Sidi Kerir Petrochemicals Co SAE (Sidpec) plans to import U.S. shale gas through a consortium to tackle a shortage in natural gas that forced several chemical factories to shut down twice in June.
In a bourse disclosure on Monday, Sidpec announced it will hold a 25% stake in a $663 million company formed to import liquefied ethane gas from the U.S.
Sidpec is among several major companies in Egypt’s fertilizers and chemicals sector that had to halt production due to short gas supplies, which coincided with worsening blackouts.
These blackouts have plagued Egyptians since last year, primarily caused by increased summer power consumption and the gas shortage.
The consortium includes Egyptian Ethylene and Derivatives Co. (ETHYDCO) and Gama Construction Company, each holding a 25% stake.
Egyptian Petrochemicals Company (ECHEM) will have a 15% stake, and Egyptian Natural Gas Company (GASCO) will hold the remaining 10%.
About 40% of the capital, spread over three phases, will be financed by shareholders, with the other 60% coming from bank loans.
Egypt’s natural gas supplies, crucial for electricity generation, have dwindled as the country’s population and urban development have expanded, increasing electricity demand.
The situation worsens during heatwaves when air conditioning use drives up power consumption.
Prime Minister Mostafa Madbouly stated last month that Egypt needs to import approximately $1.18 billion worth of natural gas and mazut fuel oil to end persistent power cuts exacerbated by consecutive heatwaves.
Another major company, Abu Qir Fertilizers, which also halted production due to the gas shortage, announced it would partially switch to hydrogen supplies to mitigate the issue, as Energy Afrique reported last week.
