Egypt Moves Ahead on Oil and Gas Industry by Building 2 Billions Refinery Project

Cairo, Egypt | November 02, 2007 by D-8 Secretariat

GS Engineering & Construction signed a $1.8 billion contract to build secondary processing units as part of a new refinery being built by Egyptian Refining Company, on late August 2007. GS will build the units in the refinery in Mostorod, north of the Egyptian capital Cairo, by September 2011, the company said.

The complex units include a 80,000 barrels per day (bpd) vacuum distillation unit (VDU), and a 40,000-bpd hydrocracker that can transform low-quality products into middle distillates which are in higher demand.

GS Engineering said it will be responsible for building the upgrade units, while the Egyptian refiner will build refining facilities such as crude distillation units (CDUs).

The capacity of the CDUs was not immediately known.

Earlier last month, Citadel Capital, an Egyptian private equity firm with investments in energy and cement, said it would start building a $2.4bn refinery with an annual capacity of 5 million tonnes (about 100,000 bpd) of refined products, which it planned to complete in four years.

Its chairman said the firm had formed a company called the Egyptian Refining Company. State-run refiner Egyption General Petroleum Corporation owns 15pc of the company.

The move to build and expand refiner facilities comes as Egypt is drawing interest from international firms keen to tap the country’s oil and gas reserves.

Egyptian Oil Minister Sameh Fahmy had said the country aimed to increase oil output by 100,000bpd to 800,000bpd next year by developing recent discoveries in the Gulf of Suez and the western Sahara.

With regards to this particular sector of cooperation, Egypt has been confirming her readiness to host D-8 IV Working Group in autumn 2007. D-8 Organisation through its secretary general, expressed hope that this working group can benefit all member states in gaining a lesson from Egypt in formulating policies to support the need of energy in each of the respective countries, as well as to identify issues of common interest and areas for more intensive co-operation in the energy sector for hydrocarbons and renewables, as well as energy efficiency.

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