Cairo – Mubasher: Egypt is on track to turn to a key energy exporter in the region and beyond as its gas production has reached its highest from numerous finds in the North African country.
Egypt is a “very important player” in the oil and gas sectors, chairman of Qalaa Holdings Ahmed Heikal told CNBC's "Capital Connection" on Monday.
"Gas discoveries and infrastructure, as far as the LNG (liquefied natural gas) terminals in Idku and Damietta, those two have meant that Egypt is ready to perform a very important role as a hub for energy, especially gas exports," Heikal said.
The Egyptian investment firm Qalaa Holdings has been developing a $4.2 billion greenfield refinery in greater Cairo in collaboration with its subsidiary, the Egyptian Refining Company (ERC).
The greenfield refinery will have a capacity of 4.2 million tonnes and will produce up to 3 million tonnes of Euro V diesel and jet fuel, which will enable Egypt to diminish its diesel imports by 50%, Qalaa noted on its official website.
Heikal remarked that the refinery is proceeding at a fast pace as the motors, the insulation and painting have been tested and the entire construction of the project will be completed by August.
He also added that hydrocarbon will be introduced into the refinery by early November, pointing out that the project was “a very big endeavour for a private sector company to undertake."
The fresh refinery is projected to operate at a time when oil prices surge as Russia and OPEC hold back supplies to hike prices, according to CNBC.
Volatile oil prices have been negatively impacting the Egyptian economy, Heikal said, noting that Egypt is not a member of OPEC, despite being one of the few oil producers in the Middle East, as it is still an oil net importer.
"Higher oil and gas prices are not good for the Egyptian economy. Egypt is still short oil and gas because even after Zohr we will have to buy our gas from the foreign partner Eni, in this case, and BP, so that will again mean that Egypt is short oil and gas and this puts pressure on both the trade and budget deficit," he said.
Regarding reforms led by Egyptian President Abdel Fattah El-Sisi, the Egyptian businessman praised the reforms as fuel subsidies were partially cut to remodel the economy.
"The government has been extremely diligent with following through on those reform programs and something to be commended. This is not a very popular move but it's a very important move and the government should be commended for following it through despite its unpopularity," he said.
Egypt is targeting EGP 10 billion in investments in the petroleum sector in the coming fiscal year 2018/2019, Egyptian petroleum minister Tarek El-Molla told Reuters.
Foreign investments in the oil sector are expected to stand at around $10 billion for the current fiscal year, marking a 25% increase from the previous year, El-Molla said.
El-Molla attributed the increase in FY17/18 foreign investments to the thriving investments in major gas exploration projects in the Mediterranean water, according to Reuters.
