A joint venture (JV) consisting of Chinese and Egyptian companies has signed an agreement for the preliminary design of the first phase of the Red Sea petrochemicals complex project, set to be constructed at Ain Sokhna in the Gulf of Suez.

The deal was agreed between China National Chemical Engineering Co. Ltd. (CNCEC), Petrojet, and the Red Sea National Petrochemicals Co., with Egypt’s prime minister, Mostafa Madbouly and minister of petroleum and mineral resources Karim Badawi, present during the occasion.

Located only 10 kilometres from Ain Sokhna’s port, the new complex has been designed to produce a wide range of petrochemical products with the use of a modern oil refinery and multiple steam cracking units – which will allow the facility to produce ethylene and propylene.

Currently, an accurate accounting of the costs of the project remains to be determined, although the completion of the design phase will allow for a pinpointed price before the project moves forward with securing the required financing. According to a statement from Egypt’s oil ministry released April 17, construction is slated to begin in 2026, with production set to start soon afterwards – Once the necessary financing has been approved.

Furthermore, Egypt Oil&Gas noted that the new facility would also support efforts to decarbonise in the petrochemical industry by maintaining a reduced carbon footprint, enhancing environmental sustainability and promoting energy efficiency – in line with Egypt’s Sustainable Development Strategy and ‘Egypt Vision 2030’.

The goal also aligns with Egypt’s plans to improve local industry and improve value-added contributions to the country’s economy, which would help improve the confidence of investors and financial institutions. In time, this would aid in securing more funding for new projects – as well as help said projects in achieving their timelines and goals.

So far, a 5mn square-metre site has been established – with agreements to supply basic infrastructure and crude supply agreed with Saudi Aramco and the Egyptian General Petroleum Company (EGPC). Additional logistics deals were also signed with Sonker Bunkering Co. and the Arab Petroleum Pipes Co. for local and international distribution agreements as well as product handling.