Cairo: Diversified conglomerate, the Essar Group, has expressed its interest to set up an oil refinery in northern Egypt at an estimated cost of about $3.4 billion and talks are on to conduct a feasibility study soon, a senior Egyptian minister has said.
“The company (Essar) has shown its interest in this regard (setting up an oil refinery in northern Egypt). Our ministry has met with their officials here. We are negotiating on certain points and talks are on. However, we haven’t reached a conclusion so far,” Egypt’s minister of trade and industry, Rachid Mohamed Rachid, said while addressing a media round-table here.
The Egyptian government had recently announced that the Shashi Ruia-led Essar Group plans to set up an oil refinery in north Egypt, that would have a daily production of around 300 thousand barrels per day.
According to the government officials such a project would usually cost around $3.4-billion.
However, when contacted, Essar officials declined to divulge any details of the project.
“We have operations in all sectors, including oil and gas -upstream and downstream. As a group, we continue to look at synergistic growth and investment opportunities in these sectors in India and other emerging and growing economies. However, it is too early to comment on any specific project,” the company told PTI via e-mail.
Meanwhile, according to Egypt’s investment body General Authority for Investment (GAFI), several Indian companies such as Essar, Mukesh Ambani-led Reliance Industries and Indian public sector unit Gas Authority of India Ltd (GAIL) have major investment plans in the oil and gas sector in Egypt.
While the Reliance group had in 2007 announced an $10-billion investment in the oil refining and petrochemicals and plastic industries, it has not initiated any project yet.
GAIL, which already operates in Egypt through a joint venture with Egypt Kuwait Holding company National Gas Company (NATGAS), has also announced an $6-million investment in gas distribution ventures in Fayoum and Cairo. NATGAS is the largest private local distribution company (LDC) for natural gas in Egypt.
The Indian investments, if they materialise, would not only boost economic and trade ties between both the countries but also help India become the largest player in the refinery sector and cater to the burgeoning local demand in Egypt as also the demand emanating from Gulf Co-operation Council (GCC) countries, according to GAFI.