in 2015. The PE plants would be fed by a naphtha cracker at the site with the capacity to produce 900,000tpa of ethylene and 400,000tpa of propylene. The ethylene will be utilised by the PE units, while the propylene will be sold on to the Oriental Petrochemicals Company.
In the Middle East and Africa Petrochemicals Business Environment Ratings, Egypt is in ninth place with 47.0 points, unchanged since the previous quarter. It lies just 0.1 point behind Turkey and 7.7 points ahead of Algeria. The score has downside risks owing to the continuing uncertainties relating to the political environment following the overthrow of Hosni Mubarak as president in March 2011. However, growth in capacity should remain on course, making Egypt more self-sufficient in petrochemicals and turning it into a net export in some segments.
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