Egypt expands refining to cut the fuel-import bill, and courts private capital for new diesel plants

The Oil Ministry is expanding its push into refining and petrochemicals, and raising the bill it’s willing to spend to get there. The ministry has lifted its investment target for refining and petrochemical projects to around USD 5.2 bn from about USD 4 bn. It has also added two new projects to the plan, aiming to cut what the country spends importing diesel and butane, a government source tells EnterpriseAM. The plan pairs revamps and debottlenecking at existing refineries with new units for diesel and higher-value products, the source says.

The target is the import bill. The ministry wants to cut petroleum-product imports — excluding gas and crude — to USD 3.6 bn this year from USD 6.2 bn in FY 2025/26, according to a government document EnterpriseAM has seen.

DATA POINT- Diesel production rose some 15% y-o-y to 793k tons in June, outpacing a 6.6% increase in consumption to 1.18 mn tons, according to Capmas data (pdf). Production of crude oil, condensates, and butane rose to 2.3 mn tons from 2.1 mn tons. Butane imports fell 15% to 142k tons as domestic production jumped 42% to 152k tons and consumption declined 8% to 264k tons. Overall consumption of other petroleum products fell 7.6% to 2.83 mn tons in June, compared to 3.1 mn in the same month last year.

The government is targeting USD 4.5 bn to upgrade refineries and develop new projects to support self-sufficiency in fuel, Oil Minister Karim Badawi said, adding that refinery utilization has risen from 66% to over 80%.

The work runs across the state’s refining arms. Cairo Oil Refining will carry out replacement-and-upgrade work at its Mostorod and Tanta refineries; Suez Oil Processing Company (SOPC) is building a new coking and diesel complex; Nasr Petroleum Company (NPC) is running development projects; and Petroleum Pipelines Co. is upgrading crude-transport lines and parts of the national network, the source tells us.

Assiut is the flagship project. ANOPC’s diesel and high-value-products complex in Assiut — one of the two new additions — is due to start trial operation in 4Q, with capacity of some 2.5 mn tons a year of diesel plus 100k tons of butagas and 300k tons of coke, the source says. Its cost has risen to around USD 3.1 bn, from USD 2.8 bn, on currency moves.

Now the money question. To fund the new refining capacity, the government wants private investors in. It’s looking to raise some USD 2.1 bn for plants that would convert fuel oil into diesel, gasoline, naphtha, and other products, Asharq Business reports, citing an unnamed government official. The Egyptian General Petroleum Corporation (EGPC) plans to set up a separate investment company with private investors to build them and has fielded preliminary approaches from Arab and international companies — though none have firmed up into a serious offer, per the news outlet. The two complexes would sit at SOPC and NPC, each processing 1.75 mn tons of fuel oil a year (3.5 mn combined), with the Suez plant estimated at USD 1.1 bn and Nasr at USD 1 bn, Asharq reports.

IN CONTEXT- SOPC processed nearly 1.4 mn tons of crude in FY 2025/26 against a 3 mn-ton design capacity, while NPC processed some 1.5 mn tons. That gap is part of why the government is increasing investments in FY 2026/27 to upgrade refineries and develop new projects to support fuel self-sufficiency, Oil Minister Karim Badawi said.

Why it matters: Upgrading refineries, transport network, and storage facilities would help the country produce higher-value products, narrow the gap between domestic production and consumption, and strengthen its role in regional petroleum trade, Badawi said, pointing to the new Fujairah-Alamein Oil and Gas Company and Sumed’s expanding operations between the Red Sea and the Mediterranean as part of that push.

Beyond downstream: The ministry also plans to finish the Line 4 expansion at Gasco’s Western Desert Gas Complex and expects a large number of new oil and gas fields to be added to the production map in 3Q and 4Q, alongside a five-year plan to double crude and condensate output, the source tells us.

The upstream ambition already has a marker. State-owned GPC made 12 oil discoveries in FY 2025/26 — its highest annual rate on record — and is preparing its first horizontal well in the Western Desert while testing a well after its first hydraulic-fracturing operation, Chairman Mohamed Abdel Meguid told the company’s general assembly.

Taqa expands fuel storage sites

Taqa Arabia’s board approved an EGP 1.4 bn petroleum products storage depot investment in Greater Cairo through its Taqa Petroleum subsidiary, according to a bourse filing (pdf). The new facility adds to Taqa’s existing storage sites across Suez and Alexandria and is meant to secure gasoline and diesel supply for Taqa’s own filling stations as well as other retailers.

REMEMBER- This move comes after Taqa Arabia acquired 10% of 172 military-affiliated Wataniya fuel stations in June. The transaction parked the assets inside a new IPO-bound vehicle called Quick Fuel for Petroleum Products Trading and Distribution, which Taqa now manages and operates.

ALSO- Taqa’s first Jordan contract — a 14-km pipeline connecting Al Rawda industrial city to the Kingdom’s gas network, inked late last month — is worth USD 14.8 mn, according to an EGX disclosure (pdf) responding to a bourse inquiry. The amount forms part of a USD 70 mn Abu Dhabi Fund for Development program, which also awarded USD 22.7 mn to a Petrojet-led consortium. In addition to its local footprint, Taqa Arabia operates in Saudi Arabia, Qatar, Tanzania, Mozambique, and Pakistan.