4 - 10 January 2001
Issue No.515
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Al-Ahram Weekly On-line 4 - 10 January 2001 Issue No.515 |
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| Published in Cairo by AL-AHRAM established in 1875 | Current issue | Previous issue | Site map | ||
Good to the last drop
In late December, Egypt exported its first shipment of polyethylene to Germany, signalling its transformation from being an importer of this essential petrochemical to becoming an exporter. This shift was the result of a policy by which some $10 billion was invested in the sector over the past 20 years.
As a result, Egypt has in recent years produced some 15 million tons of petrochemicals worth $7 billion annually. Local petrochemical production now covers domestic demand, while a sizable portion is exported. Last year the export of petrochemicals brought in $3 billion.
Also in the works are plans to export another petrochemical, namely etheylene. Like polyethylene, etheylene is produced by the Sidi Krir Company for Petrochemicals. The company plans to send some 30,000 tons of this substance abroad each year.
To counter the depletion of Egypt's oil reserves, the government is continuing its extraction of what will one day become the primary domestic fuel: natural gas. Since July, 15 new discoveries have been made of this fuel. Of these, the last four alone, which were made in September, added six trillion cubic metres of natural gas to Egypt's reserves. The discoveries of 2000 have raised Egypt's natural gas reserves to 51 trillion cubic metres.
Plans are still being formulated for a major gas export venture to several foreign partners signatory to memoranda of understanding with Egypt. These are Turkey, Spain, Bulgaria, Romania and, most recently, Lebanon.
An agreement was signed in October between the Ministry of Petroleum and Shell International under which Egypt will host one of the biggest plants for Liquefied Natural Gas (LNG) in the world. This facility will process 70,000 bpd (barrels per day) of natural gas.
The Ministry of Petroleum has also concluded successful negotiations with foreign oil companies operating in Egypt, such as BP-Amoco and Shell, by virtue of which adjustments were made to the pricing of natural gas. As a result, Egypt saved $102 million during the period from July to mid-November 2000.
Prior to this new arrangement, the price at which Egypt purchased natural gas increased dramatically due to its being pegged to the international price for oil, which had surged during the second half of 2000. "It was important to introduce this change. Fortunately, the international oil marketers were understanding. Now, the fluctuation in oil prices will have no impact on the cost of Egypt's quota of natural gas," a Ministry of Petroleum source told Al-Ahram Weekly.
In the oil sector, a number of important projects have been initiated. Some of these are expected to supplant imports with local production, while others will be directed towards export. These include the Midor Oil Refinery, whose production capacity is 200,000 tons of butane gas annually and 2.1 million tons of gasoline. Its annual production is estimated at $2.1 billion.
From each of the Hapi and Rashid gas fields in the Mediterranean, Egypt will receive some $50 million-worth of natural gas annually.
Projects are currently being undertaken to provide natural gas to homes and industrial areas in Beni Sueif, Tanta, Benha, Damietta, Giza and Ismailiya. A natural gas pipeline traversing the Sinai has also been completed. This LE1.6 billion project will convey natural gas to new industrial projects in North Sinai.
In addition, the petroleum sector is also implementing a number of projects with the aim of generating employment. The Egyptian Company for Gas Transportation (Butagas Co.) intends to employ 5,000 distributors of cylinders. Authorities hope this initiative will end the control over the gas-cylinder market by privately-owned distribution outlets. This summer, through their control over the supply of natural gas cylinders, these outlets were able to increase the price of cylinders from the government-ordained price LE3 to over LE12.
Some 5,000 jobs are also on offer by the Egyptian Company for the Maintenance of Electrical Appliances, which aims at introducing a highly qualified team of maintenance experts to repair household appliances that run on natural gas.
The third employment initiative by the petroleum sector is to recruit 10,000 people to be trained as oil-industry technicians for jobs such as drilling wells and conducting lab tests. "Such [jobs] would provide an employee with an average monthly income of LE300. The initiative [to create jobs] is a pioneering one that will be extended to include more services," said the Petroleum Ministry source.
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