Hoda Ragab Omran

Business Development Senior Engineer

Egyptian Petrochemicals Holding Company

Hoda-ragab@Echem-eg.com

Downstream: Refining, Petrochemicals and Fertilizers Technology and

Operations (DRPFTO)

SESSION No.13

ABSTRACT No.454

“Effect of Natural Gas New Discoveries (Zohr) on the Development of

Egyptian Petrochemicals Industry”

WHO WILL BE THE WINNER ?!

Petrochemicals vs Energy

Petrochemicals vs. Energy

Match (5 min)

Energy Sector 1st AttackPetrochemical Industry

Self-defense.

Round I Round II

Natural Gas Consumption (2015)

Sector N.G Price

USD/MMBTU

Electricity 3

Domestic 0.5

Industry

Petrochemical 4

Iron and Steel 7

Petroleum 5

Cement 8

Others 5

Natural Gas Pricing per Sector (2015)

Round I: Energy Sector 1st Attack

Round I Result (1/0)

Strategic Product

Round II: Petrochemicals Self Defense

Kick 2

Significant and Direct Impact

on the National Income.

Kick 4

Solving the unemployment Problem, Reducing Crime Rate

and Serving the Society.

Kick 3

Increasing National GDP.

Kick 1

Saving Foreign Currency and

Reducing local Imports

Egyptian Imports from China Value (MMUSD)

2014/2015

Total 9000 (40% Increase)

Textiles 813

Mobiles 515

Sent and Receive Devices 469

Yarn 456

Automotive 272

Spare Parts 118

Wooden Products 124

Household Appliances 185

Shoes 100

Electric Generators 65

Toys 49

Electric Wires 27

Kick 1: Reducing Local Imports and Saving

Foreign Currency

Local Imports from China 2014/2015

Kick 1: Reducing Local Imports and Saving

Foreign Currency

Natural

Gas

Derivatives

Crude Oil

Derivatives

Intermediate Polymers/ ChemicalsPackaging

Construction

Automotive

Textiles

Electrical

Electronics

Kick 2: Significant and Direct Impact on

the National Income

Local Source of Income Egyptian Budget 2016/2017

PE Contribution in Local Income (2015 )

Item Value

Production Capacity 225 KTA

Annual Income Tax Million EGP 500

Income Tax per Ton of

Product

EGP 2,222

Percentage Share in Local

Tax Income

0.12 %

Total Exports MMUSD 120

Kick 3: Increasing National GDP

Gross Domestic Product (GDP)

• Monetary measure of the

market value of all final

goods and services produced.

• Determine the economic

performance of a whole

country or region.

Egyptian GDP Components

Egyptian GDP (2015): Billion USD 330.779

Industrial Share: 37%

2.37

7.01 7.15

4.69

5.14

1.822.19 2.11 2.23

4.204.50

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2002 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

% Growth of GDP

Echem

Mopco I

ELAB

Emethanex

EPP

Estyrenics EIPET

Mopco II

Ethydco

Urea: 600

Ammonia: 50

LAB: 100 Methanol: 1300

PP: 400

PS: 200 PET: 400 Urea: 1380

Ammonia: 100

PE: 400

Butadiene: 20

Capacity: KTA

Kick 3: Increasing National GDP

Kick 4: Solving the Unemployment Problem,

Reducing Crime Rate and Serving the Society

Development: 300

Construction: 3000

Operation: 1000

Polyethylene Plant (225KTA)

PE

225 KTA

Transportation: 500

Small and Medium Industry

Job Opportunities for PE Plant (Total Number of labor: 10000)

Manufacturing: 3000

Trading: 3000

Round II Result

Match Commentator

The Winner: Petrochemical Industry

Result: 4/1

Conclusion: Petrochemical Industry

Deserves the Higher Amounts of Natural

Gas Resource.

Zohr and Petrochemical Industry

Zohr and

Petrochemical

Industry Future

Zohr N.G to

Petrochemicals

Zohr Discovery

Item Value

Location Mediterranean Sea

Concession Area Shorouk

Capacity (Trillion ft3/d) 30

1st Year of Production Q4 2017

Production Capacity

(2017) (billion ft3/d)

1

Nature of Gas Lean

Zohr and Petrochemical Industry Future

Zohr N.G

Existing Companies (Mopco -

Emethanex)

Methanol and Derivatives Project

MTP Project

Acetyls Complex

Engineering Plastics Project

Fertilizer Project

Zohr N.G to Specialty Petrochemicals

Why Special Petrochemicals?

High Volume

Low Price (USD1.5-2 /Kg)

Lower Profitability

High Competition

Lower Volume

Higher Price

Higher Profitability

Lower Competition

Price Stability against Crude Oil Price

Depression.

Volume according to Application

Highest Price

Highest Profitability

No Competition

Project Phase I Feasibility in Detail

N.G

830 KTA

130 MMSCFD

Methanol

1300 KTA

Polyacetal

50 KTA

PBT

60 KTA

1,4 Butanediol

44 KTA

1400 KTA

Methanol

Production

Unit

50 KTA

Polyacetal

Production

Unit

60 KTA

PBT

Production

Unit

75 KTA

Butanediol

Production

Unit

31 KTA

60 KTA

Formaldehyde

37%

Production Unit

100

KTA

Polyacetal (POM) and PBT Applications

Trade Balance (tons)

Polyacetal Resins (POM) Regional Net Trade Annual Growth Rate in Demand 6%

PBT Global ConsumptionAnnual Growth Rate in Demand 6%

Global PBT Consumption by Region in 2012 (Total:830

KTA)

Expected Global PBT Consumption by Region in 2025

(Total:1,650 KTA)

Project Financial Indicators

Economic Indicators

TIC MMUSD 1960

Feedstock Price at 1st Year of

Production

USD 6 /MMBTU

Project IRR 16%

Equity IRR 18%

Project NPV MMUSD 649

Equity NPV MMUSD 799

PBP 8

Share in National Income (Taxes) MMUSD 6,952

Total Exports (50% of Production) MMUSD 12,665

Note: Integration shall reduce the project TIC to be lower than MMUSD 1960 by 10-20% so

project IRR shall be enhanced to be about 18%.

Conclusions

• Petrochemical Industry has a Direct Impact on the

National Economy.

• Petrochemical Industry is the Solution to Increase the

National Income and Local GDP.

• New Natural Gas and Crude Oil Discoveries will Facilitate

Future Development of Egyptian Petrochemical Industry.

• Petrochemical Industry Deserves the Higher Amounts of

Natural Gas Resource.

THANK YOU

Hoda Ragab Mohamed Omran

Business Development Senior Engineer

Egyptian Petrochemicals Holding CompanyHoda-ragab@Echem-eg.com