French energy company Total is on the verge of signing a contract with the Egyptian Petrochemicals Holding Company to establish a US$3 billion plant for the production of olefins by steam cracking of natural gas, said a Petroleum Ministry official.

The plant is planned to be established in the industrial zone in the North West of the Gulf of Suez, and will include a methanol-to-propylene processing unit.

On the sidelines of the World Petroleum Council Conference being held in Doha, Qatar, the official said the deal would help attract more international investments and that it will enhance Egypt's quota of polyolefins in both regional and global markets.

The expected production capacity of the plant will reach an annual 470,000 tons of polypropylene, 185,000 tons of gasoline, 40,000 tons of LPG, and 530,000 tons of acetic acetic. The plant will be established over a three-year period, to begin production by late 2014.

In related news, Qatar's state oil company Qatar International will contribute US$200 million to the Egyptian Refining Company located in Shoubra al-Khaima. The company will cost a total of US$3.7 billion.

According to a senior official in the Petroleum Ministry, intensive negotiations are underway between officials from the Egyptian Refining Company and others from the Petroleum Authority to discuss the final details of the deal, which aims to build the newest and largest refineries in Egypt and North Africa.

Source: Al-Masry Al-Youm