Japanese and South Korean firms have won a $1.8 billion contract to build a diesel oil refinery in Egypt to respond to rising car demand in the emerging economy, said the Japanese company.
Japanese trading house Mitsui and Co. said it and South Korean construction firm GS Engineering & Construction Corp. will build the plant on the outskirts of Cairo.
They will build the plant on behalf of the Egyptian Refining Company, which is 85 percent owned by Egyptian investment fund Citadel Capital and the remaining by a state-run oil company.
“With the prevalence of private cars due to [Egypt’s] economic growth, there is a serious problem of a lack of diesel fuel,” Mitsui said in a statement.
The Middle East’s most populous country has clocked stable economic growth growing at around six percent a year.
The plant “will use the residue oil produced from an existing refinery and refine it into diesel fuel for domestic consumers,” the statement said.
The plant is expected to begin operation in mid-2011 and will produce 1.5 million tons of diesel per year, although it has capacity to produce up to 2.5 million, Mitsui said.
Mitsui, which has interests worldwide, said it was the largest order it has received in the Middle East.