Egypt and South Korea to increase oil and gas cooperation

Jun 21, 2007 02:00 AM

Egypt is working on a comprehensive plan to develop the oil, gas and petrochemical industries, as they are increasingly becoming the backbone of economic and social growth in Egypt.
In its efforts to achieve this goal, the government of Egypt established several contacts with major Korean companies, aiming at explaining the business and investment opportunities in these fields, announced Egyptian Embassy in Seoul recently.

According to the embassy, Egyptian oil and natural gas output hit 58.5 mm tons in 2004. Oil refinery capacity in Egypt stood at 35 mm tons while exports reached 18.6 mm tons at $ 4.5 bn during the same fiscal year.
Egypt has built two LNG projects, and it wants to extend existing pipelines. Egypt has also sped up the bidding process with such a progressive plan in place for natural gas export and the industry is set to break all growth records.

Egypt is exporting LNG to Spain and will start exporting to France during the next half this year, there are many potentials for more cooperation with Korean companies, explained Amr Helmy, ambassador of Egypt in Seoul.
"We have already some projects in the fields of oil, gas and petrochemicals in cooperation with Korean companies, our intention is to expend this cooperation," Helmy added.

Egypt's reserves of natural gas have risen to 66 tcf, almost double the reserves recorded in 1999. Since the early 1990s, natural gas has been the main source of energy for a number of industries in the country, including cement, iron and steel. The Egyptian Petrochemical Holding Company (ECHEM) has put into effect a 20-year, three-phase plan to develop the petrochemical industry that aims at making use of Egypt's extensive natural gas reserves which will serve as the cornerstone of the emerging industry, the ambassador said.
Egypt's petrochemical industry currently generates $ 7 bn in annual revenues, according to the Ministry of Petroleum's statistics. Under the ambitious plan $ 10 bn worth of investment will be pumped into 14 new petrochemical complexes in Egypt over the next two decades, creating an estimated 100,000 new jobs in the sector by 2020.

A $ 500 mm methanol plant, with a capacity to produce 1.3 mm tons annually, and a $ 700 mm urea/ammonia plant capable of producing 3,500 tons daily are currently planned in the concession area which also houses the recently completed SEGAS plant for liquefied natural gas (LNG), a joint Spanish-Egyptian project budgeted at $ 1.3 bn.
According to the latest figures released by the Ministry of Petroleum, Egypt's proven natural gas reserves have reached 66 tcf. Petroleum and natural gas now account for 8 % of GDP and 40 % of Egypt's exports. But this could well be the tip of the iceberg.

According to Sameh Fahmi, minister of petroleum, gas exports alone have the potential to generate $ 2 bn annually.
Total exports of Egyptian oil and petrochemicals to South Korea exceeded $ 280 mm in 2004.

Source: The Seoul Times Company
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