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ERC Refinery
Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number 29128
Country
Egypt(IDA)
RegionMiddle East and North Africa
SectorOil Refineries
Department
Company nameOrient Ltd
Environmental category:A
StatusActive
Date ESRS disclosedMarch 4, 2010
Previous EventsInvested: June 18, 2012
Signed: June 24, 2010
Approved: May 6, 2010
View Summary of Proposed Investment (SPI), click here

OverviewCategory &

Applicable Standards
Key Issues

& Mitigation
Community/

Engagements
Availability

of Full

Documentation

Overview of IFC's scope of review
IFC’s environmental and social (E&S) review of this project consisted of appraising technical and environmental, health and safety documentation submitted by the company; Egyptian Refining Company (ERC). The review also appraised the socio-economic data around the project location that has been gathered and compiled by the company along with company stakeholder engagement activities.

A field visit carried out in January 2010 by the IFC project team, including an environmental specialist and a social development specialist, consisted of interviews and discussions with Company financial and operations management, the Company community relations team, the project Engineering, Procurement and Construction (EPC) contractor and the key E&S advisors to the Company including the consultants responsible for the project E&S assessment program and an independent E&S consultant representing potential lenders to the project. Meetings were also held with the state-owned Egyptian General Petroleum Company (EGPC) and their subsidiary companies based at the project location: Cairo Oil Refining Company (CORC) responsible for the operations at the existing refinery; and, Petroleum Pipeline Company (PPC) responsible for the storage terminal and pipeline hub that connects to crude oil and fuel product pipeline infrastructure.

Project site visits included: the site of the proposed new refinery location; the industrial area surrounding the facility; the CORC refinery; the Company community relations office; proposed project construction related areas including an equipment lay-down area and transportation corridors; the community closest to the new ERC facility site; and, a vocational training center in the area being used by the Company.
Project description
The project consists of the construction and operation by ERC of a hydro-cracking and coking facility in the Mostorod industrial area of greater Cairo. The new facility will be built within the boundaries of the existing Mostorod industrial complex adjacent to the existing CORC refinery and to the hydrocarbon storage and pipeline facilities operated by PPC. Using the residual oil (high sulfur atmospheric residue) from the CORC process (currently sold as a heavy fuel oil) as a feedstock, the new facility will produce high-quality, high-value petroleum products for Egypt’s domestic market such as ultra low sulfur diesel, international specification jet fuels, liquid petroleum gas (LPG) and high octane gasoline blending components. The ERC facility will consist of a vacuum distillation unit, a hydro-cracking unit, naphtha and distillate hydro-treating units, a reforming unit, a hydrogen plant and a delayed coking unit. The facility will incorporate sulfur recovery technology that will remove more than 99.9% of the sulfur from the feedstock, converting the hydrogen sulfide formed in the process into granulated sulfur pellets that will be sold in the market. Fuel products will be sent to storage and distribution at the PPC facilities.

ERC has agreed an engineering, procurement and construction (EPC) contract for the project with a consortium formed between GS Engineering & Construction Corporation (GS) of South Korea and Mitsui & Company, Ltd. of Japan. Worley Parsons Ltd has been commissioned as the project management contractor on behalf of ERC for the construction program. The construction program also includes site clearance which will require the demolition and relocation of existing facilities at the project site. Once the new facility has been constructed, EGPC, through its subsidiary, EPROM, will provide operations and maintenance services to ERC.

In addition, and as part of the project, ERC has agreed to an upgrade program for the existing CORC refinery and PPC facilities. Upgrades include technical modifications to connect the ERC facility to the CORC refinery and environmental upgrades that, once implemented, will result in positive cumulative environmental impacts in the project area.

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