Register for MEED's guest programme 

The $2bn hydrocracking complex package that forms part of Egypt’s Assuit oil refinery upgrade project is expected to avoid the budget problems plaguing many other infrastructure projects in the country, according to industry sources.

“Work is continuing to progress well,” said one source. “There are no budget problems expected due to the financing for this project coming from outside the country.”

A $1.5bn financing package backed by the Italian state credit guarantee agency Sace was finalised in late December last year.

Six international banks provided financing for the project.

These were:

• Cassa Depositi e Prestiti (Italy)
• Credit Agricole (France)
• Banque Unicredit (Italy)
• HSBC (London)
• BNP Paribas (France)
• Societe Generale (France)

The National Bank of Egypt and National Bank of Kuwait are acting as financial advisers for the project.

Credit Agricole is the general coordinator of financing, and HSBC is acting as the general agent for the facilities.

Many projects in Egypt’s oil and gas sector this year have been disrupted by currency issues due to the declining value of the Egyptian pound.

Most of the projects that the currency issues have significantly impacted have been in their early stages, with the problems related to the procurement of materials and equipment.

Assiut Oil Refining Company (Asorc), a subsidiary of state-owned Egyptian General Petroleum Corporation (EGPC), is the project operator for the $2bn scheme.

France’s Technip Energies is the main contractor performing engineering, procurement and construction (EPC) works on the Assiut hydrocracking complex, as part of a $2bn contract Asorc awarded it in February 2020.

In April 2021, Switzerland-based Burckhardt Compression announced being selected by Technip Energies as the gas compressor supplier for the hydrocracker package.

Asorc held a kick-off meeting for the project in September 2020.

Egyptian contractors Enppi and Petrojet are supporting Technip Energies on the project. Enppi has undertaken the engineering work, while Petrojet is carrying out construction work.

In 2021, contractors completed the construction of a $450m high-octane gasoline complex in the Assiut governorate as part of the broader $3.8bn Assuit oil refinery upgrade project.

The Assiut hydrocracking complex will be one of Egypt’s major strategic refineries and will help meet growing local demand for cleaner products.

The project will also become the largest oil refining facility to be implemented in Upper Egypt so far.

Once completed, the project will transform lower-value petroleum by-products, such as mazut, into cleaner, higher-value products.

It is expected to have an output of about 2.8 million tonnes a year of Euro-5 diesel, in addition to other petroleum products.