The Egyptian Refining Company (ERC), a subsidiary of Qalaa Holdings, has announced its intention to complete the repayment of $1.25 billion in initial loans for the Mostorod Refinery Project during the first quarter of 2025.
Qalaa Holdings Chairman Ahmed Heikal said in an interview with Al Arabiya Business that the total initial loans were estimated at $2.35 billion and have now decreased to the level of $1.25 billion.
Heikal added that the company’s subordinated loans amount to $740 million and will be scheduled for repayment no later than 2030/31.
Qalaa Holdings, which specializes in energy and infrastructure investments, announced last September its consolidated financial results for the financial period ending on June 30, 2023.
Combined revenues reached EGP 27.7 billion during Q2 of 2023, with an annual growth of 2% thanks to the strong contribution of the ERC.
Heikal stated that the production volume of the Mostorod Refinery amounts to about 4.7 million tons of petroleum products, led by Euro 5 diesel, which conforms to the specifications of European countries.
According to Heikal, the company sells its entire production to the Egyptian General Petroleum Corporation (EGPC), except for coal and sulfur, under a purchase agreement at international prices, whereby Egyptian Refining obtains all production inputs from the Cairo Oil Refining Company (CORC), “We obtain heavy diesel and light petroleum derivatives are produced for the local market.”
Heikal stated that ERC’s dues to the EGPC amounted to about $434 million, as of November 19, and there is an improvement in payment processes, as the EGPC currently pays the full monthly bill for the fuel shipments supplied to it.
The EGPC makes payments to the ERC in dollars, and in return, the ERC also pays the value of the diesel they obtain in dollars, which allows for achieving dynamism in the level of payment of monthly payments due between the two parties.
Heikal explained that the Egyptian Refining Project saved the state about $300 million during its operation, which was spent on transportation and insurance expenses for purchasing petroleum products from abroad.
Additionally, Heikal expected the company’s revenues to reach about $3 billion by the end of 2023, based on the volume of petroleum products that the company provided to the Egyptian market, explaining that the annual profit margin is positively affected by the rise in global oil prices.
The refining profit margin in the Egyptian Refining Project averages between $2.6 million and $2.7 million per day during Q4 of 2023.
Heikal noted that ERC was able to recently increase its production capacity by about 10% to keep pace with the increase in fuel consumption in the Egyptian market, as coordination is carried out on a daily basis with the EGPC regarding the market’s fuel needs.
ERC aims to expand its plant and achieve an increase in production operations by about 10% over the next three years, with an estimated investment of $150 million.