Egypt Approves GASCO Project to Boost Western Desert Gas Complex Capacity

Egyptian government during a cabinet meeting on September 20, 2023 (Asharq Al-Awsat)
Egyptian government during a cabinet meeting on September 20, 2023 (Asharq Al-Awsat)
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Egypt Approves GASCO Project to Boost Western Desert Gas Complex Capacity

Egyptian government during a cabinet meeting on September 20, 2023 (Asharq Al-Awsat)
Egyptian government during a cabinet meeting on September 20, 2023 (Asharq Al-Awsat)

Egypt's Cabinet approved granting a golden license to the Egyptian Natural Gas Company (GASCO) regarding a project to increase the capacity of the Western Desert Gas Complex with a fourth production line with a design capacity of 600 million cubic feet per day.

The Gasco project is expected to provide employment opportunities for about 2,500 workers with an investment cost of about $380 million.

It spans about 33 acres in the Industrial Nahda Zone in Amreya, Alexandria Governorate.

The project aims to increase the production of natural gas derivatives, meet the raw material needs of petrochemical factories, and ensure a steady supply of LPG to support local market demands.

Furthermore, the Cabinet approved a draft law authorizing the Minister of Petroleum and Mineral Resources, Tarek el-Molla, to sign a contract with the Egyptian General Petroleum Corporation (EGPC) and Lukoil Overseas Egypt.

The contract aims to search for, develop, and exploit oil in the West-East Esh el-Mallaha development area in the Eastern Desert to continue development operations and increase production rates.

The Cabinet also granted the golden license to private company EgyptSat Auto to build and operate a factory that will begin producing electric vehicles (EVs) by the end of 2024.

According to a statement on Wednesday, the factory will produce electric passenger cars, buses, motorcycles, and charging stations. It will be built on 50,000 square meters in the 10th of Ramadan City.

It's anticipated that the EgyptSat Auto project will provide 500 job opportunities.

The project aims to reduce imports, localize the industry, deepen local components, and seek to transfer and localize modern technology in the electric car manufacturing sector, thus minimizing environmental impacts and emissions.

In addition, the Cabinet approved a proposal from AMEA Power, a subsidiary of UAE's al-Nowais Investments (ANI), to implement additional projects in the renewable energy sector.

The projects include adding 1,000 megawatts to the Aswan solar energy project and implementing a 500-megawatt wind energy project in Ras Ghareb, according to a specific timetable for project execution and connection to the national grid.

In a separate statement, the Egyptian Cabinet announced that Egypt will build a tire factory with investments of €1 billion in the Suez Canal Economic Zone (SCZONE).

The government signed the contract to establish a Rolling Plus tire manufacturing factory, which will be located in the SCZONE.

The project will be implemented in three phases, each with a different production line and target market.

The first phase will cost €400-450m and produce 2.5 million automobile tires annually, 50 percent of which will be supplied to the local market.

The second phase will add light transport tires, producing 3.5 million tires annually, 40 percent of which will be for the local market, while the third will increase the production capacity to 7 million by adding the heavy transport tire industry.



Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
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Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Oil prices slipped on Thursday after surging in the previous session on a larger-than-expected draw in US gasoline stocks, as markets weighed macroeconomic concerns and demand versus supply expectations. Brent futures were down 30 cents to $70.65 a barrel at 1140 GMT, while US West Texas Intermediate crude futures fell 31 cents to $67.37 a barrel.

Both benchmarks rallied about 2% on Wednesday after US government data showed tighter-than-expected oil and fuel inventories.

US gasoline inventories fell by 5.7 million barrels, more than the 1.9 million-barrel draw expected by analysts, while distillate stocks also dropped more than anticipated, despite gains in crude stocks, Reuters reported.

"Declining US gasoline inventories raised expectations for a seasonal demand increase in spring, but concerns about the global economic impact of tariff wars weighed on the market," said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.

"With strong and weak factors progressing simultaneously, it has become difficult for the market to lean decisively in one direction or the other," he added. US President Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.

Trump's focus on tariffs has rattled investors, consumers and business confidence, and raised US recession fears. With the US president's stated commitment to cheaper oil, Citi analysts said their outlook for Brent by the second half of 2025 is $60 a barrel.

Global oil supply could

exceed demand

by around 600,000 barrels per day this year, the International Energy Agency said on Thursday, revising down its 2025 demand growth forecast. Meanwhile, the Organization of the Petroleum Exporting Countries said on Wednesday that Kazakhstan led a sizeable jump in February crude output by the wider OPEC+, highlighting a challenge for the producer group in enforcing adherence to agreed output targets, even as it intends to unwind production cuts.

Worries about flagging jet fuel demand weighed further on markets, with JP Morgan analysts saying that US Transportation Security Administration data showed "passenger volumes for March have decreased by 5% year-over-year, following stagnant traffic in February".

However, recent firm global demand numbers limited overall market weakness.

"As of March 11, global oil demand averaged 102.2 million barrels per day, expanding 1.7 million barrels per day year-over-year and exceeding our projected increase for the month by 60,000 barrels per day," the JP Morgan analysts added.