Egypt to Domestically Refine Imported Crude Oil from Saudi Aramco

SEATTLE (Oil Monster): The Egyptian government is in talks with Saudi Aramco-the state-owned oil company of the Kingdom of Saudi Arabia to import crude oil. The North African country plans to domestically refine the imported crude, which in turn is expected to give better control over gasoline and diesel supplies. Presently, Egypt imports nearly 700,000 metric tons of refined products from Saudi Arabia.

According to Tarek El-Molla, Egypt’s Oil Minister, the talks to this effect are already on and a deal could be reached in early-2018. The minister noted that the country aims to get supplies of crude from Aramco which will be processed in local refineries. The deal would result in better contracts and significant cost savings. However, the Minister noted that decision is yet to be taken on the amount of crude that would be imported from Aramco.

Saudi Arabia and Egypt had entered into an agreement in April last year to supply 700,000 tonnes of refined oil products per month for a period of five years. The deal was valued at around $23 billion. However, by October 2016, Saudi Aramco had completely halted shipments of oil products to Egypt, on commercial reasons. Following this the country was forced to buy fuel from world markets at a higher cost. After six months cut-off, the shipments had resumed during March this year.

The strengthening of ties with Saudi Aramco will foster investments in Egyptian refineries. Egypt aims to make better use of its immense storage capacity and to convert Sidi Kerir terminal into a key center for marketing Aramco crude products and export it to Europe. The Company Executive Chairman Ibrahim Al-Buainain had visited Egypt in September to explore the possibilities of investments in various petroleum sector projects in the country.