By Mohamed Adel
Bidding for MIDOR will close in the coming week and Egypt General Petroleum Corporation (EGPC) will pay the full amount without requesting financial assistance from banks, said a senior EGPC official who wished to remain anonymous.
The official said: “MIDOR placed a condition on the contract that gives it a grace period to repay the value of the crude within two months from the date of supply”.
Last week, the Middle East Oil Refinery – MIDOR bid for the monthly purchase of 500,000 barrels of crude oil, which cost approximately $50m.
MIDOR’s refinery capacity in Alexandria stands at approximately 3bn barrels per month; heavy Iraqi Basra crude oil is ideal for MIDOR’s facilities, according to government officials.
The facility currently refines about 2m barrels per month. The Sudanese agreed to supply 600,000 barrels of crude oil from Iraq starting next June, which will be returned to Sudan once they have been refined at the end of this year. MIDOR will receive a commission for each barrel of crude oil it refines.
The crude oil will be stored in SUMED’s repositories, and infused with petroleum products taken entirely from the local market, according to official statements from MIDOR.
Officials said that the rate of production of diesel will increase to 6,000 tonnes per day compared to its current capacity of about 4,000 tonnes. The increase will take place after the arrival of Iraqi crude oil and chemicals.
MIDOR is currently conducting detailed economic studies to invest $1.18bn to raise the refining capacity to 4.6m barrels per month.
The company is currently negotiating with a number of local and international banks to finance the project, and has received offers from several banks to help finance new expansions.
An increase in refining capacity by 60% would raise the annual production capacity of diesel fuel by 50%, and thus reaching approximately 4m tonnes. It would cause a 37% increase in butane capacity, an increase of 240,000 tonnes. Likewise, high-octane gasoline would reach 1.3m tonnes, an increase of 18%, and aviation fuel would reach 1.2m tonnes, an increase of 35%.
MIDOR, located on Egypt’s shoreline along the Mediterranean Sea, is the largest and most modern of Egypt’s eight refineries. EGPC, ENPPI, and Petrojet own 98% of the company.