Cairo is developing plans for two refineries that could increase the country's refining capacity by almost 50 percent, said industry sources. Both refineries will be at Ain Sokhna, on the Gulf of Suez, with one producing for the domestic market and a second aimed at the export market. However, while rising local demand is likely to provide a market for the domestic facility, there are doubts that an export refinery on the Red Sea coast can successfully compete for a share of the international market. The planned 140,000-barrel-a-day (b/d) domestic facility, being developed by a joint venture between an Egyptian firm and a major Kuwaiti company, will produce diesel for the local road transport market. Local private equity company Citadel Capital is already developing a domestic refinery that will produce 50,000 b/d of diesel when it comes on stream in 2011. But strong domestic demand is expected to support both facilities. “There is still going to be a local deficit despite the Citadel scheme,” said one downstream oil analyst. “Diesel demand is growing in the order of 5 percent a year.” Crude feedstock for the refinery will come from the local market, while state oil company Egyptian Petroleum Corporation (EGPC) will purchase the refined product at international market prices. __
