EATCO - Suez Petrochemicals Complex - Gas To Polyolefins

PB2001-102056
1111111111111111111111111111111111
EATCO - Suez Petrochemicals Complex
Natural Gas to Polyolefins Project (GTP)
Suez, Egypt
Final Report
Volume One - Project Information Memorandum
For:
Egyptian Arab Trading Co. (EATCO)
Prepared by:
UOPLLC
&
Bank of America, N.A.
Financial Advisor
Together with:
Kvaerner U.S. Inc.
Engineering Consultant
CMAI Chemical Marketing Associates, Inc.
Market Consultant
Nexant Inc.
Environmental Consultant
This version ofthe feasibility study report excludes certain details that are provided only in the full confidential version
ofthe report.
REPRODUCED BY: ~
u.s. Department of Commerce
National Technical Information Service
Springfield, Virginia 22161
NOTICE
This document has been reproduced from the best copy furnished to NTIS
by the U.S. Trade and Development Agency. Although it is recognized that
certain portions may be illegible, it is beingreleased in the interest of
making available as much information as possible.
Please direct questions about illegible pages to:
The Library
U.S. Trade and Development Agency
Telephone: 703-875-4357
Thank you.
Feasibility Study Report - Volume 1 of2

EATCO - Suez Petrochemical Complex GTPProject
Suez, Egypt
Important Notice
The intended purpose of this report is EATCO's evaluation of the
feasibility ofinstalling a GTP Plant only and it does not constitute a
solicitation, or offer or invitation to EATCO or any third party to
lend or invest or otherwise participate in the GTP Plant. This report
is not intended to provide the sole basis of any credit or other
financial or non-financial evaluation. Any potential joint venture
partner, lender, investor or other participant to whom a copy ofthis
report is furnished should determine for itself the relevance of the
information contained herein and its interest in participating in the
GTP Plant should be based upon such investigation, as it deems
necessary andprudent. Neither UOP LLC nor its subcontractors nor
any of their respective directors, employees, representatives or
agents makes any warranty, representation or guarantee what so
ever, express or implied, in respect to the correctness, and/or
accuracy of the information, conclusions, results, opinions and/or
other data contained in this report and any reliance by any party on
the information, conclusions, results, opinions and/or other data in
this report is at the sole risk ofsuchparty.
PROTECTED UNDER INTERNATlONAL COPYRIGHT
ALL RIGHTS RESERVED
NATIONAL TECHNICAL INFORMATION SERVICE
U.S. DEPARTMENT OF COMMERCE
ii
June, 2000
This report was funded in part by Egyptian Arab Trading Company (EATCO), the Egyptian Sponsor. The opinions,
fmdings, conclusions, or recommendations expressed in this document are those of the author(s) and do not
necessarily represent the official position or policies of EATCO.
Egyptian Arab Trading Co. (EATCO), headquartered in Cairo, Egypt is a holding company for investments in the
oil and gas industry in Egypt.
UOP LLC, headquartered in Des Plaines, Illinois, USA, is a leading international supplier and licensor of process
technology, catalysts, adsorbents, process plants, and technical services to the petroleum refining, petrochemical,
and gas processing industries.
BankofAmerica. ~
~ -

Suez, Egypt
Table of Contents
Volume I - Project Information Memorandum
iii
June, 2000
Preface page V
Participants in the Feasibility Study page VI
Contacts page VII
1. Executive Summary
1.1 Project Overview
1.2 Project Technical Information
1.3 Project Cost
1.4 Financial Analysis Results
1.5 Environmental Considerations
2. Project Information
2.1 Project Description
2.2 Location ofProject

2.3 Project Ownership
2.4 Status ofKey Elements of Project Structure
3. Feedstock Supply & Product Off-take
3.1 Feedstock Supply
3.2 Product Offtake
4. Project Costs
5. Financing Plans
5.1 Potential Sources of Finance
5.2 SPC Financing Plan
5.3 Equity Funding
5.4 Debt Funding
6. Risk Assessment & Risk Mitigation
6.1 Risk Assessment
6.2 Risk Mitigants
BankofAmerica. ~
~ -
Feasibility Study Report - Volume I of2
Suez, Egypt
7. Project Economics
7.1 Key Assumptions
7.2 Base Case Results
7.3 Sensitivity Analysis
7.4 Economic Model
iv
June, 2000
8. Market Information
8.1 Market Study
8.2 Polyolefm Market Overview
8.3 Product Supply & Demand
8.4 Product Prices
8.5 RawMaterial Prices & Availability
8.6 Competition
8.7 Market Share
9. Project Technical Information
9.1
9.2
9.3
9.4
9.5
Process Descriptions
Process Flow Diagrams (Simple)
Process Experience Lists
Operating Costs & Utilities
Project Implementation Schedule
10. Preliminary Environmental Assessment

11. Project Sponsor Information
11.1 EATCO
11.2 Kvaemer
11.3 Ferrostaal
11.4 Other Sponsors
12. Information Regarding Government ofEgypt
12.1 Commitment to Project
12.2 Legal & Regulatory Environment
12.3 Status of Government Requirements
12.4 Egypt Country Profile
Bankof America, ~
~ -

EATCO- Suez Petrochemical Complex GTPProject
Suez, Egypt
Preface
v
June, 2000
This feasibility study report was prepared for the Egyptian Arab Trading Company (EATCO), to
evaluate the proposed installation of a plant to convert natural gas to polyolefins. The plant is to be
located in the Suez region of Egypt and will produce polyethylene and polypropylene.
The U.S. Trade and Development Agency and Egyptian Arab Trading Company funded this
feasibility study with cooperation by UOP LLC, Kvaemer U.S. Inc., and Bank of America, N.A.
The feasibility study report is arranged as outlined below:
Volume One
Project Information Memorandum
3. Feedstock Supply& Product Off-take
4. Project Costs
5. Financing Plans
6. Risk Assessment & Risk Mitigation
12. Information Regarding the Government of
Egypt
Volume Two
Technical Information
1. Technical Summary
2. General
3. Process Descriptions
4. Process Flow Diagrams
5. Utility Flow Diagrams
6. Consumption Data
7. Equipment Information
8. Preliminary Site Plan
9. Preliminary Plot Plans
10. Buildings
11. Preliminary EPC Schedule
12. Procurement Plan
13. Cost Estimates
14. Environmental Considerations
15. Technology Information
BankofAmerica. ~
~ .

Suez, Egypt
Participants in the Feasibility Study
vi
June, 2000
Egyptian Arab Trading Company (EATCO) is a holding company for investments in the oil and
gas industry in Egypt amongst others, headquartered in Cairo Egypt.
UOP LLC is a leading international supplier and licensor ofprocess technology, catalysts,
adsorbents, process plants, and technical services to the petroleum refining, petrochemical, and gas
processing industries, headquartered in Des Plaines Illinois USA.
Kvremer Group is a world-class Anglo-Norwegian engineering and construction Group,
registered in Norway with a London based international headquarters.
The E&C business area of Kvrerner ASA specializes in the provision ofprocess technology, design,
engineering, project management, procurement and construction to a number of industrial sectors
on a world-wide basis: chemicals and polymers, pharmaceuticals, oil and gas, water, energy,
nuclear, minerals, mining, steel and transportation.
Bank of America Corporation, with $656 billion in total assets, is one ofthe largest banks in the
United States. Bank ofAmerica provides fmancial products and services to 30 million businesses,
as well as providing international corporate financial services for business transactions in 190
countries.
According to the Project Finance International league tables Bank of America was the 2nd largest
global arranger of project fmance in 1999. Bank of America is ranked as one of the top four Global
Project Finance Advisors every year since 1992 by Project Finance International.
Chemical Market Associates Inc. (CMAI) is a petrochemical consulting firm which services a
wide range of clients throughout the world through its offices in Houston, TX, Miami, FL, London
and Singapore. Since its founding in 1979, CMAI has been recognized as providing accurate,
timely consulting services for the worldwide petrochemical, plastics, fibers and cWor-alkali
industries.
Nexant LLC is a Bechtel Technology & Consulting Company, providing services in
environmental compliance, environmental impact assessment, sustainable development, energy
utility services, advanced energy technology, oil and gas, interactive energy systems, and energy
delivery and management. Nexant is comprised ofover 150 engineers, scientists and staff, and is
headquartered in San Francisco, with key offices located in Washington, DC, London, Cairo, Abuja
and New Delhi.
Business contacts for each ofthe above companies are provided on the next page.
BankofAmerica. ~
~ -

Suez, Egypt
Contacts
Egyptian Arab Trading Co. (EATCO)
27 Abdul Hamid Badawi St.
El Nuzha, Heliolois
Cairo-Egypt
Contact: Mr. Yehya A. El Komi
Tel: 20-2-241-9535
Fax: 20-2-243-0027
UOPLLC
25 E. Algonquin Road
Des Plaines, IL 60017-5017 U.S.A.
Contact: Mr. James M. Andersen
Tel: 847-391-2000
Fax: 847-391-2253
Kvaerner E & C
7909 Parkwood Circle Drive
Houston, TX 77036 U.S.A.
Contact: Mr. Dwane R. Stone
Tel: 713-988-2002
Fax: 713-772-4673
Bank of America, N.A.
1 Alie Street
London El 8DE
United Kingdom
Contact: Mr. Adriano Rossi
Tel: 44-20-7809-5272
Fax: 44-20-7634-4976
Chemical Marketing Associates, Inc. - CMAI
11757 Katy Freeway
Suite 750
Houston, TX 77079
Contact: Ms. Debbie Rhoden
Tel: 281-752-3246
Fax: 281-531-9966
NexantLLC
1030 15
th
Street NW, Suite 300
Washington, DC 20005
Contact: Mr. Mark Hodges
Tel: 202-326-1611
Fax: 202-326-1620
vii
June, 2000
BankofAmerica. ~
~ -

Suez, Egypt
Section 1 Page 1
June, 2000
1.1
1.2
1.3
1.4
1.5
Project Overview
Project Technical Information
Proj ect Cost
Financial Analysis Results
Environmental Considerations
page 2
page 4
page 6
page 7
page 7
Bankof America, ~
~ .

Suez, Egypt
1.1 Project Overview
Section 1 Page 2
June, 2000
The EATCO - Suez Petrochemical Complex project will produce polyethylene and polypropylene
to primarily supply the growing polyolefin market in Egypt. The project will reduce the dependence
on imports, which currently supply the entire polyolefin market in Egypt. The polyolefins will be
produced from natural gas feedstock, which helps to preserve Egypt's crude oil reserves while
adding value to Egypt's growing natural gas reserves. The natural gas will be supplied from the
Egyptian Natural Gas Company (GASCO).
The project sponsor is the Egyptian Arab Trading Company (EATCO), which is a private Egyptian
company managed and owned by Mr. El Komi. EATCO will be one ofthe major equity
participants in the project. Kvaerner and Ferrostaal are also expected to be equity participants along
with others.
The GTP facility will be a grass-roots construction comprising process plants supported by a
utilities/offsites plant to produce 400,000 MTA (metric tons per annum) of bagged polyolefins,
50% polyethylene and 50% polypropylene. The facility will be supplied with natural gas (for
feedstock and fuel), raw water, and electric power and will generate all additional utilities required.
Location of Project
The proposed site is located in the North West Gulf of Suez Special Economic Zone, approximately
40 km south of Suez City and 120 km east of Cairo City, close to the new port at Ain El Sukhna.
The Gas to Polymers (GTP) facility will be located in the southern section of the zone in the area
designated "Petroleum Section", which comprises an area ofapproximately 11.9 km
2
This location offers; a nearby port facility with good access to markets in Europe, U.S., Far East &
Middle East, a ten year tax holiday with potential to be extended to twenty years with cabinet
approval, a unified customs duty rate of 5%, and the availability of natural gas, electricity, and
water, as well as roads, railways and telecommunications.
Gas to Polyolefins Complex Description
A simple block flow diagram ofthe complex is provided on the next page. Natural gas feedstock is
converted to methanol in a two-step process within the Methanol Plant. The first step ofmethanol
synthesis converts methane to syngas (carbon monoxide and hydrogen) and then the syngas is
converted to methanol. The crude methanol is subsequently fed to the MTO Plant where it is
converted primarily to ethylene and propylene. Byproducts from the MTO Plant include mixed
butenes, C
s
+hydrocarbons and water. The hydrocarbon byproducts are sent to the utilities and
offsites facilities where they are bumed as fuel and the water is recovered and purified for steam
generation. The ethylene and propylene are sent to the polyolefms plant for conversion to
Bankof America. ~
~ -
polyethylene and polypropylene, respectively. The polyethylene unit can alternate between the
production of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE).

Suez, Egypt
Section 1 Page 3
June, 2000
EATCO - Suez Petrochemical Complex Project
Natural Gas
Feed &Fuel
2.79 MMNm
3
/Day
104.1 MMSCFD
Electric Power
42M'N
RawWater
1861 m
3
/Day
Natural Gas Fuel
Normally Nil
Seawater Supply ----'
665,568 m
3
/Day
Seawater Retum ~ - - - - - - '
Technologies
r-----------------------
I 1
I 1
I I
I 1
I
1
I
Polyolefins Plant
Propylene
I
I
I
I
I
I I
I I
: _ - - - - - - - - - - - - - - - - - - - - - ~
WasteWater
908 m
3
/Day
Notes:
Continuous Operation based on 8,000 operating hours per year
MTA = Metric Tons per Annum, MTD = Metric Tons per Day
MM Nm
3
/Day = Million Normal Cubic Meters per Day
The EATCO - Suez Petrochemicals Complex project is based on using the following process
technologies:
Kvaerner ReforminglICI Low Pressure Methanol Process
UOPIHYDRO MTO Process
UNlPOL PE Process
UNlPOL PP Process
These processes offer world-class performance from reputable licensors and produce products
meeting the highest quality standards.
BankofAmerica, ~
~ -

Suez, Egypt
Advantages of Gas to Polyolefms Route
Section 1 Page 4
June, 2000
The gas to polymers (GTP) approach using the UOPIHYDRO MTO process offers a new means to
produce polyolefins. The majority ofpolyolefins are produced from olefins derived from
conventional steam cracking of ethane or naphtha. While these and other options can offer
profitable means to produce polyolefins, they have product limitations and require different
feedstocks that make them less attractive for the objectives ofthe SPC project. The GTP option is
the best choice for this project because;
GTP is the only option that can cost effectively utilize lean (high methane content) natural gas
GTP offers the lowest costs of production for producing both polyethylene and polypropylene.
GTP offers competitive economics at production capacities that are aligned with the sizes ofthe
domestic polyolefin markets in Egypt.
GTP does not depend on the development and growth of other markets such as refining,
aromatics, and butadiene.
1.2 Project Technical Information
The EATCO- Suez Petrochemical Complex will use natural gas as the feedstock. For this
feasibility study, the hydrocarbon byproducts are utilized as fuel and effluent water is recovered and
treated to minimize rawmaterial and utility consumption. A relatively small amount of electric
power is generated within the facility to fully utilize the fuel byproducts and keep the complex in
balance (no export of fuel), while slightly reducing the net consumption of electrical power. The
project includes a closed-loop cooling water circuit exchanged against seawater. The facilities for
seawater intake, circulation, and discharge are included in the project scope.
Plot Area
The facility will require a minimum plot area of371,520 m
2
based on the preliminary site plan
developed for this study. The site area is laid-out on a plot with dimensions of 576 meters by 645
meters. This site plan includes process units, control room, utilities, waste water treatment ponds,
flare systems, warehouses, administration buildings, loading facilities, and parking.
Operating Costs
The consumption of raw materials, catalysts and adsorbents, chemicals, utilities, and the operating
costs are summarized in the following table.
BankofAmerica. .,.,.;;::-
~ -

Suez, Egypt
Section 1 Page 5
June, 2000
Operating Cost Summary
(I) Natural gas pnce based on $1 per mIllIon B.t.u. and a gross heatmg value of 1062 B.t.u. per standard CUbIC foot.
(2) Equivalent to $1 per million B.t.u.
Expected $/MTof
Requirement Unit Cost $MM/Yr Polyolefm
Natural Gas 930.00 MMNm
3
Nr
$39,630(1)
$36.86 $93
Copolymer Credit -22.55 MMNm
3
Nr
$39,630(1)
($0.89)
.ern
Net Natural Gas 907.45 MMNm
3
Nr
$39,630(1)
$35.97 $91
Copolymers 9,701 MTA $724 $7.02 $17
Raw Material Cost -- --
$42.99 $108
Catalysts - Steady
MTO & Polyolefm Plants
-- -- Included Included
Catalysts & Adsorbents
- Periodic Replacement
-- --
Included Included
Catalyst & Adsorbents -- -- $30.07 $75
Chemicals - -- $0.75 $2
Electricity 42.0MW $30/MW-h $10.08 $25
Raw Water 77.5 m
3
/hr $0.60/m
3
$0.37 $1
Fuel nil
$3.41/MW-h(2)
$0.00 $0
Utilities Cost -- -- $10.45 $26
Labor 314 Employees -- $9.55 $24
Maintenance & I08ur. -- -- $13.2 $33
Fixed Costs -- -- $22.75 $57
Total Cash Costs of
Production -- -
$107.01 $268
..
Bankof America. ~
~ -

Suez, Egypt
Section 1 Page 6
June, 2000
The preliminary project schedule is outlined below based on an assumed project kick-off date in
January of year 2001.
Key Milestones Estimated Date Elapsed Time
Project Kick-Off 2 January 2001 oMonths
Basic Engineering Completed 1 August 2001 7 Months
EPC Contract Awarded 2 January 2002 12 Months
Construction Started 2 September 2002 20 Months
Startup & Test Runs Completed 30 June 2004 42 - 48 Months
to 31 Dec 2004
The following table shows the current estimates for the various components ofproject costs:
1.3 Project Cost
SPC Complex ISBL & OSBL

EPC ContingencylProfit
Consultants
LSEPC Cost
Spares (Capital & Running)
Insurance
License Fees
Catalyst & Adsorbent Inventory
Land, Import Duties, Development costs and other costs
Subtotal
Interest During Construction & Finance Fees
Total Project Cost
US$ million
704.2
Included
Included
799.1
Included
Included
Included
Included
Included
1,069.2
184.8
1,253.9
BankofAmerica, ~
~ -

Suez, Egypt
1.4 Financial Analysis Results
Section 1 Page 7
June, 2000
The financial model uses the Base Case assumptions to calculate internal rates of return (IRR) and
net present value ofproject cash flows for the assumed 25 year project economic life period and
debt service coverage ratios for the period during which debt is outstanding.
The Base Case model gives the following results:
ProjectIRR Equity IRR
(pre-tax, (attributable CF,
nominal) nominal)
:'... ....:i:..\ >
.......:
1'" ",O/,..
23.8% . :.:.:
1.5 Environmental Considerations
The process technologies used for this facility are based upon proven operating plants around the
world and information gained from the operation ofthese plants will form the basis ofthe design
and operation ofthe SPC complex.
The SPC complex is to be located in an industrial complex in the Suez region of Egypt. Nearby
facilities will include other petrochemical plants, the port of Ain EI Sokhna and the main highway
from Suez to Zaafrana. The preliminary plant layout takes into account the prevailing wind in the
region to minimize the effects of stack emissions on the facility.
No unique or unusual potential major hazards are associated with the installation and operation
ofthe GTP complex. The design and layout ofthe facility will be so as to minimize inadvertent
emissions to the atmosphere through the implementation of control safeguards as well as the use
of well-trained operations and maintenance personnel.
BankofAmerica. ~
~ -
Suez, Egypt
Section 2 Page 1
June, 2000
2.1
2.2
2.3
2.4
Project Description
Location ofProject
Project Ownership
Status of Key Elements ofProject Structure
page 2
page 5
page 6
page 6
BankofAmerica. ~
~ -
. Suez, Egypt
2.1 Project Description

Section 2 Page 2
June, 2000
The EATCO - Suez Petrochemical Complex project will produce polyethylene and polypropylene
to primarily supply the growing polyolefin market in Egypt. The project will reduce the dependence
on imports, which currently supply the entire polyolefm market in Egypt. The polyolefins will be
produced from natural gas feedstock, which helps to preserve Egypt's crude oil reserves while
adding value to Egypt's growing natural gas reserves. The natural gas will be supplied from the
Egyptian Natural Gas Company (GASCO).
The project sponsor is the Egyptian Arab Trading Company (EATCO), which is a private Egyptian
company managed and owned by Mr. EI Komi. EATCO will be one ofthe major equity
participants in the project. Kvaemer and Ferrostaal are also expected to be equity participants along
with others.
The GTP facility will be a grass-roots construction comprising an inside battery limits (lSBL) plant
supported by a utilities/offsites plant to produce 400,000 MTA (metric tons per annum) of bagged
polyolefms, 50% polyethylene and 50% polypropylene. The facility will be supplied with natural
gas (for feedstock and fuel), raw water, and electric power and will generate all additional utilities
required.
The ISBL complex comprises the following process units:
Methanol Production Plant
Olefins (MTO) Production Plant
Polyethylene Production Plant
Polypropylene Production Plant
The OSBL plant comprises the following systems:
Raw Water Treatment System
Firewater System
Potable Water System
Stripped MTO Byproduct Water Treating
Boiler Feedwater Treating
-Condensate Polishing
Deaerator and Condensate Return
Cooling Water Systems - closed loop circulation and seawater circulation
Wastewater Collection and Treating
HP Boilers
Plant Instrument Air Generation and Distribution
Nitrogen Generation and Distribution
BankofAmerica. ~
~ -

Suez, Egypt
Power Generation
Flare Systems
Offsites Storage
Gas to Polyolefms Complex Description
Section 2 Page j
June, 2000
A simple block flow diagram ofthe complex is provided on the next page. Natural gas feedstock is
converted to methanol in a two-step process within the Methanol Plant. The first step of methanol
synthesis converts methane to syngas (carbon monoxide and hydrogen) and then the syngas is
converted to methanoL The methanol is subsequently fed to the MTO Plant where it is converted
primarily to ethylene and propylene. Byproducts from the MTO Plant include mixed butenes, C
s
+
hydrocarbons and water. The hydrocarbon byproducts are sent to the utilities and offsites facilities
where they are burned as fuel and the water is recovered and purified for steam generation. The
ethylene and propylene are sent to the polyolefins plant for conversion to polyethylene and
polypropylene, respectively. The polyethylene unit can alternate between the production of high
density polyethylene (HDPE) and linear low density polyethylene (LLDPE).
Site Requirements
The facility will require a minimum plot area of approximately 371,520 m
2
based on the
preliminary site plan developed for this study. The site area is laid-out on a plot with dimensions of
576 meters by 645 meters. This site plan includes process units, control room, utilities, waste water
treatment ponds, flare systems, warehouses, administration buildings, loading facilities, and
parking.
The proposed facility will be supplied with natural gas feedstock, raw water and electric power at
the 33 kV source leveL Steam, instrument air, plant air, and nitrogen will be generated within the
facility.
Cooling water for the facility will be provided via a closed loop cooling water circuit. The
circulating cooling water will be cooled by seawater. Seawater will be used directly for some
cooling requirements. In addition, air coolers will also be employed where applicable.
Infrastructure roads are provided within the facility boundary. Supply roads to/from the facility
from local highways are excluded from the scope ofthe facility.
BankofAmerica. ~
~ -

Suez, Egypt
Section 2 Page 4
June, 2000
EATCO - Suez Petrochemical Complex Project
Natural Gas
Feed &Fuel
2.79 MMNm
3
/Day
104.1 MMSCFD
Electric Power
42WNV
Raw Water
1861 m
3
/Day
Natural Gas Fuel
Normally Nil
Seawater Supply -----'
665,568 m
3
/Day
Seawater Return .--------1
Technologies:
r-----------------------
I I
I I
I I
I I
I
I
I
Polyolefins Plant
Propylene
I
I
I
I
I
I I
I I
~ - - - - - - - - - - - - - - - - - - - - - - ~
WasteWater
908 m
3
/Day
Notes:
Continuous Operation based on 8,000 operating hours per year
MTA =Metric Tons per Annum, MTD=Metric Tons per Day
MM Nm
3
/Day =Million Normal Cubic Meters per Day
Methanol Plant:
MTO Plant:
Kvaemer Refonning/lCI Low Pressure Methanol Process
Nominal Capacity = 1,208,000 MTA of Crude Methanol
UOPIHYDRO MTO Process
Nominal Capacity = 204,000 MTA ofEthylene &
205,000 MTA Propylene
Polyolefins Plant: UNIPOL PE Process

Nominal Capacity =
UNIPOL PP Process
Nominal Capacity =
200,000 MTA ofPolyethylene
200,000 MTA ofPolypropylene
BankofAmerica. ~
~ .
Suez, Egypt
2.2 Location of Project

Section 2 Page 5
June, 2000
The proposed site is located in the North West Gulf of Suez Special Economic Zone, approximately
40 Ian south of Suez City and 120 Ian east of Cairo City, close to the new port at Ain El Sukhna.
The Gas to Polymers (GTP) facility will be located in the southern section ofthe zone in the area
designated "Petroleum Section", which comprises an area ofapproximately 11.9 km
2
NewPort
Facility
Location of EATCO
Suez Petrochemical Complex

Appx. 20 kilometers
~ ~
4$'0J"
Cairo I Ein Sokhna - Highway ~ ' I > '
''Ii
",,<"
Southern Part of "-,,,\
C:JV
Gulf of Suez ~ " ' ' ' ' ' ' ' ' '
Special Economic Zone I .... "')
I J
I ~
I. I
Petroleum Section ---,' ~
including EATCO - SPC
This location is one ofthe Golden triangle ofdevelopment areas including the three governments of
Port Said, Ismailia and Suez. Port Said is planned to be a global distribution center. Ismailia is
planned to push forward into the information technology area Suez or more specifically the North
Western Gulf of Suez, is to develop a free industrial zone. Special economic incentives have been
established to promote development in this region. The advantages ofthis location can be
summarized as follows:
Bankof America. ~
~ -

Suez, Egypt
Section 2 Page 6
June, 2000
a geographical position with good access to markets in Europe, U.S., Far East & Middle East.
a tax holiday for a period of ten year's starting the first financial year subsequent to beginning
production, with potential to be extended to twenty years subject to the approval ofthe cabinet
a unified customs duty rate of 5% of the value of goods shall apply for all machines, equipment
and instruments imported as necessary for the establishment ofthe companies in this zone.
availability ofelectricity and water supply as well as roads, railways and telecommunications.
availability ofthe natural gas at Ras Shukair.
availability of a new modem port facility with a total area 25 K.m
2
(under construction).
Other incentives include:
It is allowed to setup "free trade zones" for projects in this area.
The companies and establishments shall not be nationalized or confiscated or sequestered.
No government intervention in the pricing ofthe establishment's products, nor in determining
their profits.
The companies have the right to own building lands and real estate regardless of their
nationalities.
The foreign investors have the rights to transfer without any restriction, their profits and hard
currency to their homeland.
The Zone will be connected with the program ofupgrading and updating industry, particularly,
establishing twenty technological centers in all industrial sections as a base for offering the
technological infrastructure and training requirements.
2.3 Project Ownership
The project will be owned and operated by the Suez Petrochemical Company ("SPC") (yet to be
formed). Anticipated SPC shareholders include EATCO, Kvaemer, Ferrostaal, and others. The
proposed initial ownership structure of SPC is included in the confidential version ofthis report
only.
2.4 Status of Key Elements of Project Structure
The project development status is included in confidential version ofthis report only.
BankofAmerica. ~
~ -
Suez, Egypt
3. Feedstock Supply and Product Offtake

Section 3 Page 1
June, 2000
3.1
3.2
Feedstock Supply
Product Offtake
page 2
page 2
BankofAmerica. ~
~ -
Suez, Egypt
3.1 Feedstock Supply

Section 3 Page 2
June, 2000
Egyptian Natural Gas Company (Gasco), the natural gas marketing ann of the state owned
Egyptian Petroleum Corporation (EGPC), has advised EATCO in a letter dated 20 October 1998 of
its ability to supply to the project a sufficient quantity oflean natural gas (i.e. methane rich) starting
from 2004.
Egypt has abundant reserves of gas: as of early 1999, Egypt's total proven gas reserves were
estimated at 31.5 trillion cubic feet (Tcf), up 54% from 20.4 Tcfin 1997, and more than double
the 15 Tcf of proven reserves in 1993. Reserves are expected to increase substantially in the next
few years. Most of this increase has come about as a result of new gas discoveries in the
Mediterranean offshorelNile Delta region, and increasingly in the Western Desert.
3.2 Product Offtake
SPC's marketing plan is to maxmnze domestic sales and export the balance quantItIes of
products, to ensure that SPC will obtain the highest margins on product sales. Domestic margins
are expected to be the highest for SPC, given lower transportation costs and import duties of 17%
imposed on imported polyolefin products (and directly passed onto consumers).
For export sales SPC will enter into long-term offtake arrangements with a leading international
PPIPE distributor/seller. The CMAI report suggests that nearby markets such as Turkey, Israel
and Morocco should be targeted for export sales.
BankofAmerica. ~
~ -
Suez, Egypt
4. Project Costs
Section 4 Page 1
June, 2000
4.1 Total Project Costs page 2

BankofAmerica. ~
~ -
Suez, Egypt
4.1 Total Project Costs

Section 4 Page 2
June, 2000
The following table shows the current estimates for the various components of project costs:
Methanol plant
MTOplant
Polyethylene & Polypropylene plants
Total ISBL
OSBL
SPC Complex ISBL & OSBL
Consultants
EPC Contingency / Profit
LSEPC Cost
Spares (Capital & Running)
Insurance
License Fees
Catalyst & Adsorbent Inventory
Import Duties
Land
Pre-operational Administrative Costs
Commissioning & Start-up
Project Management Consultant Fee
N Development
Subtotal
Interest During Construction & Finance Fees
Total Project Cost
US$ million
188.3
164.2
136.9
489.4
214.8
704.2
Included
Included
799.1
Included
Included
Included
Included
Included
Included
Included
Included
Included
Included
1,069.2
184.8
1,253.9
SPC complex inside battery limits (lSBL) and outside battery limits (OSBL) costs have been
estimated by Kvaemer (see section 13 ofVolume 2). The costs for the methanol plant, the MTO
plant, the polyolefins plant as well as the utilities and offsites are shown in above table.
The cost for license fees, catalyst and adsorbent inventory, capital and running spares, consultants
and insurance have been estimated by Kvaemer and UOP.
Import duties, land costs, pre-operational administrative costs, commissioning / start-up costs,
project management consultant fees and N development costs have been estimated by EATCO.
Finance fees include front end fees, commitment fees on the Commercial and ECA Facilities and
the ECA premium on the ECA Facility. Finance fees and interest during construction are calculated
per the Base Case assumptions.
BankofAmerica. ~
~ -
FeasibUity Study Report - Volume 1 of2
Suez, Egypt
5. Financing Plan
Section 5 Page 1
June, 2000
5.1
5.2
5.3
5.4
Potential Sources of Finance
SPC Financing Plan
Equity Funding
Debt Funding
page 2
page 5
page 6
page 6
Bankof America. ~
~ -
Suez, Egypt
5.1 Potential Sources of Finance

Section 5 Page 2
June, 2000
International Commercial Banks
International commercial banks ("ICBs") include those banks active on the international project
[mance markets with U.S. dollar long-term lending capabilities. Broadly speaking, ICBs' bases of
operations are clustered in the North America, Europe and Japan.
Tenors offered by ICBs vary depending on a project's industry sector. In the power industry, ICBs
have offered door-to-door tenors of more than 15 years; in the refining/petrochemicals industry
typical tenors are in the 10- to12-year range for appropriately structured projects. Repayment
profiles also vary according to industry, but back-ended annuity profiles (as opposed to equal
principal installment profiles) can be arranged. Tenors for loans from ICBs are also limited by the
country risk considerations, if not mitigated by export credit agency support or political risk
msurance.
ICBs do require detailed technical, commercial and [mancial due diligence and monitoring,
although they are less restricted by social or governmental policies that affect bilateral and
multilateral agencies. ICB documentation is custom-crafted and reflects the specifics ofthe project,
although bank policies and precedent transactions do playa large role.
The amount oftime required by ICBs to approve project financings varies greatly depending on the
quality and level of detail of the project structure (including contractual, commercial and financial
aspects) and risk profile presented in the request for [mance document. Typical times for internal
credit approval vary between four to eight weeks. The general syndication phase, during which
arranger banks invite other banks to join the financing, can vary between eight to eighteen weeks.
ICBs target internal minimum hurdle rates for accepted levels of return on capital; this effectively
translates into front-end fee, margin and [mal hold amount considerations for the proposed loan.
However, ICBs will factor in client relationships and the potential for follow-on business, and can
be strongly influenced by competitive pressures to get attractive terms.
Leading international banks are able to underwrite and distribute significant amounts of debt, but
most prefer to keep the [mal amount ofthe loans actually held on their books to a small percentage
ofthe total underwriting commitment. This allows the banks to arrange and underwrite additional
transactions, while minimizing the problems of portfolio concentration.
An issue concerning ICBs lending in Egypt is that ofwithholding taxes charged on interest
payments made to foreign banks. The full level ofwithholding tax is 32% ofthe interest payable on
the debt; a way to go around this problem is for ICBs to book the loan through jurisdictions that
avoid the withholding tax, such as Switzerland. However, this constraint makes the syndication of
the loan considerably more difficult as it severely restricts the potential ICB candidates.
BankofAmerica, ~
~ -

Suez, Egypt
Regional Banks
Section 5 Page 3
June, 1000
Regional banks including Gulf-based financial institutions such as Apicorp, Arab Banking
Corporation and GulfInternational Bank have typically been more constrained in their ability to
provide longer tenor facilities than the ICBs due to asset/liability matching issues. More recently
regional banks have arranged and participated in longer tenors on project financings.
Regional banks have, in the recent past, offered extremely competitive pricing and have show
appetites for larger final hold amounts than ICBs (primarily due to strategic and relationship
considerations and a need to build assets).
Local Banks
Local Banks have been active players in past project financings in Egypt lending on tenors in the
region of8 years (although a 15-yeartenor was achieved on a particular financing that involved a
guarantee from the Central Bank ofEgypt). These banks include National Bank ofEgypt,
Commercial International Bank, Banque du Caire, Misr Bank. However the local bank market
liquidity has been tightening in the past few months, both for domestic and foreign currency, due to
the growth ofthe economy and a consequent demand for credit.
Islamic Financing
Islamic fmancing institutions, such as the Islamic Development Bank, adhere to Islamic law,
Shari'a, and are restricted to certain types of financing, especially, leasing and certain types of
installment sale that do not levy interest. Several financing in the Islamic world include an
Islamic financing tranche because of investor appetite in the region. In project financings, due to
problems arising out ofthe sharing of security, it is generally preferable to utilise Islamic
fmancing tranches for facilities that are distinct from the rest ofthe project such as housing
modules.
Export Credit Agencies
Export credit agencies ("ECAs") such as the Export-Import Bank ofthe United States ("U.S. Ex-
1m"), the U.K.'s Export Credits Guarantee Department ("ECGD"), and the Japan Bank for
International Cooperation ("JBIC") are mandated to support exports from their home countries.
ECAs offer support by extending insurance, guarantees, or in some cases direct loans to -
depending upon the program being used - an exporter, a purchaser, or the lenders. For this, ECAs
charge a premium or other fees. Depending on the program ECAs may offer fixed interest rates
based upon the Commercial Interest Reference Rate, CIRR, set by the OECD. The amount of
eligible fmancing is typically limited to the lower of85% ofthe value ofthe contract with the
exporter or 100% ofgoods and services originating from such country. ECAs have different levels
offlexibility in incorporating local installation costs in the eligible fmancing.
BankofAmerica. ~
~ -
Depending on the country and the sector, ECA financings can offer longer tenors than financings
from ICBs and regional banks; the recently updated OECD guidelines for project fmancings permit
repayment periods up to a maximum of 14 years and tenors with average lives ofup to 7.25 years.
ECAs can mobilize large levels of financing for a project by extending the amount ofICB debt that
would be available. This is because banks typically do not count ECA-guaranteed or insured debt
against their country limit exposure. In theory, ECA fmancing is not supposed to "crowd out"
private sector lenders and the all-in cost ofECA financing is not necessarily more attractive than
uncovered fmancings. Egypt is rated as an OECD category 4 country, which establishes a minimum
country risk premium for the OECD ECAs, as reflected in the fmancing assumptions in the base
case.

Suez, Egypt
Section 5 Page 4
June, 2000
Withholding tax considerations are less of issue on ECA guaranteed facilities as several ECAs
qualify for a reduction or complete elimination ofwithholding tax.
Multilateral and Bilateral Agencies
Multilateral agencies, such as the International Finance Corporation ("IFC") ofthe World Bank
Group, and bilateral agencies, such as the Overseas Private Investment Corporation ("OPIC") of the
United States offer alternative sources of funding provided the project meets certain criteria. The
key benefit ofthese agencies is to provide support for projects in countries perceived by
international lenders to have a high degree ofcountry risk.
The IFC has been very active in Egyptian project finance transactions, in part because of
withholding tax advantages for ICBs lending under the "B" loan ofthe IFC's "A"I"B" loan
structure. The IFC may be a potential source of funding for the SPC project. It should be noted,
however, that IFC applies a rigorous and methodical approval process where projects must meet
IFClWorld Bank guidelines on environmental issues and competitive bidding.
U.S. and International Debt Capital Markets
Limited distribution bond issues (such as bonds distributed under the U.S. SEC Rule 144a) have
become an increasingly attractive source of finance for projects. However, the availability,
amounts, tenors and pricing available from bond issues can fluctuate greatly depending on the
conditions in the capital markets (which introduces higher uncertainty in the financing plan). The
project bond market has been tapped for more than US$1 billion for certain projects, but generally a
minimum ofUS$100 million would need to be raised to make a 144a bond issue cost effective.
Bond investors can accept substantially back-ended repayment profiles; bond covenants are
generally less detailed or more objective than those for commercial term loans. Once the bonds are
issued, a bond trustee represents investors. Unlike commercial term loans, it is difficult to get
waivers or amendments in a bond structure.
Bankof America. ~
~ -
Project bonds are generally restricted in distribution to more sophisticated institutional investors,
such as insurance companies and investment funds. Although some investors are willing to take
below-investment grade bonds, larger-scale distribution would require a rating agency (e.g.
Standard & Poor's, Moody's) to have rated the bond issue as investment grade (BBB- or above for
S&P's, Baa3 or above for Moody's).

Suez, Egypt
Section 5 Page 5
June, 2000
Egypt has a split rating with BBB- from S&P's and Ba1 from Moody's (the latter is one notch
below investment grade). Export-oriented projects, with dollar (or other acceptable hard currency)
revenues, strong offtake arrangements (mostly backed by long-term contracts), selling into the
international markets and featuring revenues being deposited in offshore escrow accounts may be
able to obtain a rating higher than the host country's sovereign rating (known as "piercing the
sovereign ceiling"). SPC would need strong product export contracts for this to be possible.
Private Placement
In addition to investing in limited distribution bonds, certain institutional investors will directly
invest in unrated debt securities. Liquidity on private placements may be extremely limited and
investors will seek reasonable yield enhancement (i.e. higher interest rates). The size ofthe private
placement marketplace ranges from US$l 00 million to US$350 million.
Subordinated and Mezzanine Debt
Subordinated debt is junior in its claim on cash flow and assets to other debt a project may have
(i.e. repayable only after debts with a higher claim have been satisfied). Investors in subordinated or
mezzanine debt include a subset offinancial institutions willing to take a secondary position for a
substantially enhanced return. Subordinated and mezzanine debt is exposed to the risk of longer
tenors or average lives compared to senior debt and greater uncertainty ofregularity ofrepayment.
The risk of non-repayment in the case of default (because ofthe junior claim on assets) is higher.
Subordinated and mezzanine debt is sometimes referred to as "quasi-equity" and some investors
seek equity conversion rights to enhance their return in relation to the higher risk.
Third party subordinated debt may be attractive to the sponsors for additional "quasi-equity"
support for the project. Also, Egyptian tax and accounting regulations may prompt use of sponsor
sub-debt in lieu of equity.
5.2 SPC Financing Plan
Total project costs are currently estimated at US$ 1,254 million, which will be financed with at
least 30% equity and up to 70% debt. The Base Case assumes that a portion of debt is provided by a
Commercial Facility and the remainder by an ECA Facility. These details are included in the
confidential version ofthis report only.
BankofAmerica. ~
~ -
Suez, Egypt
5.3 Equity Funding

Section 5 Page 6
June, 2000
It is intended that at least 30% of Total Project Costs will be funded by equity. Expected
contributions of shareholders are included in the confidential version of this report only.
5.4 Debt Funding
It is expected that no more than 70% ofthe Total Project will be financed by debt. The Base Case
assumes that debt comprises a combination of (i) a facility provided by commercial banks without
the support ofexport credit agencies or other political risk providers (the "Commercial Facility")
and (ii) an export credit agency supported facility (the "ECA Facility"). The relative amounts of the
facilities are shown in the following table:
Debt Funding Amount Drawn
(US$ million)
Commercial Facility Confidential
ECA Facility Confidential
Total 877.8
The actual export credit agency (or agencies) supporting the ECA Facility will depend on the
country of origin the goods and services employed in the construction of the complex. Possible
agencies providing support include US Ex-1m, IFC, JBIC, ECGD, Hermes, Sace and Coface.
SPC will approach the relevant ECA(s) for fmancial support for all content in the EPC Contract
arising out ofthe relevant country of origin and for eligible costs as estimated by spc. Soft costs
and eligible costs include project management consultant fees, fmancing-related fees, ECA
premium, interest during construction on the ECA facility and other eligible owner's costs.
It is expected that the ECA Facility will have covered for political risk and commercial risk for a
percentage between 95% and 100% depending on the relevant ECA.
Debt Financing Assumptions
This information is included in the confidential version ofthis report only.
BankofAmerica. ~
~ -
Suez, Egypt
6. Risk Assessment and Risk Mitigants

Section 6 Page 1
June, 2000
6.1
6.2
Risk Assessment
Risk Mitigants
page 2
page 3
BankofAmerica. ~
~ -
Suez, Egypt
6.1 Risk Assessment

Section 6 Page 2
June, 2000
The following section reviews the main risks to which the project will be exposed. These
considerations are germane for both lenders and other project participants.
The contemplated financing strategy is based on a project financing approach. Project financing
fundamentally relies upon expected future cash flows generated by a project or a project company
rather than exclusively upon the creditworthiness ofthe sponsors (or owners) ofthe project, and
thus is considered to be limited recourse - i.e., with only specific, usually contingent, levels of
support from those sponsors.
These forms of limited recourse are usually offered by sponsors (and expected by lenders) to cover
specific risks that either (a) cannot be effectively managed or supported by the project company, (b)
are better managed (or more efficiently managed) by the sponsors, or (c) are not able to be
effectively assessed and quantified by the projects financiers.
The SPC Project should pursue a strategy ofefficiently allocating risk among the project
participants. Risks to be allocated include:
Construction and Completion risk;
Technology risk;
Operating Performance risk;
Feedstock Supply risk;
Margin and Price risk;
Sales Volume risk;
Environmental risk;
Political risk; and
Interest Rate and Foreign Exchange risk.
The above mentioned risks may be defined as follows:
Construction and Completion Risk: the project is not completed on schedule or on budget, or it
does not produce the expected quantity of products, or the project as completed does not perform as
efficiently as anticipated or designed.
Technology Risk: critical project technology does not perform effectively as anticipated or
designed.
Feedstock Supply Risk: the project cannot source feedstock ofthe necessary quality and quantity.
Sales Volume Risk: the project is not able to distribute and sell the quantities of its products that it
is producing.
BankofAmerica. ~
~ -

Suez, Egypt
Section 6 Page 3
June, 2000
Margin andPrice Risk: in industries with cyclical or volatile product prices (or gross margins), the
project does not receive sufficient cash flow due to decreases in the product / feedstock price
differential (margin).
Operating Performance Risk: the project is not properly operated to maximize the production
potential or it is not maintained efficiently.
Environmental Risks: the project, intentionally or unintentionally, discharges a contaminant in
violation ofapplicable environmental laws or public health and, as a result, incurs substantial
liabilities or production stoppages.
Interest Rate Risks: rising interest rates jeopardize the project's ability to service its debt.
Foreign Exchange Risks: a devaluation ofthe currency ofthe project's revenue stream ifsuch
currency is not aligned with the currency ofthe project's obligations, including debt service.
Political Risks: national or local authorities interfere with the project in a manner that frustrates its
ability to perform as expected, or conflict or seizure threaten the project.
6.2 Risk Mitigants
Construction and Completion Risks
It is anticipated that the Project will be constructed under a date-certain, lump-sum, turnkey
EPC contract covering the full scope of the design and construction ofthe project.
It is anticipated that the EPC contract will include significant liquidated damages for
contractor-related completion delays.
Technology Risk
It is anticipated that the EPC Contractor will be required to demonstrate that each of the
Complex's process units meets performance standards specified by the applicable process
licensor. Failure to meet specified design performance standards may be offset by EPC
contractor liquidated damages.
Kvaemer/lCI will supply the methanol technology. This technology is widely used in
existing operating plants; adequate performance guarantee will be provided.
BankofAmerica. ~
~ -
UOP will supply the Methanol to Olefins technology. The UOPlHydro technology has been
tested in a demonstration unit in Norway and in pilot plants but is not demonstrated on a
commercial scale. In order to mitigate the risks associated with this technology, UOP will
provide a performance guarantee with respect to feed consumption, olefins production rates
and quality with appropriate remedies and liquidated damages in case of under-performance
of the MTO unit. The process utilizes a fluidized bed reactor with a continuous fluidized bed
regenerator; this technology is an extension ofUOP's FCC/RCC commercial experience.

Suez, Egypt
Section 6 Page 4
June, 2000
Union Carbide UNIPOL technology will be employed for the polyethylene and
polypropylene polymerization process; such technology is widely used in several existing
operating plants; adequate performance guarantee will be provided.
Operating Performance Risk
Personnel with substantial experience in the operation of petrochemical plants will be
recruited by the sponsors. A comprehensive training programme will be offered by the EPC
contractor and the licensors.
Kvaerner has agreed in principle to perform the operation and maintenance of the SPC
complex with the support ofUOP and Union Carbide.
In order for operating performance risk to be appropriately mitigated, the sponsorship should
include a primary international company active in the petrochemical sector with strong
experience in operating and owning polyolefins plants.
Feedstock Supply Risk
It is anticipated that the feedstock for the project, natural gas, will be provided by Gasco (the
gas marketing arm ofEGPC, the government owned oil and gas company) under a Feedstock
Supply Agreement at an agreed price for the duration of the joint venture. Gasco has already
advised EATCO that is able to deliver the required quantities of gas (letter dated 20.10.98).
It is anticipated that such Feedstock Supply Agreement would include appropriate liquidated
damages payable by Gasco in the event of interruption in feedstock availability.
- Egypt has abundant reserves of gas: as of early 1999, Egypt's total proven gas reserves were
estimated at 31.5 trillion cubic feet (Tcf), up 54% from 20.4 Tcf in 1997, and more than
double the 15 Tcf of proven reserves in 1993. Reserves are expected to increase substantially
in the next few years. Most of this increase has come about as a result of new gas discoveries
in the Mediterranean offshorelNile Delta region, and increasingly in the Western Desert.
BankofAmerica. ~
~ -

EATeO- Suez Petrochemical Complex GTPProject
Suez, Egypt
Margin andPrice Volatility Risk
Section 6 Page 5
June, 2000
SPC would have the benefit of a low feedstock price relative to its naphtha-based
competition, providing additional margin during low cycles.
The flexibility to adjust the product mix between polyethylene and polypropylene would
enable SPC to adapt to market changes in order to maximize margins. The production of
lower value by-products is minimized compared to conventional cracking technologies.
Chemical Markets Associates Inc. (CMAI) has been retained as sponsor's market consultant
to review the product markets, and has provided market price projections for the Products
which have been used in the base case. The project is able to withstand the worst case market
price scenario forecasted by CMAI with an average DSCR of 1.34x and a minimum DSCR of
l.08x (see section 7.3 Sensitivity Analysis).
Sales Volume Risk
Due to the tariff advantages, SPC will be a low cost producer for the growing Egyptian
market and will therefore always be a supplier of choice in the market. SPC's marketing plan
is to maximise domestic sales and export the balance quantities of products, to ensure that
SPC will obtain the highest margins on product sales.
SPC is developing its marketing structure for sales in the Egyptian market; the personnel of
this structure will have previous commercial experience in the polyolefins industry.
For export sales SPC will either enter into a long-term offtake arrangements for the quantities
of products to be exported with a leading international PPIPE distributor/seller or include
such entity in its ownership with a significant stake.
Environmental Risk
The EPC contract will require the EPC contractor to achieve applicable environmental and
emissions standards.
An experienced international environmental firm, Nexant Inc., has been retained as
Environmental Consultant to undertake a Preliminary Environmental Impact Assessment
(PEIA or PEA) which has been completed. The preliminary finding ofthis PEA indicates that
the environmental impacts of the proposed project will meet the requirements ofthe Egyptian
Environmental Affairs Agency (EEAA) and comply with the guidelines of The World Bank
(WB) Pollution Prevention and Abatement Handbook, 1997 (PPAH).
BankofAmerica. ~
~ -

Suez, Egypt
Interest Rate Risk
SPC will put in place an interest rate hedging strategy to mitigate such risk.
Foreign Exchange Risk
Section 6 Page 6
June, 2000
Polyethylene and polypropylene prices are either denominated in, or linked to, u.s. dollars.
- It is expected that the EPC Contract will be predominantly U.S. dollar denominated as will
project operating costs (other than a 20% portion of Egyptian pound operating costs).
- There are no currency convertibility and profit repatriation restrictions in Egypt.
Political Risk
Egypt has demonstrated a high degree of political stability (rated BBB- by S&P and Bal by
Moody's).
The state of Egypt maintains good relations with regional countries.
The government of Egypt is actively encouraging and supporting private sector industrial
projects, especially those utilizing the abundant domestic reserves of natural gas, such as
petrochemical and LNG projects.
The part of project costs to be funded by ECA facilities would benefit, among others, from
political risk coverage.
Other Insurable Risks
SPC will be covered by a broad insurance package during construction and operations,
including contract works/property damage, delay in start-up, industrial all risks, business
interruption, machinery breakdown.
BankofAmerica. ~
~ -
EATCD - Suez Petrochemical Complex GTPProject
Suez, Egypt
Section 7Page 1
June, 2000
7.1
7.2
7.3
7.4
Key Assumptions
Base Case Results
Sensitivity Analysis
Economic Model
page 2
page 4
page 5
page 7
BankofAmerica. ~
~ -
Suez, Egypt
7.1 Key Assumptions

Section 7 Page 2
June, 2000
Based on infonnation currently available regarding selected Project variables (Project capital and
operating costs estimates, polyolefins market and price forecasts, finance plan assumptions,
tenns of financing), an economic and financial model was constructed by Bank of America to
evaluate the Project's viability.
7.1.1 Project Costs
Total Project Costs ofUS$ 1,254 million (including erected cost, license fees, catalyst and
adsorbent inventory costs, land costs, start-up and commissioning costs, pre-operational costs,
development costs and financing costs - see detailed breakdown in Section 4) are included in the
model.
7.1.2 Project Implementation Schedule
The following Project implementation timetable has been assumed in the Base Case:

to 31 Dec 2004
Note that the above timetable is purely indicative and preliminary at this stage.
7.1.3 Polyolefins Market and Price Forecast
The findings from the CMAI report, including size of the local market, potential export markets,
polyolefins prices for sales in Egypt and sales abroad, transportation costs, etc are reflected in the
model. Model assumptions that derive from the CMAI report are referenced to the specific page
of origin in the CMAI report. Market growth post 2010 is assumed to be equal to 5% p.a.
7.1.4 Operating Costs Assumptions
The main operating cost parameters estimated by DOP and Kvaerner (based on the estimated
guarantee perfonnance rather than expected perfonnance) are summarized in the following table:
BankofAmerica. ~
~ -
Operating Cost Cost / Unit (1999 US$) Quantity
Natural Gas US$ 1.00 I mm Btu 2.95 MM Nm
3
I day
Power US$ 0.03 I kWh 45 MWh/hour
Water US$ 0.60 1m
3
2,000 m
3
/day
Catalyst - steady consumption CONFIDENTIAL --
Catalyst - periodic replacement CONFIDENTIAL --
Chemicals US$ 0.75 mmI year --
Maintenance and Other US$ 13.2 mm/ year Includes insurance costs
Manpower See model Total workforce of 314 units

Suez, Egypt
7.1.5 Products
Section 7 Page 3
June, 2000
The production is assumed at the guaranteed production rate of 400,000 MTA oftotal
polyolefms divided into 200,000 MTA of polyethylene and 200,000 of polypropylene. Ofthe
polyethylene production, two thirds (i.e. 133,333 MTA) are assumed to be in the form of High
Density Polyethylene (HDPE) with the remaining one third (i.e. 66,666 MTA) in the form of
Linear Low Density Polyethylene (LLDPE) in line with the recommendations of the CMAI
report.
7.1.6 Finance Plan
In accordance with the Finance Plan outlined in Section 5, the sources of finance are assumed to
be as follows:
Source ofFunds
Debt
Commercial Facility
ECA Facility
Sub-total Debt
Equity
7.1.7 Economic Assumptions
Amount
Confidential
Confidential
US$ 877.8 mm
US$ 376.2mm
%
70%
30%
Variable
US$ inflation
US$LIBOR
Interest earned on cash balances
Assumption (% p.a.)
2.0%*
6.94%
US$ LIBOR- 2%
(*) All fixed and variable costs are indexed at the assumed inflation rate, which after an initial
period of oscillation is assumed to reach a steady state at 2.0% pa by 2004.
As revenues and the most significant cost component, feedstock cost, will be denominated in US
dollars, the financial projections are expressed in US dollars.
BankofAmerica. ~
~ -

Suez, Egypt
7.1.8 Working Capital Assumptions
Section 7 Page -I
June, 2000
Inventory, accounts receivables and accounts payable have been accounted for as follows:
Working Capital Assumptions
Inventory
Accounts Receivable
Accounts Payable
Days
21
60
45
7.1.9 Tax and Accounting Assumptions

Corporate Income Tax: The standard corporate income tax rate in Egypt is 32%; a tax
holiday of 10 years from the start of production is assumed to apply.
Withholding tax: the model does not reflect the cost of withholding taxes ("WHT") on
external interest payments, currently at 32% at the highest rate. The Egyptian parliament is
considering proposals to eliminate WHT; if such proposal is not approved, the WHT could be
eliminated or substantially reduced by booking loans in countries with favourable bilateral
tax treaties (such as Switzerland) or through certain bilateral or multilateral organizations.
Payment oftaxes: It assumed that corporate income tax for each accounting year is paid at
the end of the same accounting year
Accounting Period: The accounting period is the twelve months ending on 31SI December
each calendar year.
Depreciation: Assets are stated at cost less accumulated depreciation for wear and tear. All
capital expenditures are depreciated using the straight line method over their estimated useful
life (20 years). Tax depreciation is assumed to be equal to book depreciation.
Amortization: Capitalized interests and fees are amortized over a period of 10 years.
Dividend Policy: Dividends are declared at the end of each accounting period to the extent
that there is sufficient cashflow available from operations after the payment of all expenses,
taxes, debt service obligations and debt service reserve provisions and to the extent that there
positive retained earnings; no statutory reserve requirement is assumed.
7.2 Base Case Results
The Base Case Model uses the above assumptions to calculate internal rates of return (IRR) and net
present value ofproject cash flows for the assumed 25 year project economic life period and debt
service coverage ratios for the period during which debt is outstanding.
The IRR is calculated both for project cash flows and for equity cash flows both in nominal
terms (money ofthe day) and in real terms (1999 US dollar), the latter to eliminate the effect of
inflation. No terminal value is assumed.
BankofAmerica. ~
~ .
Project IRR intends to reflect the economics ofthe project as a venture without taking into
consideration the effect of financing on the cashflows. Project IRR is calculated both on a pre-tax
and post-tax basis.
Equity IRR intends to show the return to equity investors in the project; it is calculated on the
basis oftotal cash flow attributable to shareholders (i.e. cash flow post service of debt) and on a
dividend basis (i.e. dividend distributed to shareholders); note that the latter may vary if
alternative distribution mechanisms are put in place.

Suez, Egypt
The Base Case yields the following results:
IRR Nominal
Section 7Page 5
June, 2000
ProjectIRR
Equity IRR
Cash Flow pre-tax pre-fmance
Cash attributable to shareholders
16.6%
23.8%
7.3 Sensitivity Analysis

The following sensitivity analyses were performed. The results are included in the confidential
version ofthis report only.
Case 1 - Worst Case Market Prices
This case assumes the worst case market price scenario for the HDPE, LLDPE and PP as per
the CMAI worst case scenario for Western Europe.
Case 2 - Increased / Decreased Capital Investment
In order to model the effect of a potential cost overrun capital investment is assumed to be
10% higher (i.e. pre-finance project cost increased from US$ 1,069.2 mm to US$ 1,176.1
mm).
In order to model potential reductions in construction costs, capital investment is assumed to
be 10% lower (pre-fmance project cost at US$ 962.3 mm) is also modeled.
Case 3 - Reduced Feedstock Cost
The cost of feedstock (i.e. natural gas) is assumed to be at US$ 0.75 per million Btu which is
25% cheaper than in the base case (US$ 1.00 per million Btu).
Case 4 - Increased Electricity Cost
The cost of the electricity is assumed to be at US$ 0.08/kWh (rather than US$ 0.03/kWh in
the base case).
BankofAmerica. ~
~ -
Case 5 - Increased Production Capacity
This case shows the impact of producing 450 kMTA of polyolefins (compared to the base
case of 400 kMTA) in the same plant with no capital cost increase.

Suez, Egypt
Section 7 Page 6
June, 2000
Case 6 - Improved Performance

This case models the expected plant performance rather than the guarantee performance used
in the base case analysis. The expected performance requires only 2.79 MMNm3/day of
natural gas, 1861 m
3
/day of fresh water, and 42 MWh of electricity.
BankofAmerica. ~
~ -
Suez, Egypt
7.4 Economic Model

Section 7 Page 7
June, 2000
The economic model is included in the confidential version ofthis report only.
Bankof America. ~
~ -
Feasibility Study Report - Volume 1 ofl
Suez, Egypt
Section 8 Page 1
June 1000
8.1
8.2
8.3
8.4
8.5
8.6
8.7
Market Study
Polyolefin Market Overview
Polyolefin Product Supply &Demand
Polyolefin Prices
Raw Material Pricing & Availability
Competition
Projected Market Share
page 2
page 3
page 4
page 8
page 12
page 14
page 27
BankofAmerica. ~
~ -
Suez, Egypt
8.1 Market Study

Section 8 Page 2
June 2000
An independent polyolefins market study was perfonned by CMAI (Chemical Marketing
Associates, Inc.) for this feasibility study. The market study report includes the following sections:
Executive Summary
World Economic Outlook
Polyolefin Supply/Demand Analysis
Trade & Target Market Analysis
Polyolefin Price History & Forecast
Egyptian Polyolefin Market Analysis
Egyptian Polyolefm Marketing Plan
Olefms Production Technology Summary
Raw Material Availability & Pricing
Supply/Demand Balances for Polyolefins
Capacity Tables for Polyolefms
The market study report analyzes a period from 1990 through 2020 with an emphasis on the
Egyptian Polyolefin Market. The global and regional polyolefin markets are also considered in the
analysis. The results ofthe market study confinn the following infonnation:
a) The global and Egyptian economies are doing well and GDP growth is expected to continue.
b) Global demand for HOPE, LLDPE, and PP is expected to continue to exceed GDP growth
rates. Growth rates for these polyolefins in Egypt are even greater than the global growth rates
and the supply and demand balances indicate a need for an additional 640,000 MTA of
polyolefin production in Egypt midway through the study period. This capacity is in addition
to the planned production capacity that is currently under construction.
c) Raw materials are available for the project. Development ofEgypt's gas fields has more than
doubled the gas reserves in the five-year period ending in 1998. Gas production has reached
1,353 MMSCFD and planned gas production will nearly double this supply capacity in coming
years.
d) The official natural gas price in Egypt is 0.14 Egyptian pounds per standard cubic meter, which
is relatively low from a global perspective but at the high end for countries that are promoting
the use ofnatural gas for petrochemical feedstock.
e) Polyolefin product prices are increasing and the current cycle is expected to peak in 2004 or
2005. Beyond the current cycle the prices are expected to remain attractive.
BankofAmerica. ~
~ -
f) An Egyptian polyolefin producer should implement a marketing plan that includes;

Suez. Egypt
Section 8 Page 3
June 2000
- Establishing a domestic market position for the majority ofpolyolefin products. The
recommended product grades to target are LLDPE film and sheet grades, HDPE blowmolding,
injection molding, and film grades, and PP raffia, fiber and injection molding grades, as these
represent over 80% ofthe domestic markets.
- Targeting a logistically economic export market in nearby countries ofNorth Africa, the
Middle East and portions of Western Europe.
- Participating in the general export market is not anticipated.
- Developing a sales organization using the producer's own sales force for domestic sales in
Egypt and using agents for the target export markets.
The full market study report is included in the Appendix ofthe feasibility study report (confidential
version only). The information provided in this section ofthe feasibility study report is based on
the results ofthe CMAI market study report.
8.2 Polyolefin Market Overview
Polyethylene and polypropylene are two ofthe most widely used polyolefin products for
thermoplastics. Low-density polyethylene (LDPE) is used in the manufacture ofagricultural film
and packaging items. Linear low-density polyethylene (LLDPE) is used for the manufacture of
closures and lids. High-density polyethylene (HDPE) is used in the manufacture of containers,
boxes, plastic kitchen appliances, electrical wires, water and gas pipes. Polypropylene (PP) is used
in the manufacture ofpackaging, carpets, pipes, woven bags, and garden furniture.
The global polyolefin market is huge with current annual consumption amounts totaling over
50,000,000 Metric Tons per Annum (MTA) ofpolyethylene and over 28,000,000 MTA of
polypropylene. Both near and long term demand growth rates are forecasted to increase by more
than 5% per year, requiring the addition of new production capacity, especially in locations with
cost advantaged raw materials.
The Egyptian polyolefin market is characterized by CMAI as that of a developing country that has
progressed into the industrialized phase ofthe product chain. Per capita consumption of
polyolefins in 1998 was only 6 kg per person but as the Egyptian economy grows and modernizes,
the per capita consumption will increase. For comparison, per capita consumption ofpolyolefins
for North America and Western Europe are in excess of 60 kg per person.
Historically Egypt has relied on imports to supply the demand for polyolefins. Only recently is
capacity being installed to domestically produce polyolefms. Current demand is estimated by
CMAI at over 330,000 MTA of polyethylene and 140,000 MTA ofpolypropylene. The polyolefm
Bankof America. ~
~ -
market is growing rapidly in Egypt with growth rates averaging over 8% per year and there is a
need for additional polyolefin production to satisfy the expanding demand.

Suez, Egypt
Section 8 Page 4
June 2000
8.3 Polyoleim Product Supply & Demand

Polyolefin Demand
CMAI report the demand for polyolefins in Egypt amounted to just under 400,000 MTA in 1998.
Other sources indicate even larger demand exists, such as a United States Department of Commerce
report issued at the end of 1997 (Egypt - Plastic Materials and Resins - ISA971201, Market
Research Report, USDOC, International Trade Administration) that shows the demand of
polyolefins in Egypt already reached 600,000 MTA in 1996 and they forecasted similar growth
rates as CMAI. Chern Systems recently indicated the current demand is approximately 600,000
MTA, split about 50/50 between polyethylene and polypropylene (Chern Systems Annual
Petrochemicals Planning Seminar, Dubai, May 2000). CMAI believe these other estimates to be
overstated and for the purposes ofthis feasibility study, the in-depth analysis provided by CMAI
was used as the basis. It is recognizedthat this is the most conservative estimate ofmarket demand
andthere could be a significant upside potential.
By the year 2005 CMAI expect the demand to approach 700,000 MTA and it will grow to almost
1,000,000 MTA by the end ofthis decade. The growth is primarily expected to occur in the
markets for LLDPE, PP, and HDPE.
Although LDPE shares a large portion ofthe current polyethylene market in Egypt, the demand for
LDPE is not expected to increase very much. The current demand for LDPE is driven by the lack
ofnewer processing equipment in Egypt. However, as the demand for polyethylene increases,
processing equipment will be purchased that is geared to run the newer LLDPE. This will allow
LLDPE to capture a large share ofthe future polyethylene market together with HDPE.
BankofAmerica. ~
~ -

Suez, Egypt
Section 8 Page 5
June 2000
Egypt Polyolefin Demand
IIPP
EillLLDPE
EillHDPE
.LDPE
Average Annual _
Growth Rates
PP = 9.0% -------
LLDPE = 10.8%
HDPE = 8.5%
LDPE=2.6%
1000..,...------------------,
900
800
~ 700
~ 600
-0 500
=
= 400
E
Q 300
200
100
o
1998 2005 2010
Source: CMAI
Polyolefin Supply
Years
The current demand for polyolefins in Egypt is supplied entirely by imports from Saudi Arabia,
USA, Italy, Spain, Qatar, Germany, and others. Projects are planned to install polyolefm
production capacity in Egypt within the next few years.
Two projects are currently under construction to produce polyolefins in Egypt and thereby reduce
the dependence on imports:
SIDI KERIR PETROCHEMICALS Co.: The first project is a private sector polyethylene plant
being installed in the Alexandria region. This plant has a nameplate capacity of200,000 MTA
ofpolyethylene and is expected to come on-stream by 2001. The plant uses BP polyethylene
technology and can swing between HDPE and LLDPE products. The ethylene feed will be
supplied by a gas (primarily ethane) cracker being installed in the Alexandria region by the Sidi
Kerir Petrochemicals Company (SIDPEC). This project is referred to as the SIDPEC Plant in
this report.
ORIENTAL PETROCHEMICAL COMPANY: The second project is a polypropylene plant

being installed by the Oriental Petrochemical Company (OPC) in the Suez region. This plant
has a nameplate capacity of 120,000 MTA ofpolypropylene and is expected to come on-stream
by 2002. The OPC plant uses Unipol technology and is expected to focus on the production of
Bankof America. ~
~ -
raffia and fiber grades ofpolypropylene. The propylene feed source is undetermined at this
time. This project is referred to as the OPC Plant in this report.

Suez, Egypt
Section 8 Page 6
June 2000
The Suez Petrochemical Complex GTP project is expected to come on-stream by 2005 with a
nameplate capacity of200,000 MTA polyethylene and 200,000 MTA polypropylene. The figures
on the following page showhow the planned production capacity, including the aforementioned
projects, compares with the polyolefin demand forecasts for Egypt.
For polyethylene, there is no production ofLDPE planned for Egypt so the market for polyethylene
production is mostly limited to HDPE and LLDPE consumption. It is possible that a portion ofthe
polyethylene products produced by the SIDPEC plant and the SPC plant can be marketed as
replacement material to displace a portion ofthe LDPE market. In this case there could be some
market potential beyond the HDPE & LLDPE markets. The "error bars" shown in the polyethylene
demand graph represent the potential demand for HDPE & LLDPE assuming 50,000 MTA could
be sold as LDPE replacement material. The degree of domestic market penetration achieved for
both projects will dictate the amount of polyethylene that would be available for export, if any.
For polypropylene, there is a potential over-capacity ofabout 120,000 MTA in the year 2005.
However, ifother sources were more correct in estimating the current consumption of
polypropylene in Egypt at over 300,000 MTA then there would be no over-capacity. The "error
bars" in the polypropylene demand graph on the following page represent this higher demand
estimate. In any case, the degree ofdomestic market penetration achieved for the OPC and SPC
projects will dictate the amount of polypropylene that would available for export during the initial
production years. It may be beneficial to take advantage ofthe flexibility ofthe MTO process to
shift the SPC production towards making more polyethylene and less polypropylene during these
initial years.
Bankof America. ~
~ -

Suez, Egypt
Egypt Polyethylene Demand & Production Capacity
Section 8 Page 7
June 2000
700
600
..
:; 500
,.
..
~ 400
'"
=
'"
~ 300
=co
'"
g 200
.;
100
o
/1
~ T I
~ YI
~ T T
~
I
,/' !
i
~ T ~
I
i
~ V l ~
I
~
I
_ PE Capacity
Source: CMAI & others
-+- HD & LLD PE Demand --- Total PE Demand
Egypt Polypropylene Demand & Production Capacity
500
450
..
400
co
...
350 ,.
..
~ 300
'"
=250
'" E-
"C
200
=
1ll
ISO
=
'" .;
100
SO
0
v
v
--
v
~ , . . . -
..---'
l - - - ' ~
-
,...---;V
Source: CMAI & others

_PP Capacity ---PP Demand
BankofAmerica. ~
~ -

Suez, Egypt
8.4 Polyolefin Prices
Section 8 Page 8
June 2000
Historical and forecasted polyolefin prices, as reported by CMAI are provided in the graphs on the
following pages ofthis section. The averaged historic and forecasted prices are summarized in the
tables below.
Polyolefm Prices - Current Dollars (US)
HDPE LDPE LLDPE PP
Historic Forecast Historic Forecast Historic Forecast Historic Forecast
Average Average Average Average Average Average Average Average
U.S. Gulf Coast 795 930 834 1005 734 882 729 820
West Europe 899 996 866 1013 824 944 783 922
Asia 770 962 810 989 745 915 747 892
Egypt 993 1053
--- --- 942 992 898 975
Historic prices are averaged from 1990 through 1999 except for Egypt, which is 1995 through 1999.
Forecast prices are averaged from 2000 through 2020.
Polyolefm Prices - Constant 1999 Dollars (US)
HDPE LDPE LLDPE PP
Historic Forecast Historic Forecast Historic Forecast Historic Forecast
Average Average Average Average Average Average Average Average
U.S. Gulf Coast 873 745 915 806 807 706 805 657
West Europe 996 795 956 809 911 754 863 736
Asia 852 767 897 789 826 730 827 713
Egypt 1022 871
--- --- 971 822 927 800
Historic prices are averaged from 1990 through 1999 except for Egypt, which is 1995 through 1999.
Forecast prices are averaged from 2000 through 2020.
The polyolefm pricing in Egypt is estimated by CMAI to approximate North West European F.O.B.
pricing, plus the import duty of 17% in Egypt. As a domestic producer of polyolefins, SPC would
benefit from a higher netback price for domestic sales so the Egypt market is the preferred outlet for
the SPC products.
BankofAmerica. ~
~ -
June 2000
Section 8 Page 9
I
I
I
Current Dollars
WORLD HOPE PRICE COMPARISON
I
I
i
1 Dollar per Ton
!1400 T"i----------j------------------
i I
!1200 i
l
, Forecast ....
i \ .\
11000 '".:.:... . .
I 800 -\ ; t:: "';-j .
i 1-0 I;'.
600 . . . .
Suez, Egypt
400
200
o +J!
1990 1993 1996 1999 2002
c::J USGC-Domestic
- West Europe-Domestic
-HK
2005 2008 2011
_ USGC-Export
-SEAFOB
2014 2017 2020
MAl
Dollar per Ton
WORLD LLDPE PRICE COMPARISON
Current Dollars
Forecast
1400
i
I
1200 11 .

\ ..
1000 .:-f. -.- - - -.. -.-:.;.;,;,;,.;..;",- .. . . .
, V \ .-:
800 f\'.\l ., -- -bj .. .. .. .. ..
I ,\.
600 J,.,
400
200

1990 1993 1996 1999 2002
c::J USGC-Domestic
-HK
2005 2008 2011
_ USGC-Export
-SEAFOB
BankofAmerica. oS::-

Feasibility Study Report - Volume 1 ofl

EATeO - Suez Petrochemical Complex GTPProject
Suez, Egypt
Section 8 Page 10
JunelOOO
Dollar per Ton
WORLD LOPE PRICE COMPARISON
Current Dollars
1400 TI---------+-------------------.
i Forecast
1200 1.... -.. -------.... -.. -- -. --- ----. --.. -.. -.. -- ... --- .-- ------ -- ----- -.... -- ---------. -.. -.... --. -... -- --- --- ---;'!'::;:--
I
I -
1000 r -.. ------ .. -- .. -----
800 ... ... -- .. . .\; -- .- ];
600
1993 1996 1999 2002
400
200 J
o +!
1990
Cl USGC-Domestic
-HK
2005 2008 2011
II!iiI!I USGC-Export
-SEA FOB
2014 2017 2020
WORLD POLYPROPYLENE PRICE COMPARISON
Dollar per Ton Current Dollars
1200 -,---------j---------------------,
1000
800
600
400
200
1993 1996 1999 2002

1990
Cl USGC-Contract
- West Europe-Contract
-SEA Spot
2005 2008 2011
Il!IllIilUSGC-Spot
- SEA Contract
2014 2017 2020
DY'AI
BankofAmerica_


Suez, Egypt
Section 8 Page 11
June 1000
Domestic Egyptian Polyolefin Prices
Current Dollars
2020
........
2015
-k- PP I
2010
----LLDPE
2005
Averages
HDPE=$1039
-+---------- ------I
LLDPE=$981
PP = $958 ----j
1400
1200
=
1000
~
800 I-
~
C.
'" 600
l-
S
Q
Q
400
200
0
1995 2000
Source: CMAI
--HDPE
Domestic Egyptian Polyolefin Prices

Constant 1999 Dollars
'\
6
~ ,
~
...~ ...,.H__ZH_
-""
...'
.. -_.. -..............
l . ~ l
" /
~ " - i .
Averages
HDPE = $906
LLDPE=$856
PP= $829
I --HDPE -- LLDPE -,.- PP I
1,400
1,200
=1,000
Q
Eo-
~ 800
c.
~ 600
S
~ 400
200
o
1995
Source: CMAI
2000 2005 2010 2015 2020
BankofAmerica. ~
~ -

Suez, Egypt
8.5 Raw Material Pricing & Availability
Natural Gas Supply:
Section 8 Page 12
June 2000
Natural gas demand has grown rapidly in Egypt due to the government encouraging the use ofit
over refmed oil products. In 1985 natural gas provided 13.9% of the primary energy supply in
Egypt and oil accounted for 77.0%. By 1996 the share ofprimary energy supplied by natural gas
had grown to almost 31% and the share from oil decreased to about 62%.
The main consuming sectors for natural gas are power generation (60%) and the fertilizer industry
(14%) where it is used for feedstock and fuel. Demand is expected to continue to grow as gas is
targeted for use in new power generation plants and heavy industrial projects.
Oil companies only started active exploration for natural gas in Egypt within the past ten years.
Egypt was faced with declining oil reserves and concems of becoming a net oil importer in the
future so they provided incentives to attract more oil and gas development. This exploration
resulted in large increases in gas reserves although only minor increases in oil reserves. Gas
reserves more than doubled from 15.4 Tcf (trillion cubic feet) in 1993 to 31.5 Tcf at the end of
1998. Oil reserves on the other hand only increased from 3.3 billion barrels in 1994 to 3.5 billion
barrels at the end of 1998.
Egypt's ultimate gas reserve potential is estimated at between 70 to 100 Tc The current estimates
ofproven reserves vary from 33 Tcfto 40 Tcf. Within the next decade it is projected that the
proven reserves could increase to 50 Tcf.
Egypt's dry natural gas production has been steadily increasing and reached 1,353 MMSCFD
(million standard cubic feet per day) by early 1999. With the recent development ofa number of
gas fields in the Nile Delta region and Western Desert region, gas supplies in excess of2,500
MMSCFD are planned.
The SPC project will consume 104 MMSCFD of natural gas. Given the abundant amount of
proven reserves and recent gas field developments, there will be a long-term supply offeedstock
available for the SPC project. Furthermore, the SPC project enables the production ofpolyolefins
without drawing further on the consumption of oil refined products.
Natural Gas Prices:
Over the past twenty years methanol production has been shifting from the industrialized countries
ofNorth America, Western Europe and Japan to locations with cost advantaged natural gas. These
locations include the Middle East, South America, the Caribbean, Equatorial Guinea, and New
Zealand. Many ofthe countries in these regions have established low natural gas prices to promote
Bankof America. ~
~ -
the development of petrochemical industries and monetize their natural gas reserves. These
countries have natural gas prices between $0.25 to $1.00 per million Btu.

Suez, Egypt
Section 8 Page 13
June 2000
Natural Gas prices in Egypt are influenced by two key considerations; one relates to the price at
which gas is sold by the producer to EGPC and, the second relates to the price at which gas is
purchased by the consumer.
Producer gas pricing has been linked to the Gulf of Suez crude oil price and depending on the
prevailing price of crude oil, the producer could receive a very high price for natural gas (over
$3.00IMMBtu).
Consumer gas pricing has been controlled and subsidized by the government. The current state-
controlled price for natural gas is reported as 0.14 Egyptian pounds per standard cubic meter of gas.
This equates to about $1.16 per thousand standard cubic foot (MSCF). Assuming a heat value of
1000 Btu/SCF, this price is equivalent to $1.16/MMBtu.
Discussions with GASCa in Egypt have confirmed that a price of $1.00 IMMBtu or $1.00/MSCF
is available for the SPC project.
Co-Monomer Supply and Pricing:
Linear alpha-olefins (butene-l and hexene-l) will be used as co-monomers in the production of
LLDPE and HDPE. The density ofthe polyolefm product is determined by the concentration of
co-monomer in the polymer chain. Higher concentrations of co-monomers reduce the density of
the resin. In addition to controlling the density, co-monomers modify the processing and
mechanical properties ofthe polymer.
The CMAI market study identifies the major producers of alpha olefins in the world. CMAI
reported that there should be an adequate supply of alpha olefins available for the SPC project
based on the forecasted operating rates for these producers. The supply will be available from
Europe, South Africa, the U.S. or possibly the Middle East.
It is desirable to enter into long-term pricing contracts for the supply ofthe alpha olefins. CMAI
provided estimated price ranges for alpha olefins in relation to the price of ethylene for the U.S.,
Europe, and the rest ofthe world. The pricing for butene-l ranges from $110 to $220 per metric
ton over the price of ethylene. The pricing for hexene-l ranges from $265 to $375 per metric ton
over the price ofethylene.
Bankof America. ~
~ -
Feasibility Study Report - Volume J of2
Suez, Egypt
8.6 Competition
Section 8 Page 14
June 2000
The gas to polymers (OIP) approach using the UOPIHYDRO MID process offers a new means to
produce polyolefins. Most polyolefins are produced from olefins derived from conventional steam
cracking of ethane or naphtha. The second largest sources ofolefms for petrochemicals are oil
refmeries that recover olefms as a byproduct ofmotor fuel production. Propane dehydrogenation
using UOP's Oleflex process also produces a significant and growing share ofpropylene for
polypropylene production. All ofthese methods utilize different feedstocks andproduce different
product mixes so the choice ofwhich processing scheme is bestfor a given project is primarily
driven by the availability ofcost advantagedfeedstocks and the demands ofthe desiredproduct
markets.
The graph below illustrates the differences in the product mix between the various routes to
produce olefins as a key product. Each ofthese options can offer competitive economics under the
right conditions as discussed later in this section. The comparison is made at capacities of 400,000
MIA oflight olefins (ethylene plus propylene) to provide a common basis. These mayor may not
be the most economical capacities for each processing scheme but the total light olefm capacity of
400,000 MIA offers good economics and fits well with the size ofthe polyolefin market in Egypt.
Product Mix Comparison
at 400 kMTA Ethylene + Propylene
1000 .,...-------------------,
900 +------------------J
800 +------------
700 +------------
600 +--------
500
400
300
200
100
o
Ethane Propane Propane Naphtha Gas to
Cracker Dehydro Cracker Cracker Olefins
Source: CMAI (Crackers) & UOP (propane Dehydro & Gas to Olefins)

.H2
Fuel Oil
DC5toC9
o Mixed C4's
Propylene
C2=/C3= Swing

Bankof America.


Suez, Egypt
Feedstock Utilization:
Section 8 Page 15
June 2000
The main feedstock alternatives for olefin production consist ofmethane (natural gas), ethane,
propane, and naphtha. Methane, ethane, and propane are primarily supplied by gas plants that
gather, condition and refine raw natural gas. The composition ofraw natural gas varies widely but
it predominantly consists ofmethane. If the raw gas is "rich" in ethane, propane and possibly even
butanes and naphtha, these components can be recovered as separate natural gas liquids. Ifthe gas
is "lean" then the recovery ofnatural gas liquids can be costly and produce huge amounts of
methane-rich natural gas byproduct. Naphtha is supplied from crude-oil refining and natural gas
liquid. The alternatives for utilizing these various feedstocks for olefm production are discussed
below.
Ethane: Ethane charged to cracker furnaces produces ethylene with relatively few byproducts.
Propylene is not produced in an amount substantial enough to justify propylene recovery and
purification so it is generally included in the byproduct fuel. Ethane crackers are less complicated
and costly than LPG or liquid crackers and they produce a single key product. Ethane crackers
consume about 1.3 tons ofethane per ton of light olefm so they offer high selectivity compared to
other ethylene plants. Ethane is the most desirable feedstock for crackers due to the high yield of
ethylene however, availability can be limited in locations where the natural gas composition is lean.
Ifpropylene production is desired then a different feedstock and/or process is required.
Propane: Two options exist for utilizing propane for olefm production.
The first option is to charge it to an Oleflex propane dehydrogenation process where it is
selectively converted to propylene. Approximately 1.2 tons or propane are consumed per ton of
propylene. Ethylene is not produced in a significant amount. Oleflex offers an economical
means to produce on-purpose propylene and it is steadily gaining a larger share ofthe propylene
production market for petrochemicals.
The second option for propane is to charge it to an LPG cracker. The LPG cracker produces
both ethylene and propylene but also a large excess of fuel gas (methane) and numerous other
byproducts. Propane consumption is about 1.7 tons ofpropane per ton of light olefm. The mix
between ethylene and propylene is fixed at a ratio of about 2.5 to 1 with little flexibility to
change the product mix.
Naphtha: A naphtha cracker produces ethylene and propylene at a ratio of about 1.9 to 1 with little.
flexibility. A large amount ofbyproducts are also produced and these must be sold at high market
values in order to afford economic operations. The feedstock requirement is about 2.2 tons of
naphtha per ton of light olefin. A major byproduct of naphtha crackers is pyrolisis gas or PyGas,
which contains high amounts of benzene, toluene, and xylenes (BTX). These components can be
treated and recovered for other petrochemical uses however catalytic reforming of naphtha offers
much higher BTX yields than naphtha cracking. Alternatively, Pygas is sometimes blended into
Bankof America. ~
~ -
motor fuel (gasoline) products but this practice is becoming less viable as more countries adopt
regulations that place restrictions on the concentration of benzene and/or aromatics in gasoline.

Suez, Egypt
Section 8 Page 16
June 2000
Natural Gas: Until recently, the production oflight oletins from natural gas was not an option. Gas
to liquids technologies had been practiced for many years but these plants produce fuel products
such as gasoline, diesel, kerosene, and gasoil instead oflight olefins. The UOPIHYDRO MTO
process is the first to offer economical high selectivity to ethylene and propylene. The combination
ofthe MTO process with methanol synthesis technology enables cost effective production of light
olefins from natural gas (GTO). The MTO or GTO plant offers flexibility to adjust the ratio of
ethylene to propylene anywhere between 1.5 to 1 (high ethylene mode) to 0.7 to 1 (high propylene
mode). The GTO feedstock requirement is approximately 1.8 tons of natural gas per ton of light
olefm based on conventional methanol technology.
Economic Comparison
The availability of cost advantaged feedstock and the demand for particular products primarily
drive the choice ofthe processing schemes discussed. Each process must also offer competitive
economics to be viable so it is appropriate to compare the economics ofeach option.
CMAI provided economic analyses for the three different types of "cracker" based complexes for
producing 400,0000 MTA ofpolyolefms. The same methodology was applied for an Oleflex
Propane Dehydrogenation (PDH) based complex and a Gas to Olefms (GTO) based complex for a
direct comparison. Capital costs were adjusted for a 1999 Middle East basis and to correspond with
project scopes similar to the CMAI cracker models. The operating costs and product revenues were
based on the same price sets and model data used by CMAI for the cracker models. Product prices
were modeled based on the forecasts provided earlier in this section. Feedstock and byproduct
prices are shown on the following page.
BankofAmerica. ~
~ -

Suez, Egypt
Section 8 Page 17 .
June 2000
Feedstock Prices - Egypt Polyolefin Complex
U.S. Dollars per Metric Ton
$250...----------------,
$200 + - - - . . - - - - - . , . - - - - - - - - - - ~ ~
--Propane
-- Full Naphtha
--- Ethane
--Nat. Gas
2015 2010 2005 2000
$0+------.-----.----,.-----1
1995
$100 +---L----==a--'_=_===----------;
Source: CMAI
Byproduct Prices - Egyptian Polyolefin Complex
U.S. Dollars per Metric Ton
$250 ...------------------,
$200 4-------------=-=----I
$1004--::---+-------------3.
------'
_..------:::
I= = ~ . r - - . . . . ~ ~ = = = = = = = = - - ~
$50 -F
--Pygas
--Hydrogen
-- Crude C' 4s
~ 400+ Pyr F.O.
-Fuel Gas
Source: CMAI
2015 2010 2005 2000
$0 +-------,---.,-----,------,------1
1995
BankofAmerica. ~
~ -

Suez, Egypt
Feedstock Prices
Section 8 Page 18
June 2000
The prices shown on the previous page were provided by CMAI and are based on the following:
Natural Gas - Equivalent to $1.04 per MMBtu with adjustments for inflation.
Ethane - Shrinkage value (the energy equivalent ofthe ethylene removed from a gas stream
with an assumed value of$I.04/mmBtu) plus a $40 per ton extraction fee, and adjusted for
inflation.
Propane - Northeast Asia (major destination for export) forecasted pricing less freight
(-$48/MT freight charges) for a net-back equivalent delivered price
Naphtha- West Europe (major importer) forecasted pricing less freight (-$29/MT freight
charges) for a net-back equivalent delivered price
Further details on the model assumptions are provided in the CMAI Market Study.
GTP Capital Cost
For the GTO based complex, the capital cost was determined by adjusting the estimated erected
cost developed for the Suez Petrochemical Complex as follows:
Total Capital Investment:
GTP ISBL EEC (1999 Basis) =
GTP OSBL EEC (1999 Basis) =
Total EEC (1999 Basis) =
Initial Catalyst Inventories =
Misc. Owner's Cost Allowance =
$489.4MM
$214.8MM
$704.2MM
$35MM
$20MM
Total Capital Investment (1999 Basis) = $759.2 MM

License fees are included on an amortized basis in the fixed costs ofproduction to be consistent
with the CMAI methodology. Other capital costs such as pre-completion interest, duties, insurance,
finance fees, are excluded to maintain a similar scope for comparison purposes. Although these
BankofAmerica. ~
~ .
costs influence the absolute investment returns, they do not significantly change the relative
differences seen by comparing the plant options.

Suez, Egypt
Section 8 Page 19
June 2000
The economic analyses are provided in the tables on the following pages. These tables provide a
year-by-year analysis to demonstrate how the costs ofproduction and investment returns vary
throughout changing market conditions. Cash flow analyses are also provided for projects
beginning production in the year 2006. It is preferable to commence operation during the years of
2004 or 2005 to capture the peak years ofthe current polyolefin market cycle. The year 2006 was
selected to intentionally miss the market cycle and base the results on the long-term trend forecasts.
The results ofthe analyses are compared below:
Olefin Source: Ethane Propane Propane Naphtha Gas To
Cracker Dehydro Cracker Cracker Olefms
Feedstock Ethane Propane Propane Naphtha Nat. Gas
Key Products
Polyethylene 400kMTA --- kMTA 286kMTA 262kMTA 200kMTA
Polypropylene --- kMTA 400kMTA 112kMTA 136kMTA 200kMTA
Total 400kMTA 400kMTA 398kMTA 398kMTA 400kMTA
NetCCOPI $407 $483 $528 $499 $425
MT Polyolefm
Investment $687MM $555MM $681 MM $722MM $759MM
(1999)
IRR 21.1% 21.2% 16.3% 15.5% $17.3%
*"Net CCOP" means the average Cash Cost of Production after applying byproduct credits
over the analysis period (1995 through 2015). It includes the cost ofraw materials, utilities,
catalyst and chemicals less byproduct credits.
Ofthe five options considered, the Ethane Cracker and Oleflex PDH based complexes provide the
highest returns on investment but these are only marginally higher than the GTO based complex.
The Ethane Cracker complex offers a low cost of production for polyethylene. The Oleflex PDH
complex offers the lowest capital investment and lower cost ofproduction for polypropylene than
either a propane cracker or a naphtha cracker complex.
The GTO based complex requires marginally higher capital investment than the cracker based
complexes but it offers much lower costs of production that are matched only by an Ethane
Cracker. This enables the GTO based complex to remain profitable and competitive throughout
market cycles. Furthermore, the GTO based complex is the only option offering flexibility to
greatly adjust the product mix between polyethylene and polypropylene which makes it even more
adaptable to changing market conditions.
Bankof America. ~
~ -

Suez, Egypt
Net Cash Costs of Production
Dollars per Metric Ton of Polyolefin
Section 8 Page 20
June 2000
$700
$650
$600
$550
$500
$450
$400
$350
$300
1995 2000 2005 2010
Source: CMAI (Crackers) & UOP (PropaneDehydro & GTP)
2015
-- Propane Cracker
-- Naphtha Cracker
-- Propane Dehydro
-GTP
....... Ethane Cracker
Includes Credits for
Cracker Byproducts
The variations ofthe net cash costs ofproduction over time are shown in the graph above. The
main factor in the cash cost ofproduction is the feedstock costs. Naphtha and propane prices tend
to be more volatile than natural gas prices. The price of ethane is tied to the natural gas price in
these models so it follows that the GTO and Ethane Cracker experience relatively stable production
costs. The natural gas and ethane based routes enjoy the security oflowproduction costs.
It is prudent to also consider the impact of capital charges on the full costs ofproduction. Based on
the 1999 capital investment costs, adding a 20% return on capital to the net cash costs ofproduction
yields the following results on a dollar per metric ton ofpolyolefin basis: Ethane Cracker = $751,
Propane Dehydro =$761, Propane Cracker =$870, Naphtha Cracker =$862, and GTO =$804 per
metric ton. In this case, the lower capital cost associated with the Propane Dehydro based complex
provides a full cost of production for polypropylene that is about equivalent to the full cost of
production for polyethylene in the Ethane Cracker based complex. The higher capital cost
associated with the GTO complex places a slightly greater capital burden on the full cost of
production for GTP relative to the other plants but the production cost remains well belowthe
Propane Cracker and Naphtha Cracker based complexes.
BankofAmerica. ~
~ -

Suez, Egypt
Economy of Scale
Section 8 Page 21
June 2000
World-scale Naphtha Cracker projects are currently considered to have capacities in excess of
500,000 MIA ofethylene. Such large projects offer economies of scale that help reduce the costs
ofproduction but they require huge investments, demand large product offtake arrangements, and
consume vast amounts ofnaphtha. It is only by achieving such large scale that a naphtha cracker
can be competitive on a cost ofproduction basis.
Gas to Olefin based projects can be built on a similar scale and enjoy the same benefits oflower
costs of production but a key difference is that a GIO based plant is also competitive on a smaller
scale. This is evident in the previous section and it allows an excellent fit between single train
capacities for methanol processes and polyolefin processes in a Gas to Polyolefms plant.
Conclusions
The key advantages ofconverting natural gas to oletins or polyolefins are;
1. Strategic utilization ofnatural gas reserves with high value added products.
2. Flexibility to produce polymer-grade ethylene and propylene in proportion to the market
demands.
3. Lower costs of production and better economics than liquid crackers.
4. Production cost stability with independence from market cycles for crude oil, aromatics,
butadiene and other cracker byproducts.
Bankof America. ~
~ -

Suez, Egypt
Ethane Cracker Model - CONFIDENTIAL
Section 8 Page 22
June 2000
BankofAmerica. ~
~ -

Suez, Egypt
Oleflex PDHModel- CONFIDENTIAL
Section 8 Page 23
June 2000
BankofAmerica. ~
~ -

Suez. Egypt
Propane Cracker Model - CONFIDENTIAL
Section 8 Page 24 .
June 2000
BankofAmerica. ~
~ -

Suez, Egypt
Naphtha Cracker Model - CONFIDENTIAL
Section 8 Page 25
June 2000
BankofAmerica. ~
~ -

Suez, Egypt
GTP Model - CONFIDENTIAL
Section 8 Page 26
June 2000
Bankof America. ~
~ -
Suez, Egypt
8.7 Projected Market Share

Section 8 Page 27
June 2000
Domestic Egyptian Market

Most ofthe products from the SPC plant will be sold domestically in Egypt. During the fIrst few
years of operation it is expected that a portion ofthe products will be exported due to the limits of
domestic demand and the existence ofthe SIDPEC polyethylene and OPC polypropylene plants.
The exports will be targeted for markets that provide logistic economic advantages compared to the
traditional "deep water" markets. As the domestic polyolefm markets grow, they will become large
enough to consume all ofthe products from the SPC project as well as the other domestic
producers. This is expected within fIve to eight years from the start ofproduction for the SPC
project.
CMAI expect that Egyptian producers will be able to capture from fIfty to seventy-fIve percent of
the domestic polyolefm markets within the fIrst few years ofproduction. It will not be practical to
capture the entire market because the various resin types required would be too numerous for
economical production and marketing.
The estimated market share projections shown in the fIgures on the following pages were
developed based on CMAI's capacity, demand and operating rate forecasts, combined with the
expectation for capturing 50 to 75% ofthe market demand that is unmet by the existing producers.
Export Market
The most promising export destinations will be those countries to which Egypt can provide good
distribution economics. CMAI report these countries include; Algeria, Libya, Morocco, Tunisia,
Turkey, Israel, Jordan, Iraq, Syria, Italy and Greece.
CMAI believe it will not be necessary to enter the general export market due to the size ofthe
domestic market in Egypt and the peripheral export market identified in the previous paragraph.
Bankof America. ~
~ -

Suez, Egypt
Estimated Market Share for HDPE in Egypt
Year 2005
Section 8 Page 18
June 1000
Suez PC
44%
Imports
24%
Total Demand = 222,000 MTA

Suez PC Exports = 35,100 MTA
Estimated Market Share for HDPE in Egypt
Year 2010
Suez PC
44%
Imports
26%

Suez PC Exports = 0 MTA
BankofAmerica, ~
~ -

Suez, Egypt
Estimated Market Share for LLDPE in Egypt
Year 2005
Section 8 Page 29
June 2000
Suez PC
20%
Imports
11%
SIDPEC
69%
Estimated Market Share for LLDPE in Egypt

Year 2010
Imports
11%
Suez PC
33%
BankofAmerica. ~
~ .

Suez, Egypt
Estimated Market Share for PP in Egypt
Year 2005
Imports
20%
Suez PC
38%
Estimated Market Share for PP in Egypt
Year 2010
Imports
17%
Section 8 Page 30
June 2000
Suez PC
52%

BankofAmerica. ~
~ -

Suez, Egypt
Section 9 Page I
June, 2000
9.1
9.2
9.3
9.4
9.5
Process Descriptions
Process Flow Diagrams (Simple)
Process Experience Lists
Operating Costs & Utilities
page 2
page 9
page 19
page 28
page 32
BankofAmerica. ~
~ -
Suez, Egypt
9.1 Process Descriptions

Section 9 Page 2
June, 2000
The following describes the processes to be utilized in the GTP Project.

Methanol Production
The process route consists of the following five main steps to produce methanol:
Feedstock Desulfurization and Saturation
Synthesis Gas Production and Heat Recovery
Synthesis Gas Compression
Methanol Synthesis
Distillation
Natural gas feedstock is desulfurized, saturated with steam in the saturator, pre-heated, pre-
reformed and then mixed with remainder ofprocess steam to achieve the desired steam to carbon
ratio. The mixed feed is further heated and then introduced into the Reformer.
The steam/natural gas feedstock mixture reacts in the reformer and produces synthesis gas. A
considerable amount of waste heat is available from the synthesis gas, which is utilized by raising
steam, preheating boiler feed water and preheating demineralized water. Waste heat from the
reformer flue gas is recovered by preheating feedstock, raising and superheating steam and
preheating combustion air.
Cooled synthesis gas is compressed and mixed with circulating gas in the methanol synthesis loop.
After synthesis and heat exchange, crude methanol is condensed and separated. A continuous loop
purge is maintained to keep the inerts at a level suitable for satisfactory methanol production. The
purge gas is used as reformer fuel, as a hydrogen source for desulfurization and as a hydrogen
source for the PSA Unit to supply the hydrogen requirements for the PPIPE Plants.
Light end gases are separated from the crude methanol in the Topping Column to obtain the crude
methanol product. The crude methanol product is then cooled and sent to Storage.
Methanol to Olefins
The UOPIHYDO MTO Process consists ofthe following main processing steps:
Methanol Feed Vaporization
Reactor & Regenerator
Product Cooling & Water Removal
Compression
Oxygenate Recovery
BankofAmerica. ~
~ -

Suez, Egypt
Impurity Removal
Fractionation & Purification
Section 9 Page 3
June, 2000
The methanol feed is preheated primarily by heat exchange with the reactor effluent product
streams. A portion ofthe methanol feed is first routed through the oxygenate recovery section
before recombining with the rest ofthe methanol feed. The combined methanol feed is vaporized
by further heat exchange prior to entering the MTO Reactor.
The reactor is a fluidized catalytic type. It consists ofa feed distributor, a fluidized bed ofcatalyst,
and vapor/catalyst disengagement devices. A small amount ofcoke is accumulated on the catalyst
as a byproduct ofthe MTO reactions. Therefore, the catalyst is continuously regenerated by
combusting the coke with air in the regenerator to maintain catalyst activity. The regenerator
similarly includes a fluidized bed of catalyst and vapor/disengagement devices. The regenerator
flue gas is cooled to recover heat and then catalyst fmes are removed prior to venting to the
atmospheric flue gas stack.
The reactor effluent stream is partially cooled by heat exchange, transferring heat to the methanol
feed. The effluent is further cooled and byproduct water is condensed and stripped to remove
hydrocarbons. After water removal, the eflluent product is compressed and treated to recover small
amounts of oxygenates that are returned to the reactor for more complete conversion to light
olefins.
After the oxygenate recovery section, the eflluent is caustic scrubbed to remove carbon dioxide and
then dried to remove moisture. The effluent is further processed in the fractionation and
purification section to separate the key products from the byproduct components. Trace impurities
are removed in this section using conventional technologies for diolefin saturation and oxygenate
removal. The ethylene and propylene are produced as polymer grade products and sent to
intermediate storage.
Polypropylene Unit
The plant will be based on the well proven UNIPOL Polypropylene process licensed by UCC. The
technology comprises ofthe fluidised bed and catalyst technologies ofUCC. The plant is designed
to produce 200,000 tpa ofPolypropylene and the plant design includes for the manufacture of
homopolymer, random copolymer and impact copolymer resins.
Polyethylene Unit
The unit will be based on the UNIPOL PE process which is simple to operate and produces low and
high density Polyethylene economically in a safe manner. The plant is designed to produce
200,000 tpa of Polyethylene (LLDPE and HDPE) including high strength copolymers, which
incorporate Hexene and Butene as the copolymers.
BankofAmerica. ~
~ -

Suez, Egypt
Utilities & Offsites
General
Section 9 Page 4
June, 2000
Water treating and usage is the largest portion ofthe utilities and offsites. The water treating and
handling consists ofthe following basic systems:
Raw Water/Firewater
Potable Water
Stripped MTO Byproduct Water
Condensate Polishing
Cooling Water Systems
These systems interact with each other to provide the water needs to the process plants and the
utilities systems.
The other utility systems are:
HP Steam Boilers
Plant and Instrument Air
Nitrogen Generator
Power Generation
Flare Systems
Offsites Storage
These systems supply the necessary utilities and offsites storage to operate the process plants and
the utility systems.
Raw Water/Firewater
The raw water supply to the site is assumed to be drinking water quality that is chlorinated, free of
suspended solids, and about 600 ppm IDS max.
The raw water will be stored in a large storage tank that will reserve a four (4) hour supply of
fIrewater plus a one day supply ofraw water for normal plant operation above the portion reserved
for fIrewater
BankofAmerica. ~
~ -
Firewater pressure is maintained in the system with a jockey pump. Electric and diesel powered
fIrewater pumps will start on low fIrewater system pressure. The fIrewater supply is backed up
with an emergency bypass to utilize seawater supplied by the Diesel Firewater Backup Pump.

Suez, Egypt
Section 9 Page 5
June, 2000
Potable Water
The potable water treating system consists of a storage tank and a chlorinator that will be used to
maintain a safe level ofchlorine. To maintain the potable water at an acceptable temperature
during hot weather an underground distribution system will be used with a continuous recirculation
loop and a potable water cooler. This system will provide safe water for safety showers and
eyewash stations without the possibility ofhot water burns.
Stripped MTO Byproduct Water
A fIxed fIlm or fluidized bed biological system is used to remove the organics from stripped MTO
byproduct water. This process does not produce any waste disposal problems and will recover over
91% ofthe water. The biological solids produced and associated water will go to drying beds
where the water will be removed without any environmental problems. The dried solids will be
non-hazardous solids that can be recycled for use in agriculture.
The effluent from the biological system will be fIltered through a back-washable filter where the
backwash stream will be recycled to the inlet ofthe biological treatment system. The remaining
organics will be removed using an organic trap, which contains a strong base anion resin operated
in the chloride fonn that is regenerated using salt. The wastewater from regeneration ofthe organic
trap will be discharged to the sea without additional treatment. The water from the organic trap will
be fed to a Reverse Osmosis unit that will remove most ofthe sodium carbonate and other ions.
Product water from the reverse osmosis unit will then be combined with treated raw water for boiler
feedwater treating.
The raw plant makeup water will be dechlorinated with chemicals and sent to a Water Softener.
The soft water from the Water Softener will be treated in a Reverse Osmosis Treatment Package to
remove most ofthe inorganic salts. The treated water will be combined with the treated MTO
wastewater for further treating.
The pretreated plant water and treated MTO byproduct water will be further treated in an additional
RO polishing package followed by a Mixed Bed Polisher.
BankofAmerica. ~
~ -

Suez, Egypt
Condensate Polishing
Section 9 Page 6
June, 2000
Process condensate from the Methanol Plant is steam stripped in a decarbonator. Condensate from
the steam turbine surface condensers is mixed with the decarbonated condensate, cooled, then sent
to the condensate polishers.
Product water from the mixed bed polishers make up the demineralized water supply and are stored
in the Boiler Feed Water Tank. The boiler feedwater tank is designed to hold 8 hours of boiler feed
water or an equivalent of 20 hours oftreated raw water.
The Deaerator is supplied with condensate from the condensate flash drum and the balance is made
up from preheated water the Boiler Feed Water Tank. The condensate is then stripped of any
entrained or dissolved air and non-condensables with 1 barg steamto remove the oxygen and non-
condensables from the boiler feedwater. The deaerated boiler feedwater is fed to the various boilers
by two sets ofboiler feedwater pumps.
HP Steam Boilers
Two HP Steam boilers are provided that will produce up to 200,000 kg/hr of steam for start-up and
abnormal operation when the methanol unit is operating at 66% rate and the methanol plant is in
start-up mode. The boilers will also provide steam to supplement the steam produced by the
methanol reformer and provide a use for the waste gaseous and liquid fuel produced. The excess
steam produced from waste fuel will be used to generate power with a condensing turbine. Both
boilers will operate continuously sharing the steam load.
HP steam produced in the MTO unit is superheated in these boilers to the HP steam header
superheat level in addition to their capability to generate 200,000 kg/hr of superheated steam.
Cooling Water Systems
Seawater Cooling
Seawater flows into a Seawater Suction Structure at the seashore through trash screens that are
designed to keep fish and trash out ofthe seawater pump intakes. The seawater pumps will supply
seawater to the plant for cooling processes directly and also for removing heat from the freshwater
closed loop system.
An Electrolytic Chlorinator is provided to generate sodium hypochlorite from a seawater slipstream
to control the growth ofsea life that will foul and plug the cooling system. After the seawater
removes process heat from direct and indirect cooling duties it will be discharged back into the sea
BankofAmerica. ~
~ -

Suez, Egypt
Closed Loop Cooling Water
Section 9 Page i
June, 2000
A closed loop fresh water cooling system will provide a circulating cooling medium to remove heat
from the process coolers. The cooling water will be circulated via the cooling water pumps, heat
will be removed from the closed loop circuit by seawater in plate and frame exchangers.
Plant & Instrument Air System
Plant and instrument air is being compressed with two centrifugal compressors and a spare where it
is cooled and sent to a Plant Air Receiver prior to being distributed as plant air and sent to the air
dryers to become instrument air
Nitrogen Generator
The requirement for large quantities of high purity nitrogen in the Polyolefins plant requires the use
of a cryogenic nitrogen plant (air separation plant) for the production ofthe plant nitrogen.
Power Generation
The facility produces a small amount ofelectric power from the excess supply of byproduct streams
that are used to raise HP steam that is condensed via a steam turbine generator/condenser set.
Flare Systems
The flare system consists oftwo separate systems. One for all cryogenic and continuous reliefs, the
other for emergency releases.
Wastewater is collected in process area sumps on a first flush principle from the paved process
areas where organic contamination may occur. The sources ofwastewater are from wash down
water, maintenance steam outs, process drainage, and rainfall, which will run offto a wastewater
collection sump. The collected wastewater is pumped to a dissolved air flotation unit to remove
any free oil down to a few parts per million. The remaining oil-free wastewater will flow to the
Facultative Pond.
Sanitary sewage will be collected in a lift station and pumped to the Sanitary Sewage Treatment
Package where it will be treated. The Sanitary Sewage Treatment Plant will discharge into the
Facultative Pond to supply nutrients to the pond and further treat the sanitary sewage effluent. The
Facultative Pond will discharge to the storm water drainage ditch, which flows to the sea.
BankofAmerica. ~
~ -

Suez, Egypt
Offsites Storage
Section 9 Page 8
June, 2000
The intennediate storage tanks between the process plants supply a 24 hour surge of product and or
rawmaterial. The co-monomer tanks provide a 14 day supply due to shipping requirements. The
Debutanizer bottoms tank is sized for two days of debutanizer bottoms to accommodate start-ups
and shutdowns when the bottoms production is greater than fuel usage.
BankofAmerica. ~
~ -

Suez, Egypt
9.2 Process Flow Diagrams (Simple)
Section 9 Page 9
June, 2000
Simplified process flow diagrams are provided for each ofthe processes included in the GTP
complex on the following pages.
More detailed process flow diagrams are provided in Section 4 ofVolume 2 ofthis report.
BankofAmerica. ~
~ -
R.
l:)'
:::r
'0
....
<;::,
:::r

t' d

"a

Sol:)
::t
I
/I)'
!tl:)
i:'

c::>

l:l.
Flue
Gas
Synthesis
Gas
.... Air
Compression
E
eu
(1)
-
en
0-
J:
Reformer
Heat Recovery
Steam Drum
t
Fuel
Water

Synthesis Gas Generation
1:1 r:t r3
Steam
KV.ERNER
Desulfurizer Saturator Prereformer
--.
Hot
Water
Natural Gas
r
'
.,
Feasibility Study Report - Volume 1of2
EATCa - Suez Petrochemical Complex GTPProject
Suez, Egypt
Section 9 Page 11
June, 2000
o
s:::
ca
.c
-
(1)
>a ~
..
(1) (1)
> "C
o ~
CJ ..
(1) U
0::::
-
ca
(1)
J:
L.
o
-
ca
-
~
CJ
L.
u
(J)
ca
(!)
(J)
.-
(/)
(1)
.r:
-
s:::
~
(J)
CJ)
--
CJ)
CD
.c
.......,
c
>.
en
- .. _"
o
C ~
CO
.c
. . . . . . . , ~
CD
2"
L.
(1)
-
L.
(1)
>
s:::
o
U
Suez, Egypt
Section 9 Page 12
June, 2000
...., ::
en
--
O ~ 1
z
:s
:::J
...J
o
()
C)
Z
-
a..
a..
o
t-
-
_ 0
(,) C
~ t'tl
-c,c
0-
... (l)
a.:E
o
c
(l) t'tl
-c,c
::s-
... (l)
u:E
-'
c
o
--
...., ~
CO
-
-
--
Crude
Methanol
HEAT
RECOVERY
Air
MTO Reactor Section

UOP/HYDRO MTO Process
HEAT
RECOVERY
& FEED
PREHEAT
Olefin
Product
TO
RECOVERY
SECTION
Water
TO/FROM
RECOVERY
SECTION

"."i Sl
("; s:

I q'

..
I
2'
........

'::l

Q.
Regenerator Reactor
uop
Water
Removal
Q.

::::
'C
;;p

e;::,
e;::, I..,.

=:
5:
tt1<::>;:::

J:::

III :::t
I
r:;'

C5+ I

l')

'C
:::l

<:::.
<:::. ....
<:::.
, ? C3=
, C4
"--
-,-
D
E
B
U
T
.. 'A
N
I
Z
E
R
, al COMPRESSION
D
E
p
R
o
" .1 P
A
N
I
Z
E
R
t
CAUSTIC
SCRUBBING
OXYGENATE
RECOVERY
COMPRESSION

uop
Olefin Product
FROM
REACTOR SECTION
MTO Recovery Section
UOP Light Olefins Recovery Process (LORP)
J ETHYLENE I
i 1.RECOVERY C1-
01 I
E
M C
E 2
ACETYLENE S
REMOVAL P
I L
Z I
E C T
R 3
S R
OXYGENATE I )..! L I C2
, REMOVAL
T
T
E
R
t
FROM/TO
REACTOR SECTION

... :::t
I
l=)'
=to::>
i:

.....
Blower
Cooler
Reaction
Blower
Cooler
n
'"

UNIPOL PP Process -
1:1 u
Catalyst
Product
Discharge
Product
Discharge
l")

::s
l:: \Q

I)Q
Rl
....
e.",

Propylene T 1 I I 1 t
Co-Monomer
Hydrogen
KV.JERNERTStage 1: Homopolymer/Random Copolymer Stage 2: Impact Copolyme

Suez, Egypt
Section 9 Page 16
June, 2000
+
... .s:::
to) to)
:::S'"
I" C'tl
o c.
I
... en
a.. .-
I C
I
C)
s:::
.-
N
~
(U
-
-
C'tl
a..
C)
t:
.-
N
~
(U
-
-
(U
a..
C)
t:
.-
C)
C)
C'tl
OJ
+
Q
en
(U
>
.-
~
"
"
C)
s:::
.-
"
s:::
Q>
-
OJ
C)
s:::
.-
C)
...
:::s
a..
..c
()
+-'
CO
Cl.
en
--
0
06
0)
c
--
+-'
CD
-
-
CD
a..
....
0)
C
.-
--
0)
L-c
::::J
a..
11
a..
a.. 0
~ .
.,
Suez, Egypt
Section 9 Page 17
June, 2000
::E
~
.....
'-
~
Q)
E
C
Q)
Q)
I
s::::CC)
Q) 0 0
~ : E '-
oJ: I "C
_0>,.
WU:I:
t
'-
Q)
-
o
o
U
-"
I
c
o
--
......,
()
CO
(]),-
~ ~
-
to
CJ)
CJ)
(])
()
o
5.-
0..
W
0..
c
o __ I!
......,
CO
>c
--
C
:::::> t:

Suez, Egypt
Section 9 Page 18
June, 2000
+
_.c
(.) to)
~
I "C ca
o 0-
I
a.. (/)
l. .-
I C
I
.c
()
......,
CO
a.
en
.-
0
oes
0)
c
.-
......,
CD
-
-
CD
a..
..
0)
C --
.-
0)
s....1:i
::J
a..
W
a..:J
en
s::::
.-
"C
s::::
a>
-
m
C)
s::::
.-
C)
a..
~
l.
(/)
a>
>
.-
-
.-
"C
"C
C)
s::::
.-
N
~
a>
-
-
ca
l.
C)
s::::
.-
C)
en
ca
m
C)
s::::
.-
. ~
-
a>
-
a>
l.
Suez, Egypt
9.3 Process Experience Lists

Section 9 Page 19
June, 2000
The Suez Petrochemical Complex is planned to utilize well proven commercially established
technologies for the conversion ofgas to methanol and olefms to polyolefins. Commercial
experience lists for these technologies are provided later in this section and further information is
provided in Section 15 ofVolume 2 of this report.
The conversion of methanol to olefms is a technology offered by UOP, based on a conventional
reactor/regenerator system and product recovery and purification systems. The catalyst is the heart
ofthe process and it has been manufactured in commercial scale and thoroughly tested in
laboratories, pilot plants and the MTO demonstration unit at Norsk Hydro's facilities in Norway.
Further information on the technology is offered below to provide an understanding behind the
confidence in this technology.
MTO Process Conditions & Equipment
The design and operation of the reactor section of the UOPIHYDRO MTO process are
comfortably within the experience range for UOP's well proven FCC (fluidized catalytic
cracking) reactors/regenerators. Over 160 UOP FCC process units have been placed on-stream
since 1942 in oil refineries throughout the world. The table below offers a comparison between
some key operating parameters of the MTO reactor and regenerator compared to the FCC reactor
and regenerator.
REACTOR REGENERATOR
MTO
I
FCC MTO
I
FCC
Temperature, C
Pressure, bar(g)
Velocity CONFIDENTIAL
Heat of Rxn. kcal/mol
Avg. Particle Size, J..l
Piece Density, glml
Commercial Units -
I
160+ -
I
160+
As shown above, the MTO reactor operates at milder conditions than the FCC reactors and the
MTO regenerator conditions are very similar to the FCC regenerators. The physical size ofthe
MTO reactor/regenerator is no larger than existing commercial FCC reactor/regenerators.
Because the MTO reactor/regenerator design and operation are within the envelope of
commercial FCC experience, the mechanical risks are minimal.
The velocities within the MTO reactor are less than the FCC reactor and are equivalent on the
regenerator side. This directionally supports lower catalyst attrition, especially when combined
with the superior attrition resistance ofthe MTO catalyst compared to typical FCC catalyst.
BankofAmerica. ~
~ -

EATCO- Suez Petrochemkal Complex GTPProject
Suez, Egypt
Section 9 Page 20
June, 2000
Catalyst particle size and piece density are similar to FCC catalysts and therefore lie within the
range of expertise for designing reactors or regenerators from fluid characteristics or designing
for cyclone separation.
Other sections ofthe MTO process (including the product recovery and purification sections)
also utilize commercially proven processing methods, which do not push the envelope ofUOP's
and the industry's processing know-how.
MTO Catalyst Development Status
In order to gain a better understanding ofthe MTO catalyst commercialization UOP has already
manufactured commercial batches of catalyst and run long-term stability and selectivity tests.
These tests included multiple regeneration tests through hundreds of cycles to better characterize
the long-term catalyst performance.
MTO Scale-up
The scale-up ratio ofthe capacity ofthe MTO demonstration unit in Norway to a commercial
scale MTO unit will be one ofUOP's smallest process scale-ups to date.
Commercialization Scale-up
Technology I Operation Scale
CONFIDENTIAL
I Scale-up Factor
Even more significant than the scale-up ratio is that the type and sizes of key equipment in the
MTO process are equivalent to equipment items already in commercial use under similar or more
severe operating conditions.
BankofAmerica. ~
~ -

Suez, Egypt
UOP Commercialization Experience
Section 9 Page 2i
June, 2000
UOP has a long history of successful commercialization of refinery and petrochemical processes.
For more than 80 years, UOP has been a world leader in developing and commercializing
technology for license to the oil refining, petrochemical and gas processing industries. The table
that follows shows a listing ofjust some of the technologies that have been introduced to the
commercial marketplace by UOP. The experiences gained by these technology introductions are
invested in UOP's current commercialization efforts.
UOP Technology Introductions
1940's 1950's 1960's 1970's 1980's 1990's
Conversion & FCC Merox HCUnibon Power RCC
Fuels
Thennal Hydrotreating RCDUnibon Recovery C-F Merox
Processes
Conversion BOCUnibon Demex
Gasoline Platfonning Butamer PSA CCR MTBE BenSat
Processes
Poly Gasoline Platfonning Alkymax Ethennax
HF Alkylation Penex SHP Oxypro
TIP IPA SCA
Aromatics & Cumene Udex Sulfolane Cresex Carom Cyc1ar
Derivatives
Hydrar !samar Tatoray SMART Q-Max
Processes
Hydea1!fHDA Cumox Parex Phenol RZ-IOO
Alkar Tetra Cymex mX-Sorbex
Styrene
Detergent Propylene Molex Olex DeFine Detal
Processes
Tetramer Pacol IsoSiv Linear-l
Detergent Alky HDUnibon PEP
Olefm&
Cat Con for Oleflex HyLube
Derivative
Nonenes ORU TBA SHP-CB
Processes
CSP SHP
KLP
Butene-l
MTO Product Quality
The olefin product produced by the MTO process will meet polymer-grade specifications for
ethylene and propylene. There are no unusual contaminants found in the effluent from the MTO
reactors and conventional processing steps are all that is required to purify the products within
the MTO plant.
MTO Performance Guarantees
UOP offers a strong performance guarantee to support the confidence in this technology. This
guarantee combined with a solid reputation for successful commercialization, offers sound
assurance that the MTO unit will deliver the performance expected.
Bankof America. ~
~ -

Suez, Egypt
KVAERNERlICI METHANOL EXPERIENCE LIST
Section 9 Page 22
June, 2000
Year Client Location Capacity

--
(STPD)
1997 Methanex Chile 3100
1995 TTMC Trinidad 1800
1995 Methanex Chile 2950
1995 Sterling/BP Chemicals USA 1500
1992 BHP Australia 180
1992 Supermetanol Venezuela 2200
1990 Coastal Chern Inc. USA 222
1989 Caribbean Methanol Co. Trinidad 1650
1988 Deepak Fertilizers Limited India 330
1980 Mobil R&D New Zealand 2x2425
1980 Air Products USA 500
1980 ARCO Chemical Company USA 2000
1979 Ocelot Industries Canada 1350
1978 Sabic/Celanese Texas Eastern (SCT) Saudi Arabia 2300
1978 Borden Chemical USA 1900
1977 IMC/Air Products USA * 1500
1977 Techmashimport Tomsk, USSR 2750
1977 Techmashimport Gubaha, USSR 2750
1976 Methanor Holland 1100
1976 Celanese Chemical Co. (Expansion USA 2200
1800 to 2200 STPD)
1975 Celanese Chemical Co. USA
** 1300
1973 Taesung Methanol Industries Co. Korea 1100
1973 Induquimica (Subsidiary of CEPSA) Spain 660
1972 Metanor Camacari, Brazil 200
1971 PCUK (Ugine Kuhlmann) France 660
BankofAmerica. ~
~ .
June, 2000
Section 9 Page 23
* Project Shelved; ** Revamp Project
Year Client Location Capacity
--
(STPD)
1971 Methanol Chemie Nederland Holland 1100
1969 Chang Chun Petrochemical Co. Taiwan 165
1969 Celanese Chemical Co. USA 150011800
1969 Georgia Pacific Corp. USA 1200
1968 Taesung Lumber Industries Co. Korea 165
.
Suez, Egypt
BankofAmerica. ~
~ -

Suez, Egypt
UOP COMMERCIALIZATION EXPERIENCE-PARTIAL LIST
Section 9 Page 24
June, 2000
Process Description Year 1

st
Unit Number of
Placed in Units
--
Operation Licensed
Catalytic Condensation GasolinelHigher Olefins 1935 300+
FCC Gasoline/Cycle OillLPG 1942 200+
HF Alkylation - Motor Fuel Gasoline 1943 100+
HF Detergent Alkylation Alkylation ofBenzene 1948 33
Platfonning Catalytic Reforming 1949 700+
Butamer Butane Isomerization 1955 50+
Merox Mercaptan Extraction 1958 1700+
Styrene Ethylbenzene Dehydro. 1960 14
Molex n-Paraffin Recovery 1964 30+
Sulfolane BTX Extraction 1965 100+
Pacol Olefin Production 1969 30+
Parex p-Xylene Recovery 1971 60+
MTBE-Ethennax MTBE/ETBE 1976 30+
Penex Lt. Naphtha Isom. 1983 100+
KLP Acetylene Hydrogenation 1986 8
Oleflex Lt. Paraffin Dehydro. 1990 14
Cyclar BTX Production 1990 2
Detal Alkylation ofBenzene 1994 4
Q-Max Cumene 1996 4
InAlk Gasoline 2001 3
BankofAmerica. ~
~ -

Suez, Egypt
UNIPOL PE EXPERIENCE LIST
Section 9 Page 25
June, 2000
UNIPOL PE Facilities Location Start-up Reactor

Units in Operation Year Lines
UCCLPPE-l USA 1969 1
Borealis #1* Sweden 1971 3
Qenos* Australia 1972 2
UCCLP-l USA 1976 1
Chemopetrol* Czech Republic 1976 4
Chevron USA 1977 1
Nova Canada 1977 2
Borealis #2* Sweden 1978 I
Russia PE #1* Russia 1980 3
UCCLP-2 USA 1980 2
Polisur Argentina 1981 1
UCCLP-3 USA 1981 2
Polifin* South Africa 1982 1
ExxonMobil USA 1982 2
Borealis #3* Sweden 1983 2
ExxonMobil #2 USA 1983 2
NUC Japan 1983 1
Japan Polychem #1 Japan 1983 1
Russia PE #2* Russia 1983 3
Imperial Oil-ESSO** Canada 1983 1
Nova #2 Canada 1984 2
Kemya Saudi Arabia 1984 2
Equistar#1 USA 1984 1
Yanpet PE #1 ** Saudi Arabia 1985 3
Sharq #1 Saudi Arabia 1985 1
HCC#1 Korea 1986 1
Borealis* Austria 1986 1
Buna Germany 1987 1
Qilu* China 1987 2
Daqing China 1988 1
USI Far-East** Taiwan 1989 1
HCC#2 Korea 1989 1
UCCLP-5 USA 1989 1
ExxonMobil #3* USA 1990 1
BankofAmerica. ~
~ .

Suez, Egypt
Section 9 Page 26
June, 2000

Qilu#2 China 1990 1
Petromont Canada 1991 1
Showa DenIm Japan 1992 1
MCCPE#2 Japan 1992 1
OPP Brazil 1992 2
CIPEN* France 1992 1
Qenos Australia 1992 1
Titan Malaysia 1993 1
Sharq #2 Saudi Arabia 1994 1
Chandra Asri Indonesia 1995 1
Tianjin China 1995 1
UCCLP-6 USA 1995 1
Jilin China 1996 1
Maoming China 1996 1
Zhongyuan China 1996 1
Kalush Ukraine 1996 1
ASPELL Polymeres France 1997 1
Polimeri Europa Italy 1997 2
Guangzhou China 1997 1
Equate Kuwait 1997 2
Hyundai Petrochemical Korea 1997 1
J. G. Summit** Philippines 1998 2
Rasco Libya 1998 2
Units in Design Year Lines
Yanpet PE #2** Saudi Arabia 2000 2
DSM* Germany 2000 1
UCCLP-7 Canada 2000 2
ExxonMobil** Singapore 2000 1
Chemopetrol** Czech Republic 2001 1
Yangzi Petrochemical** China 2002 1
Rio Polimeros Brazil 2002 2
ExxonMobil/Pequiven Venezuela 2003 1
BankofAmerica. ~
~ .

Suez, Egypt
UNIPOL PP EXPERIENCE LIST
Section 9 Page 27
June, 2000
UNIPOL PP Facilities Location Start-up Reactor

UCCP-l USA 1985 1
L. G. Caltex Korea 1988 1
Huntsman #1 USA 1989 1
Polychim #1* France 1989 1
Propilco Colombia 1990 1
Epsilon USA 1991 1
Montell Australia 1991 1
Montell Germany 1991 1
Huntsman #2 USA 1991 1
TPI#1 Indonesia 1992 2
DSM Germany 1992 1
MCCPP Japan 1992 1
Solvay #1 * Belgium 1992 1
Propylene Malaysia Malaysia 1992 1
IbnZahr* Saudi Arabia 1993 1
TPI#2 Indonesia 1995 1
Reliance* India 1996 2
Epsilon #2 USA 1996 1
Solvay #2 USA 1996 1
Hyosung T&C Ltd. Korea 1996 1
PIC Kuwait 1997 1
1. G. Summit** Philippines 1998 1
Reliance #2* India 1999 2
ARCO USA 1999 1
Epsilon #3 & #4 USA 1999 2
Reliance #3* India 1999 1
Stavropol Polymers* Russia 2000 1
UNIPOL PP Facilities Location Start-up Reactor
Units in Design Year Lines
YanpetPP** Saudi Arabia 2000 1
OPC Egypt 2000 1
IbnZahr#2 Saudi Arabia 2001 1
TOSCO* USA 2001 2
BankofAmerica. ~
~ -

Suez, Egypt
9.4 Operating Costs & Utilities
Raw Materials
Section 9 Page 28
June, 2000
The raw materials consumed by the facility are summarized below. Details ofthe specifications of
the raw materials can be found in Section 2.1 of Volume 2 ofthis report.
Natural Gas Consumption
Copolymer Production
The above consumption ofnatural gas is based on homopolymer production in the polyolefins
plant. Over the course ofa year, the polyolefins plant will produce numerous polyolefm products
in addition to homopolymers. These other products require copolymer reaction materials, namely
butene-l and hexene-l. The annual consumption of copolymer reaction materials is summarized
below:
(I) During the annual plant operation this amount of natural gas will be replaced with the quantities ofcopolymer
reaction materials (butene-l & hexene-l) shown.
Copolymer Consumption
Natural Gas Displaced(l)
9,701 TeNr (MTA)
(22.55) MMNm
3
Nr
Expected Unit S/MTof

Consumption Units
Cost(2)
SMMlYr Polyolefin
Natural Gas 930.00 MMNm
3
Nr $36.86 $93
Copolymer Credit -22.55 MMNm
3
Nr $39,630 ($0.89)
fm
Net Natural Gas 907.45 MMNm
3
Nr $35.97 $91
Copolymers 9,701 MTA $724 $7.02 $17
Raw Material Cost S42.99 S108
(2) Natural gas price based on $1 per million B.t.u. and a gross heating value of 1062 B.t.u. per standard cubic foot.
Bankof America. ~
~ -

Suez, Egypt
Section 9 Page 29
June, 2000
The MTO plant utilizes a fluidized catalyst bed style reactor and regenerator system. The catalyst
moves continuously between the reactor and regenerator and a relatively small amount of attrition
occurs producing catalyst "fines". These fines are collected for disposal and make-up catalyst is
steadily added to maintain the catalyst inventory in the reactor. This requires a steady consumption
of catalyst.
The polyolefin plant steadily consumes catalyst in the production ofthe polymers.
Other catalyst and adsorbents require periodic replacement once they become spent at the end of
their life.
$MM/Yr $/MT of Polyolefin
Catalysts - Steady Consumption
MTO & Polyolefin Plants Included Included
- Periodic Replacement Included Included
Group A: 10 year life
Group B: 5 year life
Group C: 3 year life
Group D: 2 year life
Total Catalyst & Adsorbents $30.07 $75
Chemicals
Expected $/MTof
Consumption Units Unit Cost $MM/Yr Polyolefin
Phosphate
Sodium Hydroxide
Sulfuric Acid
Chlorine
CONFIDENTIAL
Sodium Chloride
Calcium Hypochlorite
Hydrazine
Mixed Amines
Sodium Sulfite
Chemicals Cost $0.65
Chemicals Allowance $0.75 $2
BankofAmerica. ~
~ -

Suez, Egypt
Section 9 Page 30
June, 2000
Utilities Cost
EqUIvalent to $1 per mIllIon B.t.u.
Expected Unit Cost $/MTof
Consumption Units $MMlYr Polyolefm
Electricity 42.0 MW $30/MW-h $10.08 $25
Raw Water 77.5 m
3
/hr $0.60/m
3
$0.37 $1
Fuel nil MW
$3.41/MW-h(l)
$0.00 $0
Total Utilities Cost $10.45 $26
(I)
. .
Labor
Number of $Cost/Yr/Person Annual Costs

Employees $ Millions
Shift Staff
Supervisors
Operations
Maintenance
Security
DayStaft
Ops. Management
Maintenance CONFIDENTIAL
Laboratory
Administration
Expatriates
Sales & Marketing
Director
Sales Manager
Sales Force
Progress Chasers
Secretarial
Total 314 $9.55
BankofAmerica. ~
~ -

Suez, Egypt
Operating Cost Summary
Section 9 Page 31
June, 2000
$MMlYr $/MT of Polyolefin

Raw Materials $42.99 $108
Catalysts & Adsorbents $30.07 $75
Chemicals $0.75 $2
Utilities $10.45 $26
Total Variable Costs of Production $84.26 $211
Labor $9.55 $24
Maintenance & Other Fixed Costs $13.2 $33
Total Fixed Costs of Production $22.75 $57
Total Cash Costs of Production $107.01 $268
BankofAmerica. ~
~ -

Suez, Egypt
Section 9 Page 32
June, 2000
9.6 Project Implementation Schedule
The preliminary project schedule is shown below based on an assumed project kickoff date in
January,of2001.
Preliminary Schedule: EATeO - Suez Petrochemical Complex GTP Project
....
I-
I
Precommissioning
-t------+------+------+------+__
Commissioning
+------+------+------+------+-
Test Runs Completed i

I
"q
'l-.a
VO
s
Develop Design BasiS)
Basic Engineering Phasel
Process Engineering i
Mechanical Engineering I
Vessels Design I
Piping Engineering
Civil Engineering
Power & Control Systems I
Architectural I H.VAC.
Equipment Delivery
Construction

to 31 Dec 2004
BankofAmerica.


Suez, Egypt
10.1 Preliminary Environmental Assessment Study
10.2 Existing Conditions
10.3 Potential Impact of Construction
lOA Potential Impact of Operations
10.5 Potential Impact of Catastrophic Events
10.6 Conclusions
Section 10 Page 1
June, 2000
page 2
page 2
page 3
page 4
page 6
page 8
BankofAmerica. ~
~ -

Suez, Egypt
10.1 Preliminary Environmental Assessment Study
Section 10 Page 2
June, 2000
An independent preliminary environmental assessment (PEA) study was performed for this
feasibility study by Nexant Incorporated (a Bechtel Technology and Consulting Company). The
PEA was performed to document the general environmental baseline conditions and concerns, and
to screen for undesirable or unacceptable environmental impacts or potential fatal flaws in the
proposed project. The PEA is presented in a format compatible with The World Bank
Environmental Impact Assessment (EIA) requirements. The format is also compatible with
Egyptian Environmental Affairs Agency (EEAA) EIA requirements. The PEA study report
includes the following sections:
Executive Summary
Introduction
Proposed Project
Existing (Baseline) Conditions
Legislative and Regulatory Considerations
Potential Environmental Impacts of Construction ofthe Proposed Project
Potential Environmental Impacts of Operation ofthe Proposed Project
Alternatives to the Proposed Project
Environmental Management Plan
Monitoring Plan
Interagency Coordination and Public/NGO Participation
Conclusions and Recommendations
The full Preliminary Environmental Assessment report is included in the Appendix of the
feasibility study report (confidential version only). The information provided in this section ofthe
feasibility study report is based on the results ofthe Nexant PEA report.
10.2 Existing Conditions
The existing (baseline) conditions are documented to the extent available including physical and
chemical, biological, socio-economic and land use. The proposed site is located in a coastal region
in an area zoned for industrial use. The location is in an area comprised primarily of barren deserts,
bounded by two high mountains which extend towards Cairo. The site is stated to be clear, level
and free from obstructions above and belowthe surface. The location is subject to periodic
sandstorms. Winds are primarily from the north and northwest. Southerly winds occur less
frequently, and typically during January and February. Wind speeds are generally low, with
maximal occurring during Spring and Summer. The seasonal mean temperatures range from about
10C in the coldest months to 33C in the hottest months. Average annual rainfall in this area is
reported to range from 100 to 150 mm. Industrial activities in this area are numerous and include
fertilizer, petroleum refinery, textile industry, cement production, glass industry, and food industry.
BankofAmerica, ~
~ -

Suez, Egypt
10.3 Potential Impact of Construction
Section 10 Page 3
June, 1000
The PEA indicates that the following items will be impacted as a result ofconstruction ofthe
proposed project:
Geology and Soils - Except for surface scraping and shallow excavation, no impacts to
geology and soils are expected as a result of construction ofthe proposed GTP plant.
Air Quality - Minor and short-tenn impacts on local air quality may be experienced as a
result ofwindblown fugitive dust and heavy equipment exhaust emissions during
construction ofthe proposed project.
Noise - Minor and short-tenn noise impacts may be experienced as a result of operation of
heavy equipment, pile driving and other activities during construction of the proposed
project.
Visible Radiation (Light) - Other than nighttime vehicular traffic (freight haulage and
construction) no impact on local light patterns is expected as a result ofconstruction ofthe
proposed GTP plant.
Socioeconomics - With the exception of income earned by locally hired employees during
the construction phase, no long-tenn impacts on the socioeconomics ofthe project area are
expected as a result of construction ofthe proposed GTP plant.
Water - The sources ofpotable and other water will be from municipal service and delivery
by water tankers. Exact volumes, use patterns and means of delivery are not known.
Power - Onsite power will be provided by drop lines from existing nearby service and diesel
generator sets.
Transportation - Transportation impacts of construction will consist offreight delivery by
sea shipment, and by over-the-road freight haulage from port facilities and other points of
supply.
Housing - The number and location of construction workers and managers is not known at
this time.
Worker Health and Safety - Worker health and safety during the construction phase ofthe
proposed GTP plant will be in accordance with all requirements ofthe Egyptian Ministry of
Labor, and applicable requirements ofLaw 4, which address worker exposure limits and
general working conditions.
BankofAmerica. ~
~ -
The PEA indicates that no impact is expected as a result of construction ofthe proposed GTP plant
on the local topography and landfonns, littoral salt marshes, coastal marine environment, Northern
Limestone Plateau, local climate and meteorology, temperature, relative humidity, rainfall patterns,
wind patterns, moisture regime, water quality, hydrology, flora and fauna, sensitive habitats,
endangered species, fisheries, livestock or crops, demographics, indigenous peoples or tribal lands,
cultural, archeological and historical resources, agricultural land use patterns, mining and
quarrying, recreational, or local public services.

Suez, Egypt
Section 10 Page 4
June, 2000
10.4 Potential Impact of Operations

The PEA indicates that the following items will be impacted as a result ofoperation ofthe proposed
project:
Geology and Soils - Impacts on geology and soils will result primarily from disposal of
solid wastes in approved landfills. Such wastes will include catalysts and adsorbents,
catalyst fines and sludge. Wastes and the proposed means ofdisposal are described as
follows:
Polymer Wastes - Polymer granules and pellets, separated from stonn-water in the
polymer interceptor, may be saleable. Polyethylene granules, pellets or additive spills
will be contained, removed as soon as possible and either recycled or transported offsite
for disposal by others.
Catalysts and Adsorbents - Periodically, there will be a need to remove and dispose of
spent catalysts and adsorbents from the facility. Manufacturer's recommendations
regarding the safe handling and disposal of such items will be followed. Certain
catalysts will be recycled to recover metals having commercial value.
Catalyst Fines - The MTO process will generate catalyst fmes, which will be
transported offsite for disposal by others.
Sludges - Waste solids from the biological treatment pond will be periodically removed
and disposed ofin an environmentally acceptable manner.
Littoral Salt Marshes - Impacts on local littoral salt marshes occurring as a result of
operation ofthe GTP plant will depend on the location and means of discharge of
wastewaters - e.g., point of discharge, depth, and whether discharge is at end ofpipe or by
way ofdiffusers along the length ofthe pipe.
BankofAmerica. ~
~ -
Coastal Marine - Impacts on the coastal marine environment occurring as a result of
operation ofthe GTP plant will depend on the location and means of discharge of
wastewaters - e.g., point of discharge, depth, and whether discharge is at end ofpipe or by
way ofdiffusers along the length ofthe pipe.

Suez, Egypt
Section 10 Page 5
June, 2000
Air Quality - Gaseous emissions ofthe plant will be from stacks, vents and flares.
Stack emissions will occur from the Methanol Reformer Stack, the MTD Regenerator
Stack, and the Package Boiler Stack. The only regulated emission expected from these
stacks is Nitrogen Oxides (NO,). Preliminary modeling ofthese emissions was
included in the PEA. The NO
x
emissions are not expected to exceed EEAA or World
Bank guideline limits.
Vent emissions will occur from the Decarbonator Vent, the Dearator Vent, and
Intermittent Boiler Blowdown. Gases emitted from these vents are not regulated
pollutants.
Flare emissions will occur from the two flare systems installed at the facility. One will
receive emissions from all ofthe cryogenic service vents and the other will receive all
other discharges to be flared. The flare systems are provided for emergency and or
upset conditions. Venting to flares is not expected during normal operation so these
emissions were not modeled for the purposes ofthe PEA.
Water Quality - Liquid discharges from the process plants will be treated prior to discharge
from the facility into the seawater. Facility wastewater discharge points are as follow:
Organic Trap (MTO Waste Treatment)
Reverse Osmosis Unit (MTO Waste Treatment)
Water Polisher (MTO Waste Treatment)
Water Polisher (Boiler Feedwater Treatment)
Water Softener (Raw Water Treatment)
Reverse Osmosis Unit (Raw Water Treatment)
Other Liquid Waste Streams include an oil removal system included in the plant design.
The system will remove oil from water streams that may be contaminated with oil from
potential leaks in process equipment, e.g., compressor trains. Oils collected will be
periodically removed from the plant and disposed of in an environmentally safe manner.
Noise - Noise levels will not exceed 90 dBA in normally accessible locations on the facility.
Visible Radiation (Light) - Radiation, as visible light from flaring operations, will not
exceed an intensity of 1.6 kW/m2 (excluding solar) at accessible locations. The only other
BankofAmerica. ~
~ -
source of visible radiation will be plant lighting at nighttime, and nighttime vehicular traffic
associated with operation ofthe proposed GTP plant.

Suez, Egypt
Section 10 Page 6
June, 2000
Demographics & Socioeconomics - Determination ofimpacts on local demographics and

socioeconomics have not been completed at this stage.
Infrastructure - Impacts ofthe proposed project on local infrastructure are expected to be
minimal. Wastewater recovery and recycle are included in the plant to minimize fresh
water consumption. The plant will handle water treatment and disposal. Electrical power
requirements will be supplemented by power generated onsite by a condensing turbine
operated on the exhaust stream ofthe HP boilers.
Worker Health and Safety - Worker health and safety during the construction phase ofthe
proposed GTP plant will be in accordance with all requirements ofthe Egyptian Ministry of
Labor, and applicable requirements of Law 4, which address worker exposure limits and
general working conditions.
The PEA indicates that no impact is expected as a result of operation ofthe proposed GTP plant on
the local topography and landforms, Northern Limestone Plateau, local climate and meteorology,
temperature, relative humidity, rainfall patterns, wind patterns, moisture regime, hydrology, flora
and fauna, sensitive habitats, endangered species, fisheries, livestock or crops, indigenous peoples
or tribal lands, cultural, archeological and historical resources, agricultural land use patterns, mining
and quarrying, or recreational.
10.5 Potential Impact of Catastrophic Events
Potential hazards include environmental impacts resulting from catastrophic failure ofprocesses or
associated equipment, and or catastrophic events such as natural phenomenon (e.g., earthquakes,
storms, floods and lightening), or accidents. Types failure, potential hazards and resulting possible
environmental impacts are discussed in the following sections.
Hazards ofand Impacts Resulting from Process and Equipment Failure
The process fluids are typically contained within the pressurized process plant. The various process
plants operate at elevated temperatures and pressures and care will need to be taken to prevent
operator and maintenance staff coming into contact with the hot process and utility piping.
In the event of a release to the atmosphere of one or more ofthe reaction gases, there is the potential
for the generation ofa vapor cloud, which could result in a catastrophic explosion. Siting and/or
design of occupied buildings will need to address the potential consequences of such an incident.
The electrical classification ofthe facility will have to take into account the fluids normally
contained within the process to ensure the correct electrical devices are incorporated into the facility
design.
BankofAmerica. .s;:...
~ -

Suez, Egypt
Section 10 Page 7
June, 2000
Area gas detection devices will be required to monitor for gaseous emissions from the plant; these
will include carbon monoxide and hydrocarbon detection systems.
Safety-showers/eyewash stations will be required at locations where personnel can come into
contact with chemicals within the facility. Adequate personnel protective equipment will need to
be worn by plant personnel when handling chemicals in the facility.
There will be the need for noise reduction in the plant due to the use ofhigh-speed machinery.
Noise reduction can be effected by design where possible, and also by the use of adequate
personnel safety equipment.
Plant Overpressure
Over-pressure in any ofthe process units can occur due to anyone of several reasons, for example a
blocked outlet, coolant failure, power failure, external fire etc. In the event of an overpressure
incident, the processes are to be equipped with relief valves designed to vent the overpressure to a
control device, e.g. a flare, to prevent a release to the atmosphere ofone or more ofthe reaction
fluids.
Spill Containment
In the event ofa process liquid spill it may be necessary to contain the liquid to prevent potential
environmental contamination. In such areas, it will be necessary to curb the process areas and to
drain the liquid away from the process equipment to prevent possible 'liquid pooling' and the
resultant fire hazard around equipment.
Chemical Storage
The storage ofthe reaction feedstocks and products should be such that emissions to the
environment are minimized. Vents from such tanks should be sent to an approved control device,
e.g. a flare. Separation ofand diking requirements for storage tanks containing flammable
materials will require siting per the local codes and regulations
Hazards of and Impacts Resulting from Natural Phenomenon
The primary natural hazard present in Suez region is earthquake. The Suez area has registered 55
earthquakes, all of mild intensity during the period 1990-96, compared to more than 1,000 in and
around the Gulf of Aqaba during the same time period.
The plant will be built to code in accordance with ASCE standards, and will be designed to
withstand seismic activity ofmagnitude that could reasonably be expected to occur at the GTP
facility.
BankofAmerica. ~
~ -

Suez, Egypt
10.6 Conclusions
Section 10 Page 8
June, 2000
The proposed location ofthe project site is consistent with the planned use ofthe land in this
zone. Nearby facilities will include other petrochemical plants and industrial plants, the port of
Ain El Sokhna and the main highway from Suez to Zaafrana.
No unique or unusual potential major hazards are associated with the installation and operation
ofthe GTP complex. The design and layout ofthe facility will be so as to minimize inadvertent
emissions to the atmosphere through the implementation of control safeguards as well as the
use of well-trained operations and maintenance personnel.
The primary impacts of construction ofthe proposed project will be temporary, and will consist
ofwindblown fugitive dust resulting from earthmoving and other site preparation activities, and
exhausts from fossil fuel-fIred equipment.
The primary impacts ofoperation ofthe proposed project will result from emissions of nitrogen
oxides (NOJ, primarily as nitrogen dioxide (N02)' and discharge of cooling water in to the
Gulf of Suez. Preliminary atmospheric dispersion modeling predicts maximum annual impacts
ofapproximately 8 Ilg NO
x
/m3, annual average, at a distance of 1,000 meters downwind ofthe
point of discharge. The applicable standard and guideline limit is 100 Ilg NOX/m3, annual
average. Impacts ofthe thermochemical plume ofthe cooling water return are expected to be
within required limits based on the small temperature differential of 10C at the point of
discharge and the assimilative capacity ofthe receiving waters (Gulf of Suez).
No impacts on endangered species or sensitive habitats are predicted.
The preliminary fInding ofthis PEA indicates that the environmental impacts ofthe proposed
project will meet the requirements ofthe Egyptian Environmental Affairs Agency (EEAA) and
comply with the guidelines ofThe World Bank (WB) Pollution Prevention and Abatement
Handbook, 1997 (pPAH)
BankofAmerica, ~
~ -
Suez, Egypt

11.1 EATeO
11.2 Kvaerner
11.3 Ferrostaal
11.4 Other Sponsors
Section II Page I
June, 2000
page 2
page 2
page 3
page 4
BankofAmerica. ~
~ -

Suez, Egypt
11.1 EATCO
Section 11 Page 2
June, 2000
The Egyptian Arab Trading Company, EATCO, is an investment holding company for the EI
Komi family. Founded in Egypt, its current chairman is Mr. Yehya EI Komi. EATCO's turnover
is in the region of US$ 15 million with assets of about US$ 100 million. The Company has a
varied portfolio of interests ranging from industrial developments in the oil and gas and
petrochemical sectors, real estate in Egypt, tourism in Newaibi, agriculture, with one of the
largest private banana and mandarin plantations in Egypt.
Specifically Mr. EI Komi started his oil and gas interests drilling for oil in the southern
Mediterranean with Voest Alpine in 1992 as a joint venture partner and followed soon after with
the installation of a US$ 35 million lube oil plant using UOP technology in Tenth of Ramadan
city outside Cairo; this plant is due on stream by the end of 2000. EATCO has also recently
formed a joint company with a major Spanish utility for the installation of a 4 bn m
3
/day LNG
plant near Alexandria.
EATCO's decision to enter the petrochemical industry follows in the wake of President
Mubarak's drive to expand the private sector ofthe Egyptian economy and the evident local
demand for polyethylene and polypropylene (demonstrated in the CMAI market study attached
to this report). The decision has been encouraged by UOP in light ofthe availability of relatively
low cost gas from EGPC and UOP's new MTO process converting methanol directly to ethylene
and propylene without the need for a conventional catalytic cracker.
11.2 Kvaemer
Kvaemer is an international diversified business group, registered in Norway with a London based
international operational headquarters. The group has annual operating revenues in excess of
US$lO billion, employs over 50,000 people, and is a global leader in technology-based engineering,
manufacturing, and construction services for a wide range of industries. The company is a key
manufacturer and developer of systems and technologies for environment friendly solutions needed
in processing natural resources such as oil, gas, minerals, steel and hydropower.
The Kvaerner group incorporates the internationally renowned contracting companies John Brown
and Davy Corporation whose experience includes the completion worldwide of26 polyethylene
and polypropylene plants using Union Carbide UNIPOL process technology and 30 methanol
plants utilizing Kvaerner - ICI technology. Kvaerner also has extensive experience ofworking with
UOP technology in the refining and petrochemical sector.
Kvaerner Construction has been working continuously in Egypt since 1977 and has a branch office
registered in Cairo. Recent projects include:
PMC services to NPC Hydrocracker project - Suez
BankofAmerica. ~
~ -

Suez, Egypt
Technology supply to Naga Harnmadi Aluminium factory
Partner in Cairo Waste Water consortium
Consortium leader for the South Valley Development project
Cairo Airport development
Section II Page 3
June, 2000
Kvaemer has experience in operating petrochemical plants, specifically in South America and the
Former Soviet Union. Kvaemer Bowen is the Kvaemer entity in the business of undertaking the
operation and maintenance of process plants. Kvaemer will further increase its operating
experience profile with the sponsorship of the SPC project.
11.3 Ferrostaal
Ferrostal is a company ofthe MAN Group (Germany), one of Europe's leading producers of
capital goods. The group is a systems supplier in the fields of commercial vehicle manufacturing,
machinery and plant construction and in the industrial services sectors worldwide. The total
turnover of the MAN Group in the 1998/99 financial year amounted to nearly DM 26 billion, of
which 67% accrued from exports. Some 67,000 persons work worldwide for the MAN Group.
Ferrostaal, based in Essen, Germany, is active in the following areas:
- Designing, delivery, assembly (including that of steel-based structures), starting up and
maintenance of industrial facilities on a worldwide scale.
- Worldwide distribution of and provision of after-sales services for machines used in
manufacturing operations as well as for equipment and ships.
- Planning and carrying out of infrastructural projects.
- Trading in both Germany and abroad in steel products and non-ferrous metals.
- Maintaining of centers providing logistics-based supply services to automobile manufacturers.
- Financial services facilitating investments in industrial and infrastructural projects.
In 1998/99 Ferrostaal had total sales ofDM 5,219 million, new orders for DM 4,357 million, net
income ofDM 63 million and employed 6,811 people.
Ferrostaal has substantial investment and operating interests in methanol plants in Trinidad and
Tobago, some together with Kvaemer. Like Kvaemer, Ferrostaal sees an investment in the SPC
project as a strategic step in furthering its methanol interests.
DSD (Dillinger Stahlbau) GmbH is 100% owned by Ferrostaal. It is based in Saarlouis, Germany
and has worldwide activities in servicing the engineering industry with deliveries and erection for
steel making plants, petrochemical plants, cement plants, refineries, power plants and other
industrial facilities. In 1998/99 DSD had total sales ofDM 1,133 million and had 5,350 employees.
BankofAmerica. ~
~ -
Ferromatalco, a fully owned subsidiary of DSD, will act as a subcontractor to Kvaerner in the EPC
contract. Ferrometalco, based in Cairo, Egypt, executes design, fabrication and erection of heavy
steel structures for buildings, factories and industrial plants. Ferrometalco are also fabricators of
mechanical equipment components, tankage, light pressure vessels, heat exchangers; they own
facilities for pipeline fabrication and erection at their new site in Tenth ofRamadan city outside
Cairo.

Suez, Egypt
Section 11 Page 4
June, 2000
11.4 Other Sponsors

Other sponsors yet to be determined are anticipated to participate in the equity ofthe project. Such
Sponsors may include strategic investors with a long-term interest in the successful completion
and operation ofthe project.
Bankof America. ~
~ -

Suez, Egypt
12. Information Regarding the Government of Egypt
12.2 Legal and Regulatory Environment
Section 12 Page 1
June, 2000
page 2
page 2
page 3
page 4
BankofAmerica. ~
~ -

Suez, Egypt
Section 12 Page i
June, 2000
The commitment ofthe Government of Egypt to the SPC project is evidenced by the following
factors:
- The Special Economic Zone in the North West Gulf of Suez, where SPC will be located, has
been granted economic and fiscal benefits, including a tax holiday and reduced import duties;
- Gasco, the government owned gas distribution company, has provided a letter advising SPC of
the availability required quantities oflean natural gas starting from 2004;
- Discussions with His Excellency Sameh Fahrny, Egyptian Minister ofPetroleum, have indicated
the policy ofthe Government to offer a competitive price for natural gas for projects such as
SPC;
- The Government has made industrial development based upon natural resources a key policy,
and has commissioned a master plan for the petrochemical industries in Egypt to an international
consulting company ofrepute.
For the sake ofclarity, SPC is a private sector project and it is not expected that the Government
will control in any way its management and operations.
As further evidence ofthe Government's support to investments, the Investment Law (lawNo. 230
of 1989) offers a number ofincentives to foreign investors including:
- The companies and establishments shall not be nationalized or confiscated or sequestered;
- No Government intervention in the pricing ofthe establishment's products, nor in determining
their profits;
- The companies have the right to own building lands and real estate regardless oftheir
nationalities;
- The foreign investors have the rights to transfer without any restriction, their profits and hard
currency to their homeland.
12.2 Legal and Regulatory Environment
Egypt has a well developed legal system which has its roots in the civil and penal codes oflaw,
inspired primarily by French law, that were put in place in the late 19
th
century.
The court system is well established, from the ordinary police courts to the Supreme Court of
Appeal (Court of Cassation). Egypt has a strong independent judiciary. The courts recognise the
primacy ofParliament but will rule on the legal status oflegislation passed by Parliament.
The Court of Cassation has confirmed on a number of occasions the validity of clauses on the
international arbitration for the settlement of contractual disputes. An Egyptian court will respect
an arbitration clause and stay proceedings brought before it. Arbitration may be conducted under
BankofAmerica. ~
~ -
any set of rules including those ofUNCITRAL and International Chamber of Commerce;
arbitration under such rules may be held in Egypt or abroad.

Suez, Egypt
Section 12 Page 3
June, 2000
An award pursuant to an arbitration that has taken place outside Egypt may be enforced in Egypt if
it is covered by one of the international conventions to which Egypt has adhered or ifit satisfies the
conditions set out in LawNo. 27 of 1994. Egypt is a signatory state to the New York convention of
1958 on the recognition and enforcement offoreign arbitral awards.
Foreign court judgements may be enforced in Egypt subject to certain conditions. Egypt is a
signatory to the Arab League Convention that allows enforcement ofawards issued in a signatory
state in another state.
In Egypt business enterprises must observe the following regulations:
- The Companies Law (lawNo. 159 of 1981) issued by the Ministry ofEconomy and Trade
- Social Security regulations issued by the Ministry of Social Affairs
- Income tax, sales and customs duties and other regulations issued by the Ministry of Finance
- Labour regulations issued by the Ministry ofLabour pertaining to personnel working in Egypt.
Subject to observing the applicable regulations, companies in Egypt are allowed to incur long-term
indebtedness. There are no specific debt-to-equity ratios prescribed for companies, and owners may
structure the companies as they wish. As mentioned in section 5, withholding taxes on interest
payments apply to lenders based in certainjurisdictions.
In terms of security, prior project fmance transactions in Egypt have featured the following:
- Real estate mortgage (Egyptian law)
Commercial mortgage (Egyptian law)
Charge over the offshore projects accounts (English law)
Baileeship ofraw materials (Egyptian law)
Assignment ofthe benefit of the EPC contract, the offtake contract and other contracts (English
law)
Assignment of insurances (English law)
Negative pledge ofproject company shares (English law).
The project promoters have been required by the Government to fill in a questionnaire indicating
the nature ofthe SPC project.
To the best ofthe project promoter's knowledge there are no other official requirements imposed
by the Government to approve the feasibility of spc.
BankofAmerica. ~
~ -

Suez, Egypt
Section 12 Page 4
June, 2000
Note: Infonnation contained in this country profile report is the best available as of
December 1999 and can change; infonnation in this report is based on the United States
Energy Infonnation Administration's country analysis briefs.
Egypt is a significant oil producer and a rapidly growing gas producer. The Suez Canal and
Sumed Pipeline are strategic routes for Arab Gulf oil shipments, making Egypt a focal point in
world energy markets.
Egypt's government plans to accelerate its program for the privatization of state-owned
enterprises (SOE's). The privatization program moved slowly in the early to mid-1990's due to
GENERAL BACKGROUND
"'-
AI Kharijah.
SlJDAN
, ;.
o 100 x..ollr.'J
I
o
LIBYA.
The Egyptian economy has made
remarkable progress in the 1990's, as the
government has implemented refonns
under an IMF stabilization program
since 1991. The government has also
accelerated the privatization of state-
owned enterprises, whose losses were a
major drain on the state treasury, and
liberalized rules for foreign investment,
resulting in greatly increased foreign
business interest in Egypt. Subsidies
have been cut (except for a few basic
items such as staple foods), which has
contributed to a reduction in the
government's budget deficit to around
1% of gross domestic product (GDP).
During 1998, Egypt's GDP grew at a
5.0% pace, slowed by a sharp decrease
in tourism earnings following the November 1997 massacre of 62 tourists at Luxor. Tourism
revenues account for about 5% of Egypt's GDP, and are among the country's five main sources of
hard currency inflows (the others being remittances from Egyptian workers abroad, oil exports,
Suez canal tolls, and foreign aid.) GDP growth for 1999 is projected at 5.5%. Overall, Egypt's
long-tenn macroeconomic prospects look favorable, with progress set to accelerate on such
structural issues as privatization, trade liberalization, and deregulation. Egypt's main challenge is
matching employment growth to the estimated 500,000 new job seekers coming into the labor
market each year. Unofficial estimates put Egypt's unemployment rate at 17%-19%, twice the
official figure. To lower unemployment, Egypt needs to maintain a high rate of GDP growth and
to bring in more foreign investment.
Bankof America. ~
~ -
the large debts of SOE's and severe overstaffmg (layoffs were largely prevented by regulations).
The government plans to target "strategic" areas for privatization, including telecommunications
and other utilities, including the power distribution company (although the Egyptian General
Petroleum Corporation - EGPC - remains off limits). Reliance on build-own-operate-transfer
(BOOT) contracts, especially for power generation projects, seems to be increasing. Egypt has
also embarked on a program to develop infrastructure in uninhabited or sparsely inhabited areas
of the country, especially the massive Toshka irrigation project in the Western Desert. The goals
are to facilitate a move of population out of the crowded Nile Valley and to increase agricultural
production.

Suez, Egypt
Section 12 Page 5
June, 2000
Energy will continue to play an important role in Egypt's economy. Oil exports account for about
40% of the country's total export revenues. The government has been successful in curbing
domestic demand for petroleum products by reducing subsidies and encouraging consumption of
natural gas. New natural gas fmds, especially in the Nile Delta region, will soon give Egypt
enough production capacity to become a significant gas exporter.
OIL
Egypt produced an average of 866,000 barrels per day (bbl/d) of crude oil during 1998. This is a
decline from a high point of 922,000 bbl/d in 1996. With domestic oil demand increasing due to
economic growth, there are fears that the country could become a net oil importer by 2005-2010.
Egypt is hoping that exploration activity, particularly in new areas, will discover sufficient oil in
coming years to maintain crude oil production comfortably above 800,000 bbl/d. Egyptian oil
production comes from 4 main areas: the Gulf of Suez (over 70%), the Western Desert (about
16%), the Eastern Desert, and the Sinai Peninsula. Egypt's proven crude oil reserves are
estimated at 3.5 billion barrels.
Oil from the Gulf of Suez basin is produced mainly by the Gupco (Gulf of Suez Petroleum
Company) a joint venture between BP-Amoco and the Egyptian General Petroleum Corp.
(EGPC). Production in the Gupco fields, with most wells in operation since the 1960's and
1970's, is falling rapidly, although it remains substantial at around 360,000 bbl/d. Gupco is
attempting to slow the natural decline in its fields through significant investments in enhanced oil
production as well as increased exploration. BP Amoco has announced that it intends to invest
$450 million over the next six years in technology to prolong the production life of Gulf of Suez
fields. Besides Gupco, other major companies in the Egyptian oil industry include Badr el-Din
Petroleum Company (EGPC and Shell); Suez Oil Company (EGPC and Deminex); and El
Zaafarana Oil Company (EGPC and British Gas -- BG).
Egypt's total oil production has declined more slowly than Gupco's due to new output from
independent producers like Apache and Seagull Energy at smaller fields, especially in the
Western Desert. Crude production in the Qarun block, for instance, surpassed 40,000 bbl/d in
mid-1997, up from 5,000 bbl/d in late 1995. In October 1997, Apache and Seagull announced a
BankofAmerica. ~
~ -
"significant" oil discovery in the East Beni Suef concession (which they share 50/50), also
located in the Western Desert. The field is said to contain around 100 million barrels of crude oil.
Overall, Egypt now gets around 16% of its oil and 30% of its natural gas from the Western
Desert. Development of new fields in the Qattara Depression and the North Coast's El Alamein
are expected to add 40,000 bblld in new production as they come online in the next few years.
Recent discoveries in the Western Desert include: a find south of Dab'a (93 miles southwest of
Alexandria), another at the Qaroun concession (43 miles southwest of Cairo), and one in the
Meliha concession area (50 miles southeast of Mersa Matrouh).

Suez, Egypt
Section 12 Page 6
June, 2000
Spain's Repsol is currently expanding its oil output in Egypt's Western Desert to 60,000 bbl/d
(from 32,000 bblld in early 1997). A joint venture of Repsol (50%), along with Apache (40%),
and Australia's Novus (10%), operates the Khalda concession, currently producing 35,300 bbl/d
of oil. In September 1998, the partners announced that they would double their investment to
$100 million at Khalda over the next two years in order to increase oil production to 40,000 bbl/d
by the end of2000. In October 1999, a new test well in the central Khalda concession produced a
flow of3,000 bbl/d.
Suez Canal I Sumed Pipeline
In addition to its role as an oil exporter, Egypt has strategic importance because of its operation
of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, two routes for export of Arab Gulf
oil. Tanker traffic and revenues have declined in recent years as a result of competition from oil
pipelines and the alternate route around the Cape of Good Hope in South Africa. Suez Canal tolls
in 1998 fell to $1.76 billion, from $1.79 billion in 1997, the fifth consecutive annual decline,
despite efforts to win back market share. In late December 1997, for instance, the Suez Canal
Authority (SCA) announced that it would not raise canal transit fees for the fourth year in a row.
The SCA also said it would offer a 35% discount to liquefied natural gas (LNG) tankers in 1998,
as well as other discounts for oil tankers.
The SCA is continuing enhancement and enlargement projects on the canal. The canal has been
deepened so that it can accept the world's largest bulk carriers, but it will need to be deepened
further to 68 or 70 feet, from the current 58 feet, to accommodate fully laden very large crude
carriers (VLCCs). The SCA has attempted to reach an agreement with its main competition for
northbound crude traffic, the Sumed pipeline. Such an agreement could bar any tanker small
enough to traverse the canal from transporting oil through the pipeline. The SCA offers
incentives for tankers to off-load a portion of its cargo through the Sumed, allowing for passage
through the canal, and reloading at the other end ofthe pipeline.
The Sumed pipeline is an alternative to the Suez Canal for transporting oil from the Arab Gulf
region to the Mediterranean. The 200-mile pipeline runs from Ain Sukhna on the Gulf of Suez to
Sidi Kerir on the Mediterranean. The Sumed's original capacity was 1.6 million bbl/d, but with
completion ofthe Dashour pumping station, located south of Cairo, capacity has increased to 2.5
million bbl/d. The pipeline is owned by the Arab Petroleum Pipeline Company (APP), a joint
Bankof America. ~
~ -
venture between Egypt (50%), Saudi Arabia (15%), Kuwait (15%), the U.A.E. (15%), and Qatar
(5%). The APP also has been increasing storage capacity at the Ain Sukhna and Sidi Kerir
tenninals.

Suez, Egypt
Section 12 Page 7
June, 2000
Refining and Petrochemicals

Egypt's eight refmeries are able to process more than 577,000 bbl/d of crude, with the largest
refmery being the 145,000-bbl/d Mostorod refinery outside of Cairo. The government has plans
to increase production of lighter products, petrochemicals, and higher octane gasoline by
expanding and upgrading existing facilities. In addition, Egypt's Ministry of Petroleum plans to
build five new refineries and petrochemical plants valued at $2.5 billion. Egypt's refinery
expansion plans include construction of a 40,000 bbl/d hydrocracker at the EI-Nasr Petroleum
Company refmery in Suez, and a doubling of capacity at the refinery in Assyut to 100,000 bbl/d.
In September 1997, a $33 million management contract was awarded to U.K.-based Kvaerner
John Brown for the EI-Nasr hydrocracker project, which is expected to cost $450 million.
EGPC is planning to increase production of lube oils by expanding its EI-Mex refinery in
Alexandria. In May 1997, EGPC signed a $300-million contract with Toyo Engineering to build
Egypt's first steam cracker. The cracker is to be fed by ethane and to have a capacity of 300,000
tons per year. In August 1998, Foster Wheeler France SA won a $200-million contract from
Alexandria Mineral Oils Co. to build a lube oils plant in Alexandria. Meanwhile, a 700,000-ton-
per-year naphtha refonner complex is being built by Alexandria Petroleum Company, with
completion due in June 2000.
A contract for construction of the 100,000-bbl/d, Egyptian-Israeli joint venture MIDOR (Middle
East Oil Refinery Ltd.) refinery in Alexandria entered into effect in July 1997. The ultra-modem,
environmentally-advanced facility is expected to cost about $1.3 billion and will include a
25,000-bbl/d hydrocracker. The original plan was for the facility to be mainly export oriented,
with only 20% of production sold in Egypt, but recent reports indicate plans for 50% or more of
the products to be sold locally. The project represents the largest Arab-Israeli joint venture to
date. In January 1997, EGPC acquired an additional 20% equity from Israel's Merhav and from
the local Hussein K. Salem Group to push its share in the venture to 60%. Each of the private
investors retains a 20% share in the project. Recent reports indicate that EGPC may intend to sell
off some of its holding to foreign investors. Spain's Repsol is set to manage the plant when it
comes online in 2001.
NATURAL GAS
Oil companies began active exploration for natural gas in Egypt beginning in the early 1990s,
and in short order they found a series of significant gas deposits -- in the Nile Delta and the
Western Desert. Today, Egypt's natural gas sector is expanding rapidly, with production expected
to nearly double between 1999 and 2002. Production stands at 2.3 billion cubic feet per day
BankofAmerica. oS::-
~ -
(Bcf/d) near the end of 1999, up from 1.6 Bcf/d at the beginning of the year, and is expected to
reach 3.0 Bcf/d by the end of 2002 and 4.0 Bcf/d in 2003.

Suez, Egypt
Section 12 Page 8
June, 2000
Major foreign companies involved in gas exploration and production in Egypt include British
Gas (BG), BP-Amoco, ENI-Agip, and Shell. Shell has plans to spend around $1.6 billion in
Egypt, mainly on gas exploration and development, over the next five years. BP-Amoco plans to
spend $450 million by 2000, while ENI-Agip and BG also plan significant expenditures in this
area.
As of early 1999, Egypt's total proven gas reserves were estimated at 31.5 trillion cubic feet
(Tc), up 54% from 20.4 Tcf in 1997, and more than double the 15 Tcf of proven reserves in
1993. Reserves are expected to increase even more in the next few years. Most of this increase
has come about as a result of new gas discoveries in the Mediterranean offshorelNile Delta
region, and increasingly in the Western Desert. In the Nile Delta, which has emerged as a world-
class gas basin, recent offshore field developments include Port Fuad, South Temsah, and
Wakah. In the Western Desert, the Obeiyed Field is an important natural gas area currently under
development. Overall, more than half of Egypt's current natural gas production comes from just
two fields: Abu Madi (on stream since the 1970s) and Badreddin (since 1990). Abu Qir is the
third largest field, and like Abu Madi is considered mature.
The International Egyptian Oil Company (IEOC), a subsidiary of Italy's ENI-Agip group, is
Egypt's leading natural gas (and overall hydrocarbons) producer, operating in the Gulf of Suez,
the Nile Delta, and the Western Desert regions. In cooperation with BP-Amoco, IEOC has been
concentrating its natural gas exploration and development efforts in the Nile Delta region. The
companies are undertaking a $1 billion development program expected to yield about 365 billion
cubic feet (Bet) annually beginning in 2000. On November 4, 1997, Amoco (along with its
partners EGPC and IEOC) announced plans to develop the giant Ha'py gas field in the Ras el-
Barr concession of the Nile Delta region at an estimated cost of $248 million. The gas (up to 2
Tcfannually) is to be marketed domestically beginning in 2000. In September 1997, IEOC tested
the Temsah gas field (located in the offshore Nile Delta) at 11.6 million cubic feet per day
(Mmcf/d). In October 1998, BP-Amoco (25% owner) and ENI-Agip signed a gas sales
agreement with EGPC (50% owner) and IEOC (25% owner) for Temsah. Field development
could cost $700 million, with production beginning in early 2000. Temsah's gas reserves are
estimated at 3.9 Tcf, and the gas sales agreement is for 35 Mmcf/d initially, increasing to 480
Mmcf/d by 2003.
Two areas in the Western Desert -- Obeiyed and Khalda -- have shown great potential for
increasing Egypt's gas production in the near future. The Obeiyed gas recently started producing
300 Mmcf/d, after the completion of a pipeline linking it to Alexandria. Production of 300
Mmcf/d started at Khalda. In late 1998, Repsol announced a gas discovery in the Khalda Offset
Concession, adjacent to Khalda. Output from Obeiyed and Khalda will be transported to
Alexandria by a 180-mile pipeline. BP-Amoco and the IEOC also are preparing to bring several
fields off the Nile Delta coast into production. These include the Baltim and Baltim South fields,
BankofAmerica. ~
~ -
expected to come online by 2000, and fields on the Temsah and Ras el-Barr concessions by
2003.

Suez, Egypt
Section 12 Page 9 .
June, 2000
Other companies with recent gas finds in Egypt include: Petrobel (the Sigan-l field), AgiplEGPC
(Wakkar), and the U.K.-based BG Group (Rosetta-5 and Rosetta-6). These 3 finds are all in the
Nile Delta region. Gas deliveries from the Rosetta concession are expected beginning in 2000. In
other developments, BP-Amoco has found significant gas reserves in its North Sinai concession,
while Apache is expecting its natural gas output in Egypt to grow five-fold between 1997 and
2000, reaching nearly 15 Bcf per year. In April 1999, German RWG-DEA hit gas in its
concession in the western Nile Delta, with a flow rate of 30 Mmcf/d. In May 1999, the Italian
firm Edison and British Gas International made a large find ("PI2/13") in the West Delta Deep
Marine concession, which tested at 45 Mmcf/d, followed by another ("Simian-l ") which tested at
44 Mmcf/d in October 1999. Geologists believe that the same type of formations which have
been found to hold gas in the Nile Delta also extend out into the Mediterranean as a result of the
Nile's flow.
The rapid increase in Egypt's natural gas reserves and production in recent years has encouraged
ambitious plans for gas exports (either by pipeline or LNG tanker) to such countries as Turkey,
Israel, Jordan, Libya, and the Palestinian territories. Currently, Egypt consumes all the gas it
produces.
The most ambitious idea for gas exports is a pipeline which would connect Egypt with Israel and
Gaza, with the possibility of eventual links to Lebanon, Syria and Turkey. On December 22,
1999, agreement was announced by the office of Israeli Prime Minister Ehud Barak on gas
exports from Egypt to Israel and Gaza. A pipeline is to be extended from El-Arish in Sinai to
consumers in Israel and Gaza, initially gas-fired power plants along the coast. Construction is
due to be completed by early 2002.
Besides the Egypt-Israel-Gaza pipeline, another option for Egypt is to export LNG to Turkey.
This project would involve the construction of a $1.2-billion liquefaction terminal near Port Said
on the Mediterranean coast, and a regasification facility at Izmir in Turkey. Egypt and Turkey
signed a preliminary agreement for LNG exports in 1996, and BG in November 1999 formed a
subsidiary called Egypt LNG for the venture, but analysts have raised serious questions about
whether the project is economically feasible.
Natural gas demand is growing rapidly in Egypt as thermal power plants, which account for
about 65% of Egypt's total gas consumption, switch from oil to gas. Gas also is being targeted
for use in heavy industrial projects, including petrochemical plants, a large new fertilizer plant in
Suez, and several major new steel projects in Alexandria, Suez, and south of Aswan. Compressed
Natural Gas (CNG) is being used as fuel for taxis in the Cairo metropolitan area as part of a pilot
project. Around 20,000 taxis already have been converted to use CNG, and 17 CNG filling
stations have been built to serve them. Meanwhile, domestic gas consumers are to be served by
several private gas distributors, franchises which were awarded in late 1998. One of the
BankofAmerica. ~
~ -
franchises, awarded to a team headed by BG and including the Egyptian construction finn
Orascom and Edison of Italy, will develop a gas distribution infrastructure in Upper Egypt as far
south as Asyut, where no piped gas had been available. After the initial phase, valued at $220
million, a possible later phase may extend the gas grid south to Aswan.

Suez, Egypt
Section 12 Page 10
June, 2000
ELECTRIC POWER
Egypt currently has installed generating capacity of 16.6 gigawatts (GW), with plans to add 9.3
additional GW (mainly gas-fired) by 2010. Around 84% of Egypt's electric generating capacity is
thennal (gas turbines), with the remaining 16% hydroelectric, mostly from the Aswan High Dam.
All oil-fired plants have been converted to run on natural gas in a recently completed program.
Plans for additional capacity include a 1.2 GW gas-fired power plant at Kureimat, about 60 miles
east of Cairo, scheduled to enter service in the near future. The Kureimat plant received $200
million in financing from the United States Agency for International Development. With
electricity demand growing 7%-8% annually, Egypt is building several power plants and is
considering limited privatization of the electric power sector. Egypt's power sector is currently
comprised of seven regional state-owned power production and distribution companies. The
government plans to privatize them, starting by selling off minority stakes to private investors
through the Cairo Stock Exchange. A 20% stake in Cairo Electricity Company was sold off by
the end of August 1999, and minority stakes in the six others are to be sold by the end of 1999.
This decision follows the February 1998 passage of Law 18, which provides for electricity
restructuring and asset sales. The aims of privatization are to raise money and to attract new
investment.
Egypt is planning to add generating capacity by utilizing Build, Own, Operate, and Transfer
(BOOT) fmancing schemes to construct power plants. BOOT projects are used to fund large-
scale public infrastructure without affecting the country's debt profile. Private developers are
allowed to recover their costs of construction through ownership and operation of the plant for a
fixed period before handing it over to the state. The first BOOT project is a gas-fired steam
power plant with two 325-MW generating units, to be located at Sidi Kerir or on the Gulf of
Suez. The plant is expected to cost about $450 million, to begin operation in 2001, and to be the
largest private power generator in the Middle East. Electricity from the plant is to be sold at 2.54
cents per kilowatthour. This competitive price stems largely from the availability of cheap
natural gas -- to be supplied by Egypt's Gasco -- as a feedstock. U.S.-based InterGen (a joint
venture of Bechtel Enterprises and Shell Generating Ltd.), along with local partners Kato
Investment and First Arabian Development and Investment, have the 20-year BOOT contract for
Sidi Kerir. The second BOOT power project award went to Electricite de France (EDF), for two
gas-fired plants to be located near the north and south ends of the Suez Canal. Each plant will
have an installed capacity of 650 MW, and the project cost will total around $900 million. The
price for power from the EDF plants will be 2.4 cents per Kilowatt hour (Kwh), the lowest price
yet offered for a BOOT plant. The Egyptian Electricity Authority issued a tender for two
additional BOOT projects, Cairo North and Safaga, in October 1999.
BankofAmerica. ~
~ -

Suez, Egypt
COUNTRY OVERVIEW
Section 12 Page II
June, 2000
President: Mohammed Hosni Mubarak (since October 1981) Prime Minister: AtefObeid (since
October 1999)
Independence: July 23, 1952
Population (7/99E): 67.3 million
Location/Size: Northern Africa/1,001,450 sq. kIn (386,662 sq. miles), about the size of Texas
and New Mexico
Major Cities: Cairo (capital), Alexandria, Aswan, Asyut, Giza, Ismailiya, Port Said, Suez, Tanta
Languages: Arabic (official), English, French
Ethnic Groups: Egyptian, Bedouin, and Berber compose 99% ofthe population
Religions: Sunni Muslim (94%), Coptic Christian (6%)
Defense (8/97): Army (320,000), Air Defense Command (80,000), Air Force (30,000), Navy
(20,000), Reserves (254,000)
ECONOMIC OVERVIEW
Currency: Pound (P)
Market Exchange Rate (19/6/00): P 3.47 = $1 U.S.
Nominal Gross Domestic Product (GDP) (1999E): $91.9 billion
Real GDP Growth Rate (l999E): 5.8%
Inflation Rate (1999E): 4.0%
Current Account Balance (1999E): -$2.5 billion
Major Trading Partners (1998): United States, Italy, Germany, Japan
Merchandise Exports (1999E): $4.8 billion
Merchandise Imports (1999E): $15.2 billion
Merchandise Trade Balance (1999E): -$10.4 billion
Major Export Products: Crude oil and petroleum products; cotton yarn and textiles;
engineering and metallurgical goods; agricultural goods and raw cotton (5.2%)
Major Import Products: Machinery and transport equipment; livestock; food and beverages
Net International Reserves (1999E): $21.2 billion
Total External Debt (1999E): $34.5 billion
ENERGY OVERVIEW
Energy Ministers: Sameh Fahmy (Minister of Petroleum), Ali el-Saidi (Minister of Electricity
and Energy)
Proven Oil Reserves (1I1199E): 3.5 billion barrels
Bankof America. ~
~ -
Oil Production (1st 9 months of 1999, average): 910,000 barrels per day (bbl/d), of which
834,000 bbVd is crude oil
Oil Production Capacity (1999E): 928,000 bbl/d
Oil Consumption (1998E): 550,000 bbl/d
Net Oil Exports (1998E): 360,000 bbl/d
Crude Refining Capacity (1I1199E): 578,000 bbl/d
Natural Gas Reserves (1I1199E): 31.5 trillion cubic feet (Tc)
Natural Gas Production (1998E): 0.5 Tcf
Natural Gas Consumption (1998E): 0.5 Tcf
Electric Generation Capacity (1I1197E): 16.6 gigawatts (84% thermal, 16% hydroelectric)
Electricity Generation (1998E): 57.8 billion kilowatthours

Suez, Egypt
Section 12 Page 12
June, 2000
Bankof America. ~
~ -

EATCO - Suez Petrochemicals Complex - Gas To Polyolefins

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

EATCO - Suez Petrochemicals Complex - Gas To Polyolefins

Uploaded by

Copyright:

Available Formats

PB2001-102056

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

2.2 Location ofProject

10. Preliminary Environmental Assessment

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

SPC Complex ISBL & OSBL

Feasibility Study Report - Volume 1 of2

2.1 Project Description

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Polyolefins Plant: UNIPOL PE Process

2.2 Location of Project

Feasibility Study Report - Volume 1 of2

3. Feedstock Supply and Product Offtake

3.1 Feedstock Supply

4.1 Total Project Costs page 2

4.1 Total Project Costs

5.1 Potential Sources of Finance

Feasibility Study Report - Volume 1 of1

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

5.3 Equity Funding

6. Risk Assessment and Risk Mitigants

6.1 Risk Assessment

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

7.1 Key Assumptions

Basic Engineering Completed 1 August 2001 7 Months

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

7.1.9 Tax and Accounting Assumptions

Feasibility Study Report - Volume 1 of2

7.3 Sensitivity Analysis

Feasibility Study Report - Volume 1 of2

Case 6 - Improved Performance

7.4 Economic Model

8.1 Market Study

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

8.3 Polyoleim Product Supply & Demand

Feasibility Study Report - Volume 1 of2

ORIENTAL PETROCHEMICAL COMPANY: The second project is a polypropylene plant

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2

Source: CMAI & others

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 ofl

Feasibility Study Report - Volume 1 of1

Domestic Egyptian Polyolefin Prices

Feasibility Study Report - Volume 1 of2

Feasibility Study Report - Volume 1 of2