Approximately $2.7 billion will be utilised throughout 2015 and 2016 to complete the implementation of the Egyptian Refining Company’s (ERC) project in Mostorod, according to Wael Al-Orabi, the company’s Commercial Director.

Approximately $1 billion has already been invested in the project by the Qalaa Holding subsidiary, with total investments estimated at $3.7bn.

Al-Orabi said in exclusive statements to Al-Borsa that a contract has been signed with the Egyptian General Petroleum Corporation (EGPC) to receive fuel oil. It will be converted into diesel at the Mostorod refinery and then resold to EGPC at global prices over a period of 25 years.

Al-Orabi added that actual production will begin during the first quarter of 2017 and the necessary permits are currently being approved to determine the course of transport for company equipment manufactured abroad. The equipment has already been sent to the Port of Adebeya in Suez several months ago, but requires special preparation to protect the road from the port to the site in Mostorod from damage.

He pointed out that transporting equipment to the company’s site in Mostorod is scheduled to begin in August, after the foundations of the project are established in July. EGPC will purchase shares amounting to 25% of the project, while the remainder will be divided amongst a number of Arab investors.

Al-Orabi said that the project will provide 50%-60% of domestic diesel needs, which will save approximately $300 million annually from the state budget for import, shipping, and transport costs of petroleum products.

He added that the project is one of many important national projects enjoying backing from all government agencies, including the Ministry of Petroleum.

In press statements Monday, one company official stated that infrastructure for the project is currently underway in preparation to install the equipment which has already reached the Adabya Port in Suez. The official pointed out that each piece of equipment will be transported separately and will take around a week to reach the project site in Mostorod.

He added that the project will occupy an area of 320,000sqm in Mostorod with total production reaching 2.3 million tonnes of diesel annually.

Source: Al-Boursa