Qalaa Holdings has revealed that, it is self-assured that its new refinery will reduce Egypt's reliance on oil product imports, mostly as a weaker currency and rising crude prices has forced the government to cut its energy bills.

The new refinery, Egyptian Refining Co (ERC), will be able to produce 4.2 million tonnes of refined products yearly, which will be sold to Egyptian General Petroleum Corporation (EGPC) at international prices under a 25-year deal.The Egyptian investment firm holds a 19% interest in ERC, which is estimated to come on stream in the Q1 of 2017.

The country has turned from a net energy exporter to an importer due to the declining domestic production and expensive subsidies. Egypt plans to put an end to gasoline and possibly gas-oil imports by 2019.

According to Qalaa’s chairman, Ahmed Heikal (photo), the country is grappling with shortage of hard currency and ERC will be open to EGPC's dollar deficiencies. However, there were provisions in the contract that would permit a rolling letter of credit for oil products that covers three months.ERC is to transform 3.5 million tonnes of heavy remains from the refining process at the nearby CORC plant to higher-value products like diesel and gasoline. ERC will in addition import 10 million BO a year, from Saudi Arabia's Arab Medium.

Eni made a significant natural gas discovery at the offshore Zohr field in August 2015 that is expected to begin operation in 2018, making Egypt independent in natural gas by 2020.

By that time, ERC would be able to advance any extra fuel oil to higher-quality refined products, Jakarta Globe reports.

Anita Fatunji