Abu Qir Fertilizers announced that it is going ahead with feasibility studies to set up a USD 2.6 billion methanol factory in Ain Sokhna. The factory is expected to be constructed over a 1.6 million sq m plot of land within the Suez Canal Economic Zone (SCZone), and would be 70 % funded through loans. The project would be implemented over two phases, with the USD 1.6 billion first phase providing an ammonia and methanol capacity of 400,000 t/y and 1 million t/y, respectively.
The second phase, which will cost an estimated USD 1 billion, will add new production lines of acetic acid, MTO (methanol-to-olefins), and calcium ammonium nitrate.
Phase 1 will require total equity investment of USD 480 million, all of which would be funded through internally generated cash. While the ownership structure of the project is yet to be announced, it was previously reported that Abu Qir Fertilizers would own 25 %, while Helwan Fertilizers would own 25 %, and Al Ahli Capital 50 %. The timeline of the project is also yet to be determined, although it is expected that it will not be less than 4-5 years.
Naeem Research views a positive development in the long-term for Abu Qir Fertilizers, especially given the advantage that the factory is likely to source the natural gas feedstock at a price of less than USD 4.5/mmbtu.
Source: “Daily News Egypt”, Cairo; 7 Oct 2020
(Syed Rashid Ali, Karachi, Pakistan)