A source has told Daily news Egypt that the Sidi Kerir Petrochemicals Company (SIDPEC) is looking to finalise the contractor for its propylene plant by the end of March 2021.
The source said that the move comes as the previous offer had exceeded the budget. They added that decisions with regards to future capital requirements, including the need for a capital increase, would only be known upon finalisation of a contractor for the propylene plant.
This is unless management also finds a buyer for the licence, or decides the complete abandonment of the project. Assuming the latter takes place, this would mean that the Red Sea National Company for Refining and Petrochemicals (RSNCRP) would be equipped to import or source propylene on its own.
SIDPEC has postponed the licence transfer decision of polypropylene, but with no clarity about the propylene project’s future. The company announced the postponement of its decision to transfer the polypropylene licence to RSNCRP.
An OGM will be held on 13 March 2021 to discuss the same. In exchange for the transfer of the licence, SIDPEC would have a 5% equity stake in the new company.
Naeem Research sees that the future of the propylene project remains to be seen, as propylene gas is the main feed required to produce polypropylene. This part represents a substantial portion of the initially mentioned total investment cost of $1.2-1.4bn (inclusive of both Propylene and Polypropylene). SIDPEC is still willing to retain the licence for the propylene production line.