NOURAN AHMED SALAHSECTION HEAD
BUSINESS DEVELOPMENT DEPERATMENTTHE EGYPTIAN PETROCHEMCIALS HOLDING COMPANY
DPTO SESSION 17
THE EGYPTIAN PETROCEHMCIALS INDUSTRY CURRENT THREATS AND FUTURE PLANS
Content
The Egyptian petrochemicals industry
Petrochemicals production in Egypt
SWOT analysis
Lessons Learned and different country developments
Future plans
EDC, VCM, PVC plants were constructed based on imported ethylene
1986
EPC OPC
PP based on imported propylene
2001
LLDPE,HDPE, Butene Joint venture
1997
SIDPEC ECHEM
The Egyptian Petrochemicals holding company ECHEM was
established
2002
The Egyptian Petrochemicals Industry
150 150 150250
420525 565
1000
1900
LAB LLDPE PS PVC PET HDPE PP Methanol Urea
2018
50
80
165
225
LAB PVC PP HDPE
2002
Petrochemicals Production in Egypt (KTA)
Strengths Weakness
Opportunities Threats
SWOT
• Natural gas and oil reserves
Feedstock
• Local Consumption and market Damping
Product Market
• local shares and FDI
Investments
Innovation and Technology
Crude Oil Refinery Naphtha
Natural GasGas separation
unit
Ethane
Propane
Butane
Condensate
Methane
Fuel Oil
C4s
Cracker
Ethylene
Propylene
PygasBTX
Heavy AromaticsC5,C6 non aromatics
Feedstock
Feedstock
NATURAL GAS CRUDE OIL
Source BR 2017 statistical review of world energy Source U. S. Energy information administration
Dry natural gas production and consumption in Egypt Bcfd
Annual Petroleum and liquid production and
consumption in Egypt 000 bpd
Product Market
• Egypt is considered a small producer if compared to nearest neighbors • Large quantities of low priced
feedstock
• Huge production capacities
• Lower production cost and higher profitability
Source: Jadwa investments (petrochemicals and vision 2030
Investments
• However profitable its also expensive• 7 Billion USD investments producing nearly 4 Million tons
• Egypt credit Rating (Moody’s)
2011 2012 2013 2014 2015
B1 B2(Negative)
Caa1(negative)
Caa1(Stable)
Caa1(Stable)
Highly speculative Substantial risk
Innovation and Technology
• Continuous development in the production technologies
• Difficulty of getting production license for some products
• Few players in the technology field
• North America Shale gas
• China CTO
Competition in Target Markets
• Significant development in Brazil
Biotechnology
• Demand decrease
Market maturity
Competition in Target MarketsNorth America Shale Gas
• the cost of producing ethylene from naphtha crackers in the EU is 2.5x times that of ethane crackers in the US
• the capital cost of ethane cracker is lower than half that of naphtha cracker
• WE depends on US ethane imports
Cash Cost of Ethylene Production
Source: Nexant (EU-OPEC Energy Dialogue)
Competition in Target MarketsChina CTO
• Vast coal reserves
• Coal for power generation
• low quality for Methanol
production
Methanol Consumption for Olefins Production (China)
Source: Nexant (EU-OPEC Energy Dialogue)
Biotechnology
• Drivers• Increase in traditional feedstock prices
• Environmental sustainability
• Significant development in Brazil
• Limited impact so far but should be considered
• Market matures and shifts to service
• Market demand will decrease
Market Maturity
• New Capacities, special prices , different specs
Recent Gas Discoveries
• Egyptian refineries
Production Assets
• Population and wages
Labor Availability
Recent gas discoveries
Source: GCA's gas supply forecast for Egypt
Production Assets
Country Refineries Capacity 000 BBl/day
Egypt 9 730
Algeria 5 500
Nigeria 6 480
Libya 5 180
Labor
•Most populous country in the Arab world
•3rd most populous country in Africa,
•Population was 100,461,455
•availability of labor , market can absorb new production
Value creation changed
Petrochemicals Market growth vs fuel market growth
Investments
SMEs Development
Large Methane quantities
Propylene derivatives
Value Creation Changed
• Advantaged feedstock opportunity window is closing
• Two main sources was Middle East and North America
• Advantaged price gas supply in Iraq, Kazakhstan
• Prospect of Shale gas production in Argentina
Source: Jadwa investments (petrochemicals and vision 2030)Source: Mckinsey (petrochemicals 2030)
Petrochemicals market vs Fuel market
• Fuel Market expected growth <1% per year
• Petrochemicals Market expected growth 2-3 % per year
Investments
• New investments laws
• Better credit rating
2016 2017 2018
B3(Stable)
B3 (Stable)
B3 (positive)
Highly speculative
Country SMEs Development program
• Country new SMEs development plans
• Market growth
• Have our own local Market
Large Methane quantities
• However a threat but also an opportunity
• GTO to convert Gas to Methanol
• produce Olefins / Methanol Derivatives
Propylene derivatives
• Increase in ethylene production will increase the price of the propylene
• Propylene derivatives an attractive market
Plan1
• In dynamic unsteady market set short term plans beside your long term ones
Market2
• Build your own market by producing commodity products that can be utilized in SMEs
Diversify your portfolio3
• Some countries paused its projects inorder to produce specialty petrochemicals
Utilize your resources 4
• Producing olefins from coal
Provide incentives5
• Development requires incentives for investors or even licensors
Future plans
Resources
GAS
Investments
Market
Gas to methanol
IncentivesCommodity
Resources
Market
Rehabilitation for old refineries
Crude
Future plans
Integration to produce petrochemicals
Target propylene derivatives
Future plans
Resources
Capital cost
Technology
Market
Small projectsNew units in
operating plantsSpecialty
Incentives
Conclusion
• Setting short term plan
• Consider the petrochemicals dynamic market
• Diversify products portfolio
• Utilize the Egyptian resources
• Governmental support and Incentives is a must
THANK YOU
NOURAN AHMED SALAHSECTION HEAD
BUSINESS DEVELOPMENT DEPERATMENTTHE EGYPTIAN PETROCHEMCIALS HOLDING COMPANY
