Sidpec, one of Egypt’s leading petrochemical firms, plans to import US shale gas in partnership with a consortium to tackle a severe natural gas shortage. This shortage led to repeated shutdowns of chemical factories in June, exacerbated by electricity blackouts due to increased summer demand and gas scarcity.
According to a disclosure to the bourse on Monday, Sidpec will hold a 25% stake in a new $663 million company formed this year by the consortium. The initiative aims to import liquefied ethane gas from US shale reserves.
The consortium includes Egyptian Ethylene and Derivatives Co. (ETHYDCO) and Gama Construction Company, each with a 25% stake. Egyptian Petrochemicals Company (ECHEM) holds a 15% stake, while Egyptian Natural Gas Company (GASCO) holds the remaining 10%.
Funding for the project, which will be rolled out in three phases, involves 40% equity from shareholders and 60% from bank loans.
The shortage of natural gas, crucial for Egypt’s electricity generation, has worsened amid growing urbanization and population expansion, which spike electricity demand during heatwaves.
To combat persistent power cuts, exacerbated by extreme weather, Egypt’s Prime Minister Mostafa Madbouly recently announced plans to import approximately $1.18 billion worth of natural gas and mazut fuel oil.
In response to the crisis, Abu Qir Fertilizers, another major Egyptian firm affected by the gas shortage, announced plans to partially shift to hydrogen supplies.