Egypt is Africa’s second largest oil refining country and holds 23% of the continent’s total, domestically produced, crude oil. Egypt’s market is comprised of nine refineries—all operated by Egyptian General Petroleum Corporation (EGPC) with the exception of the privately owned, MIDOR Refinery in Alexandria. The Wall Street Journal reported in 2013 that, “Egypt will spend $18 billion over coming years to build new refineries and modify existing plants in a move to increase its annual fuel output.” Most of the refineries are located in Cairo, Alexandria, or Suez. According to the Mbendi information services, the operating capacities for the refineries are as follows:

In Alexandria:

The Amiriyah Petroleum Refining Company has a capacity of 78,000 b/d, and a 15,000 b/d vacuum distillation unit. It has a 9,000 b/d alkylation unit, and a 2,000 b/d lube baseoil manufacturing unit.

The El Mex Refinery, operated by the Alexandria Petroleum Company, has a capacity of 117,000 b/d, and 22,500 b/d of vacuum distillation capacity. In addition, it has a lube baseoil manufacturing plant and a bitumen unit.

The Middle East Oil Refinery (MIDOR) was completed in 2002 in the Amiriyah Free Zone, Alexandria. It has a capacity of 100,000 b/d, and has a 35,000 b/d hydrocracker, a 22,800 b/d coker, and a 10,700 b/d isomerisation unit. Originally a joint Egyptian/Israeli venture, the Israeli shareholders sold out to the Egyptian National Bank in 2000.

Suez:

The El-Nasr Petroleum Company near Suez has a capacity of 146,300 b/d. It has a 35,000 b/d hydrocracker and a bitumen unit.

The El-Nasr Petroleum Company also operates the small Wadi Feran refinery on the Red Sea in the Gulf of Suez. It has a capacity of 8,550 b/d, and was designed to service operations related to the Suez Canal.

The Suez Petroleum Processing Company near Suez has a capacity of 66,400 b/d, and a 9,500 b/d vacuum distillation unit. It has a 16,400 b/d delayed coker, and a 1,000 b/d lube baseoil unit.

Rest of Egypt:

The Asyut Petroleum Refining Company near the center of Egypt has a capacity of 47,000 b/d. This simple refinery has a small Naphtha Reformer, and is designed to supply product to the central and southern regions.

The Tanta refinery near Port Said is operated by the Cairo Petroleum Refining Company. It has a capacity of 35,000 b/d. Other than a small hydrotreating unit it has no upgrading capacity.

The Cairo Petroleum Refining Company in Mostorod, near Cairo has a capacity of 145,000b/d.

Egypt’s Refined Products

The majority of Egypt’s refined products are sold to local markets. Oil producers in Egypt are required to sell their crude oil to the Egyptian General Petroleum Corporation (EGPC) at a price below the world market price, and EGPC then sells the crude to its refineries on the global market, according to the 2013 African Economic Outlook.

Egypt has to import diesel to satisfy local demand, since diesel consumption is double that of gasoline consumption. According to Foreign Reports, EGPC sells diesel locally at retail for 59 cents per gallon, but it pays about $2.80 per gallon wholesale for imports by the tanker-load.

According to the U.S. Energy Information Administration, “Egypt exported around 100,000 bbl/d of crude oil including lease condensate in 2012. Most of Egypt’s exports were sent to India (46%), the United States (32%), and Italy (17%) in 2012.”

Egypt is also dependent on foreign products, and “is receiving fuel shipments to cover its needs for this month, an energy official said… despite $6 billion of free fuel given by its Gulf allies,” reported Ahram Online last month, adding that aid from Saudi Arabia, UAE, and Kuwait is expected to continue through September.

Importing Arabian Crude For Egyptian Refineries

Tarek El-Molla, CEO of EGPC, recently told Daily News Egypt that Egypt would begin importing Arabian oil for Egypt’s refineries, and exporting the higher-quality crude produced in the Western Desert. “El-Molla said this is because Egyptian plants require API 31 crude, which is similar to the crude produced by Belayim Petroleum and Arabian Crude.

The Western Desert produces API 42 crude, according to El-Molla,” reported Daily News Egypt, adding that there is a pipeline being constructed to transport crude from the Western Desert’s Hamra oil field to the SUMED repositories in the Alexandria port.

The project is purported to garner positive margins for the state, SUMED, the Ministry of Petroleum, and the MIDOR refinery. El-Molla noted, that “Western Desert crude will not be exported all at once, but through a gradual process,” said Daily News Egypt. Amounting to about 680,000 b/d, production from the Western Desert fields is estimated to be about 55% of Egyptian crude production.

Of Egypt’s three main oil grades—Suez, Balyin, and Western Desert—the majority is refined domestically and sold at a discount, with only a small percentage sold to international markets.

New Refinery to Upgrade Egypt’s Capacity

Construction of the new Egyptian Refinery Company (ERC) was planned to begin in April 2014 and scheduled to last three years, according to the Oil & Gas Journal. Construction of the refinery, proposed in 2006, met delays following the 2008/9 financial crisis, and the 2011 uprising.

ERC planned to increase Egypt’s refinery capacity for the first time since 2001, when the 100,000 b/d Sidi Kerir refinery came online, According to Arab Oil and Gas Journal.

“The Egyptian Refinery Company (ERC) plant, 20 km north of Cairo, will use fuel oil produced by an old refinery nearby as feedstock to produce 2.3 million tons of diesel per year,” said The African Report, adding that the refinery is expected to produce half the volume of diesel that Egypt currently imports. The plant is projected to be online by 2017.

In a July 2014 Mada Masr report, the article said that the ERC refinery— actually an expansion of the 1969 complex, Cairo Oil Refinery Company (CORC), located 40 km north of Cairo—is currently the “the largest investment on the African continent.”

“ERC’s plan is to buy 67% of CORC’s fuel oil, use it as a feedstock, refine it and produce over 4.1 billion tons of lighter petroleum products — mostly diesel (an estimated 2.3 billion tons), but also gasoline, jet fuel and Liquefied Petroleum Gas (LPG),” said Mada Masr.

The refined products will be sold to EGPC at international prices, as opposed to the below-market, subsidized prices.

“Egypt’s demand for diesel is higher than what the country can refine,” Thomas Thomason, the CEO of ERC told Mada Masr. “So when we’re operational in 2016, we will provide 50% of the diesel Egypt is currently importing. It’s a fantastic project for Egypt.”

According to The Africa Report, “ERC has secured funding through a $2.6 billion debt package and $1.1 billion in equity provided by the Egyptian General Petroleum Corporation (EGPC), Qatar Petroleum International and Egyptian private equity firm Citadel Capital, among others.”

The refinery is expected to save Egypt $300 million a year, in an effort to wean Egypt of its dependency on foreign loans and donation from oil producing Gulf nations.

By Lily Leach

Download