EGYPT – Egypt has signed a contract for the construction of a US$2.5 billion hydrocracking complex in Assiut to refine mazut, a low-value product, and transform it into petroleum products of a higher value.

According to Egypt Independent, the contract for largest oil refining project to be implemented in Upper Egypt was signed in the presence of Petroleum and Mineral Resources Minister Tarek al-Mulla.

The project which will be executed by Enppi and Italy’s Techinp Fmc Engineering hopes to maximize the utilization of state resources by taking advantage of the latest hydrocracking technology to refine mazut into diesel of European specifications.

The complex in Assiut which will be managed by Assiut National Oil Processing Company (ANOPC)  aims for a production capacity of 2.8 million tons annually.

The facility will also produce butane and naphtha used in the production of high-octane gasoline.

The project aims to contribute to cover the needs of Upper Egypt in terms of petroleum products, which the project’s organizers say should reduce the volume of petroleum imports to the country.

The Assuit oil project comes after the Egyptian Petrochemicals Holding Company (ECHEM) and the Bechtel Group signed a US$6.7 billion agreement to construct a refining and petrochemical complex within the Suez Canal Economic Zone.

Egypt’s Saad Eldin Petroleum Gases Company has also begun implementing the first phase of a government plan to transfer natural gas across the country using tankers.

The tanker project, according to the Egyptian government, give remote areas not on the national pipeline network access to gas.

A total of LE150 million (about US$9.62 million) has been invested so far in the project, which hopes to decrease reliance on traditional gas lines and aims to cover about 85 percent of the country,

The step to decrease reliance on pipelines comes at a time when the government is planning to transform Egypt into a regional hub for natural gas in the Middle East.

The country has also discovered vast amounts of natural gas especially in the Mediterranean.