Egypt advances plan for new refining, petrochemical complex

May 24, 2021

State-owned Red Sea Refining and Petrochemical Co. (RSNRPC) is moving forward with plans to build a grassroots integrated refining and petrochemicals complex on the Gulf of Suez at the Suez Canal Economic Zone (SCZone) in Ain Sokhna, Suez Province, Egypt, east of Cairo.

As part of a contract signed on Apr. 28 with Main Development Co. (MDC)—the SCZone’s main developer—RSNRPC will establish what will become Ain Sokhna’s largest refining and petrochemical complex on 3.56 million sq m within the zone’s southern sector in line with the Egyptian government’s plan to help meet increased demand for transportation fuels and petrochemical products in Egypt’s domestic market as well as create opportunity for exports abroad, the government and SCZone said in separate releases.

Now requiring an overall investment of $7.5 billion, RSNRPC’s proposed Ain Sokhna complex—which will produce polyethylene, polypropylene, polyesters, bunker fuel, and other high-value petroleum and chemical products—is a project under the downstream pillar of Egypt’s Ministry of Petroleum & Mineral Resources’ (MOPMR) petroleum sector modernization program (PSMP) to help transform Egypt into a strategic hub for global oil and gas trade, according to Tariq El -Molla, minister of MOPMR.

In addition to Egypt’s domestic market of 92 million people, production from the planned complex theoretically would be able to reach 1.8 billion consumers in Europe, the Asia Pacific, the Middle East, and Africa via the SCZone’s multiple port facilities, MDC data show.

RSNRPC’s project development contract with MDC follows state-owned Egyptian Petrochemicals Holding Co.’s (ECHEM) February 2020 signing of a heads of agreement (HOA) Bechtel Corp. for execution of engineering, procurement, and construction (EPC) on a proposed integrated refining and petrochemicals complex in the SCZone (OGJ Online, Feb. 14, 2020). While few details of the proposed complex were revealed at that time, Bechtel confirmed to OGJ in a May 4 e-mail the ECHEM and RSNRPC projects are one in the same.

Project documents from MOPMR dated February 2021 indicate RSNRPC’s complex—formerly estimated to cost of $6.2 billion—will process about 4 million tonnes/year of crude oil to produce 2.7 million tpy of petrochemical products and 1.2 million tpy of petroleum products.

The complex is scheduled to be completed by yearend 2024, according to MOPMR.

Egypt’s PSMP

Developed in 2016 as part of Egypt’s strategy to reignite investment interest in its petroleum industry following sharp declines in activity in the aftermath of the country’s 2011 revolution, PSMP’s downstream performance and energy efficiency pillar specifically focuses on projects to develop, upgrade, further integrate, and maximize use of existing state-owned refining, petrochemical, gas processing, transportation, and distribution operations to cope with ever-increasing domestic demand. Objectives of the program include increasing productivity and profitability related to production and distribution of petroleum products, lowering production costs at manufacturing sites, and reducing imports from abroad to help improve the national trade balance (OGJ Online, Apr. 6, 2020).

PSMP’s downstream pillar—the core of which hinges on enhancing energy efficiency across the sector, in line with Egypt’s Vision 2030 for sustainable development—proposes to expand domestic refining capacity by 3 million tpy.