Minister of Petroleum reviews progress at Suez Methanol Derivatives plant in Damietta

Daily News Egypt
4 Min Read

Tarek El Molla, Minister of Petroleum and Mineral Resources, recently reviewed the ongoing construction of the Suez Methanol Derivatives Company’s facility. Situated within the Egyptian Petrochemicals Holding Company (ECHEM) in Damietta Port, the plant spans 100,000 sqm and is backed by a $120m investment. The company has secured full capitalization for the project, ensuring the investment cost is completely covered.

El Molla highlighted the project’s significance in enhancing the Egyptian petrochemical sector as part of the strategic plan extending to 2040. He noted that the output, catering to various plastic and construction industries, is set to fulfil a substantial share of domestic market needs amidst the country’s extensive development initiatives.

Hisham Selim, chairperson of the Suez Methanol Derivatives Company, during an on-site presentation, aligned the methanol derivatives project with the goals of the national petrochemicals strategy, marking a step towards establishing specialized petrochemical entities.

Ownership of the project is distributed among several stakeholders: Egyptian Petrochemicals Holding Company (46%), National Investment Bank (26%), Misr Insurance (6%), Misr Life Insurance (4%), National Bank of Egypt (3%), Nasser Social Bank (3%), and public investors (12%).

The facility aims to produce formaldehyde derivatives, utilizing resources such as 45,000 tons of methanol from Methanex Egypt, 48,000 tonnes of urea from MOPCO, caustic soda from the Egyptian Petrochemicals Company, locally produced sulfuric acid, and imported naphthalene. This production will not only serve local needs but also have the export potential.

With an annual production capacity of 140,000 tonnes, the factory will produce:

  • 21,000 tonnes of 85% concentration liquid urea formaldehyde, an anti-caking agent for urea fertilizers.
  • 66,000 tonnes of liquid urea-formaldehyde resins, used in the furniture, plywood, and MDF industries.
  • 53,000 tonnes of sulfonated naphthalene formaldehyde, enhancing ready-mixed concrete properties.

Additionally, the project could yield up to 42,000 tonnes of specialized urea-formaldehyde resins annually, suitable for thermal insulation and rock wool manufacturing, as well as high-strength adhesives for MDF panels.

Despite economic fluctuations and significant raw material cost increases since 2020, the company achieved EGP 650m in savings in 2023, keeping the project’s total investment at $120m.

The primary contractor, Egyptian Maintenance Company (San Masr), leads an alliance including Wadi El Nile Contracting Company. Johnson Matthey, a leading formaldehyde technology provider, is contracted for technology, engineering designs, and equipment supply for the formaldehyde and urea formaldehyde units. San Misr Company has also engaged local firms for additional engineering designs.

The manufacturing of the 85% concentration formaldehyde and urea formaldehyde unit was completed two months ahead of schedule, constituting about 30% of the total project equipment and forming the cornerstone of the production units. These components have arrived at Damietta for installation.

Most equipment orders are placed, with tank manufacturing underway at San Masr’s Suez workshops, ECHEM’s Alexandria workshops, and various private sector facilities. Large tank construction has begun on-site.

In collaboration with the Damietta Port Authority, all necessary operational infrastructure for the factory has been established, yielding time and cost efficiencies during construction.

This project exemplifies the collaborative model among petrochemical firms (ECHEM, Abu Qir Fertilizers, Wood Technology and Bioethanol, MOPCO, Methanex Egypt), with Inpex consulting and San Misr spearheading the contractor alliance, supported by Petrojet’s local manufacturing capabilities.

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