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Egypt refinery project on hold due to currency issues

10 May 2023

 

A $647m project to upgrade Egypt’s Alexandria Refinery has been put on hold due to issues related to the weakened Egyptian pound, according to industry sources.

The Alexandria Refinery Green Project is part of a programme of investments to improve the environmental performance of the Alexandria refinery and produce better quality diesel that meets Euro 5 standards.

The project was announced in 2021, when the European Bank for Reconstruction & Development (EBRD) said it was providing a loan of $250m for the development of the project.

Alexandria Petroleum Company (APC), a subsidiary of Egyptian General Petroleum Corporation (EGPC), is developing the project.

One source said: “The project is currently on hold due to issues related to the low value of the Egyptian pound.

“It is unknown when the project is likely to see progress in the future.”

The Egyptian pound has been one of the world’s worst-performing currencies over 2023, extending a decline against the US dollar that saw it lose more than half of its value during 2022.

Inflation in the North African country hit a five-year high in February — rising 31.9 per cent year-on-year amid soaring food prices, which the war in Ukraine has exacerbated.

One source said: “The Alexandria Refinery project has run into significant procurement issues due to the lower value of the Egyptian pound.

“The budget that was set aside for materials and equipment is no longer adequate because of the sliding value of the Egyptian currency.”

The scope of the project to upgrade the Alexandria Refinery includes:

  • Construction of a continuous emissions monitoring system
  • Construction of a wastewater treatment plant
  • Construction of a vapour recovery unit
  • Construction of a sulphur recovery unit
  • Construction of a sour water stripper
  • Construction of an amine regeneration unit
  • Construction of a cooling water tower
  • Installation of combustion air preheaters
  • Installation of an energy management system
  • Installation of burner management system for existing heaters
  • Installation of an off-gas compressor system
  • Installation of an HP boiler
  • Installation of a turbine
  • Installation of a deaerator
  • Installation of a makeup water treatment system
  • Installation of a diesel hydro-treatment system
  • Installation of a pressure swing absorption system
  • Installation of associated facilities

It is expected that a range of early-stage infrastructure projects in Egypt will likely see delays due to the collapse in the value of the Egyptian pound.

Projects that are in their later stages are likely to experience less disruption.

Earlier this week, MEED reported that the ongoing project to expand and upgrade Egypt’s Middle East Oil Refinery (Midor) facility is expected to be completed and commissioned before the end of the year.

The project has an investment value of $2.4bn, according to the country’s Petroleum & Mineral Resources Ministry, and is expected to increase the refinery’s capacity by 60 per cent.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10832024/main5420.jpg
Wil Crisp

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