Cairo – July 2, 2024: An Egyptian consortium of some of the country’s major players in the chemicals, gas, and construction industries, plan to establish a new company aimed at importing liquefied ethane gas. The announcement comes as Egypt continues to struggle with an overwhelmed electricity grid, intensified by a gas shortage and increased power consumption due to consecutive heatwaves.
Sidi Kerir Petrochemicals (Sidpec), Egyptian Petrochemicals Holding, Egyptian Ethylene and Derivatives, Egyptian Natural Gas Company, and Gama Construction Company aim to establish the company to mitigate the impact of reduced gas supplies which have forced several factories, including fertilizers and chemicals producers, to halt operations.
According to a Sidpec disclosure on the EGX yesterday, the new company, expected to be completed within the year, will start with a capital of $663 million.
Sidpec was one of the major industrial players that has to shut down operations due to inadequate gas supplies, which continues to place stress on the local grid amid ongoing heatwaves and increased power consumption.
The new company will be structured with Sidpec holding a 25 percent stake, Egyptian Ethylene and Derivatives and Gama Construction Company holding 25 percent stakes each, while Egyptian Petrochemicals Company and Egyptian Natural Gas Company will own 15 percent and 10 percent respectively.
According to Reuters, the company’s funding will be with 40 percent sourced from shareholders and the remaining 60 percent secured through bank loans spread across multiple phases.
Egypt has been dealing with frequent power outages, exacerbated by recent consecutive heatwaves, leading to the government announcing that the country requires approximately $1.18 billion in natural gas and mazut fuel oil imports to mitigate these challenges and ensure stable electricity supply.
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