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New Market Study Published: Egypt Petrochemicals Report Q2 2014

New Energy research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 02/18/2014 -- The Egyptian petrochemicals industry is beginning to make tentative steps towards expansion in spite of lingering uncertainty under the interim government. While the risks are high, the local market's potential and the plentiful domestic supply of ethane still makes it an attractive place to invest in the long term.

The Egyptian market has been disrupted in the short term by the uprisings, but the long-term outlook for the country's refining and petrochemicals sectors is positive, although delays are likely in planned projects. However, we do see a particular risk that continued uncertainty for political leadership could affect investor sentiment with regards to exploration activities. International oil companies could be deterred from entering the market as property rights may be threatened, but also because the legitimacy of a newly empowered government can be easily contested. This will upset the downstream projects that depend on increases in oil and gas supply. Finally, periodic violence is pushing companies provisionally to stop local activities. If disruption were to continue over a long period, producers could decide to stop their Egyptian projects altogether.

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Over the past quarter, BMI has revised the following forecasts:

- Carbon Holdings is making progress with its new olefins product and is planning to develop a three-line Unipol process polyethylene (PE) plant with combined capacity of 1.35mn tpa. The Tahrir Petrochemical Project at Ain Sokhna will include three PE plants, each designed with capacity of 450,000tpa. In December 2013 Carbon Holdings awarded South Korea's SK Engineering and Construction and Germany's Linde a US$3.6mn contract to build the complex, including front end engineering and design (FEED) work. Work is due to begin in H214 and be completed in 2019.
- In the Middle East and Africa Petrochemicals Risk/Reward Ratings (RRRs), Egypt has fallen from ninth to tenth place, but its score has risen 2.3 points to 44.5 points out of 100. Political uncertainties have been exacerbated by the popular uprising that overthrew the elected president Morsi and this is likely to contribute to policy paralysis over the short term, at least. However, its score has improved due to an improvement in economic structure and long-term political risk. It has been overtaken in our regional ranking by Algeria, a relatively more stable country that is due to see greater medium-term growth in capacity. It lies 3.7 points behind Algeria and 7.9 points ahead of Nigeria.

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