Evaluating risks and diversifying economies

Egypt produces approximately 680 000 bpd of crude, most of which is slated to be converted to fuels in its dozen domestic refineries. Several billion dollars are being spent upgrading various complexes, including a US$2 billion project to add a hydrocracker to Egyptian General Petroleum Corp.’s Assiut refinery. At the southern end of the Suez Canal, Red Sea Refining and Petrochemicals is building the Tahir refinery and petrochemicals plant in the port of Ain Sokhana. When completed later in the decade, it will have the capacities of 1.5 million tpy of ethylene and 600 000 tpy of propylene.

In May 2023, Suez Methanol Derivatives Co. (SMD) signed an agreement with Methanex Egypt to supply feedstock for its specialty-chemicals complex in the port of Damietta. The US$120 million complex is the first of its kind in Egypt, and will produce 140 000 tpy of urea formaldehyde concentrate, naphthalene formaldehyde and specialty resins for domestic and export markets. Construction is currently underway, with first product deliveries expected in October 2024.

Algeria’s oil and gas sector is in an enviable position. It ships approximately 45 billion m3 of natural gas annually through Mediterranean subsea pipelines and LNG tankers to Europe. In addition, it produces 1.3 million bpd of light, sweet crude, the majority of which is exported.

In an effort to satisfy growing domestic demand, state-owned Sonatrach has launched an ambitious plan to expand the 670 000 bpd capacity of its domestic refineries. The Hassi Messaoud refinery, adjacent to its largest oilfield, is being enlarged from 23 000 bpd to 110 000 bpd capacity. It also plans to eventually expand and upgrade its Bishkra, Tiaret and Skikda refineries to similar capacities. But recent reports note that Sonatrach is at loggerheads with Samsung and Técnicas Reunidas (Hassi Messaoud’s EPC contractors) over costs associated with the US$3.7 billion expansion; negotiating a financial resolution may delay final investment decisions (FIDs) on the three latter refinery projects.

In December 2022, Saudi Aramco and TotalEnergies announced a joint plan to build a US$11 billion petrochemical facility in the Saudi port of Jubail adjacent to the existing SATORP refinery. The new complex will contain one of the largest mixed-load steam crackers in the Middle East, with a capacity to produce approximately 1.6 million tpy of ethylene and other gases. The feedstock is expected to underpin a further US$4 billion investment in related industrial sectors, including the manufacture of carbon fibres, lubricants, detergents, automotive parts and food additives. In June 2023, it was announced that Hyundai Engineering would build the mixed-feed crackers, Maire Tecnimont would construct two polyethylene units, and Sinopec Engineering would fabricate the tank farm. Tentative completion is set for 2027.

Qatar continues to pursue its goal to be the world’s leading LNG exporter. In October 2023, it broke ground on the world’s largest LNG project, the North Field Expansion (NPE). When completed later in the decade, it will boost the country’s current capacity of 77 million tpy by a further 48 million tpy. That same month, it signed long-term deals with Shell to supply up to 3.5 million tpy of LNG for deliveries to the Netherlands, starting in 2026 when the first phase of its major expansion comes online. The news comes on the heels of a similar announcement between QatarEnergy and TotalEnergies to supply up to 3.5 million tpy to France. All deals are set at 27 years in duration.

In late 2023, QatarEnergy and Chevron Phillips Chemical Co. secured US$4.4 billion in financing for a US$6 billion polymers facility in Qatar’s Ras Laffan Industrial City. The project will include the largest ethane cracker in the Middle East, with a capacity of 2.1 million tpy, as well as two, high-density polyethylene units with a total capacity of 1.7 million tpy. When completed in 2026, most of the output will be exported for use in durable goods such as gas and water distribution pipes.

This article was originally published in the April 2024 issue of Hydrocarbon Engineering magazine. To read the full article, sign in or register for a free subscription.

Written by Gord Cope, Contributing Editor

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/19042024/evaluating-risks-and-diversifying-economies/