BARCELONA (ICIS)--Engineering and construction is expected to begin in early 2019 at the $10.9bn Tahrir Petrochemicals Corporation (TPC) world-scale cracker and petrochemicals complex in Egypt as the company completes financing arrangements, the CEO at TPC’s majority shareholder said on Thursday.
Basil El-Baz, CEO at Carbon Holdings, which holds a 51% stake in TPC, said with debt and equity arrangements close to completion for the complex, notices to proceed are timetabled to be sent to engineering, procurement and construction (EPC) contractors in December.
The company expects 48 months to the end of pre-commissioning and an overall schedule of 55 months to mechanical completion, El-Baz added.
The cracker will consume 4m tonnes/year of naphtha to produce 1.35m tonnes/year of ethylene converted into 1.35m tonnes/year of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE).
Product sales will be targeted at domestic and export markets.
The CEO said Egypt – with 100m population – desperately needs more raw materials to stimulate downstream domestic manufacturing.
“The simple fact is that manufacturing in Egypt is minuscule. We import the most basic plumbing materials for construction and packaging,” he said.
El-Baz pointed out that in Egypt total PE production is 650,000 tonnes/year, adding: “This is completely ridiculous – for a 100m population our production should be a minimum of 4m tonnes/year range. PP production is around 550-600,000 tonnes/year but should be near the PE figure.”
The CEO singled out Africa as a promising export market.
“We call Africa the ‘X Factor’ as the numbers are mind-boggling. With just 1-2% [demand growth] we would need a second or even a third petrochemicals complex.”
The broader product slate of a naphtha cracker would be extremely interesting to the manufacturing sector, “the ability to get into the rubbers and nylons” and not just the PE and PP derivatives, he added.
NAPHTHA SUPPLY CONTRACT IN PLACE
A long-term supply contract has been signed with AOT Energy to supply the 4m tonnes/year of naphtha for the plant.
El-Baz said the contract was needed to satisfy the lenders for the project but that he hoped to source some naphtha domestically in the longer-term.
“Egypt exports naphtha and it would make sense – the highest netback the Egyptian government could achieve is selling to me,” he said.
“We have a vessel filled with naphtha going in front of our site every day and the naphtha market is so deep globally that you could make a very serious case to do a project like this with no feedstock agreement.”
The project will be financed through a $5.4bn debt package plus equity contributions.
Carbon Holdings will hold a 51% stake in TPC and Egyptian General Petroleum Corp will hold a 24% stake.
Development finance institutions such as Africa Finance Corp, Africa Development Bank, and the European Bank for Reconstruction and Development are expected to take the remaining 26%.
The CEO said plans for an initial public offering (IPO) for Carbon Holdings are well-advanced.
“Carbon Holdings has a very exciting road ahead. We are well on our way to financial close and I look forward to drawing down and issuing notices to proceed soon,” said El-Baz.
“You will start to hear soon about our IPO plans which will come hand-in-hand with our notices to proceed.”
Pictures source: Carbon Holdings, TPC
Interview article by Will Beacham