Egypt advances refinery modernization projects

Egypt has finalized a series of joint agreements with a subsidiary of Technip SA, Paris, to provide work on projects designed to upgrade and modernize operations at two of the country’s aging refineries.

Under the separate agreements, which were signed during a late-July visit to Italy by Egyptian government officials, Technip Italy SPA will provide an array of services for modernization projects at Egyptian General Petroleum Corp.’s (EGPC) 4.5 million-tonne/year (tpy) Assiut refinery in Upper Egypt, and Middle East Oil Refining Co.’s (Midor) 100,000-b/d refinery in Alexandria, Technip said.

The agreements under the framework of a long-standing relationship between Italian and Egyptian governments and companies to boost cooperation in developing Egypt’s upstream and downstream petroleum sectors, according to Technip and Egypt’s Ministry of Petroleum (MOP).

Assiut refinery

As part of its agreement with EGPC, Technip said it immediately will begin activities related to a $1.5-billion modernization project that would maximize diesel production from bottom-of-the-barrel components at EGPC subsidiary Assiut Petroleum Refining Co.’s (ASORC) refinery in Asyut, about 400 km south of Cairo.

While it plans to take responsibility for engineering, procurement, and construction (EPC) on Assuit modernization at a future point, Technip also is working to ensure financing for the project with Italian export credit agency SACE, which may consider an intervention to support the revamp plan, the service provider said.

Last year, ASORC secured $198 million in financing from Saudi-based Islamic Development Bank (IDB) for the proposed project, which is to include a 1.4 million-tpy diesel hydrocracking complex to convert lower-quality heavy fuels into high-quality petroleum products such as LPG, naphtha, kerosine, and gasoline (OGJ Online, Sept. 3, 2014).

The project, which will require a total investment of $2.8-2.9 billion, is designed to help meet Egypt’s rising demand for petroleum products, EGPC and MOP said in 2013.

The diesel hydrotreating complex would increase the refinery’s diesel production capacity to about 1 million tpy, LPG production to 76,000 tpy, gasoline production to 442,000 tpy, and jet fuel production to 628,000 tpy, according to a July 25 statement from MOP.

A revised timeline for the project was not disclosed, but the diesel hydrotreating complex previously was scheduled to be operational between 2016 and 2017, according to MOP.

Midor refinery

At the Midor refinery, in Alexandria’s El Amreya Free Zone, Technip Italy will work on a $1.4-billion modernization project that, in addition to improving the quality of production yields at the plant, would expand the refinery’s nameplate crude processing capacity to 160,000 b/d from its current 100,000 b/d.

As part of its agreement with Midor, Technip said, in due course, that it will provide EPC services for the expansion project, as well as immediately begin unidentified activities related to the revamp.

Included in Technip’s agreement with the Egyptian state-owned refiner is a commitment by SACE to launch an evaluation process that would ensure an export credit facility to support the expansion project, according to the service provider.

Once completed, the project would enable the refinery to produce 1.6 million tpy of diesel, 488,000 tpy of gasoline, 71,000 tpy of LPG, and 672,000 tpy of jet fuel, MOP said.

Earlier in the year, Midor let two contracts worth a total of $1.4 billion to UOP LLC, a unit of a Honeywell International, to provide engineering designs and licensing for new units to be included as part of the expansion (OGJ Online, Apr. 9, 2015).

At the time, MOP said the expansion would equip the Midor refinery to produce 245,000 tpy of LPG, 1.3 million tpy of high-octane gasoline, and 2.3 million tpy of diesel meeting European quality specifications.

The Egyptian government has disclosed neither a construction timeline nor possible commissioning date for the proposed capacity expansion at Midor.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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