Egypt State Information Service

Energy is a mainstay of socio-economic development processes. Egypt has used electricity for lightning purposes since the beginning of the 20^th century. Egypt started generating electricity from hydraulic sources where Aswan Reservoir Station was established in 1960 at a capacity of 340 MW. and High Dam Station in 1968 with a capacity of 2100 MW. This source of energy contributed in making a great industrial up raise and in lighting a great part of the Egyptian rural area during this period.

In 1985, there was an expansion in hydraulic power generation stations, therefore, Aswan Reservoir Station (2) was built, in addition to Esna and Naga' Hammadi Stations. As well, Naga' Hammadi Barrage electricity power generation is under construction at a capacity of 64 MW in 2005/06 and completion of renewing the turbins of the High Dam Station is underway. Hydraulic Power Plants constitute about 18 percent of the total consumed electric power in Egypt.

As for thermal power that uses oil and natural gas, 27 thermal plants were established during the past two decades. An expansion in using natural gases in electricity generating stations was completed.

The natural gas rate used for the stations joined to the natural gas grid reached 85.2 percent while it reached 80 percent of the consumed total fuel. Sun energy

Energy policy in Egypt during the current stage aims at preserving the coming generation right to the traditional depletable energy sources and making the best use of various energy alternatives through giving due attention to using new and renewable energy sources to produce clean energy.

Solar energy represents a promising alternative source in Egypt. Solar radiance hours in areas ideal for using solar energy in Egypt range between 2300 to 4000 hours/year. A solar energy generator station was built at al-Kuraimat, south of Cairo at a capacity of 150 MW. A lighting project for 5 villages in remote areas is under construction by using solar energy.

In addition, the procedures of implementing the first thermal solar station with a capacity of 150 m in al-Kuraimat at a total cost of US Dollar 147 million will be completed. It is the first station in the Middle East and ranks fourth internationally. This station depends on using the natural gas at night as a fuel to continue operating the station all the day.

Wind represents a favourable source for producing energy through the areas of Suez Gulf, Red Sea coast between Ra's Ghareb and Safaga and east of Owainat as these areas are characterized by a wind blow at a relatively constant velocity.

Average wind velocity in these areas reaches 10m/sec. In 2005/06, 71 turbine stations at a capacity of 60 MW were established and the sixth phase of electricity generating station from wind energy at a capacity of 85 MW was completed. The seventh and eighth phase at capacities of 120 MW and 80 MW respectively are under construction, in addition to establishing new wind stations at a capacity of 420 MW. The capacity till 2010 will reach 850 MW and represent 3% of demand on electric energy in that year.

Wind Atlas was issued by which Egypt ranked 30^th on the world level in that concern. So, 3 wind-power electric generator stations were erected in az-Za'afarana, Az-Zait mountain and Sharm el-Sheikh.

Egypt is considered one of the first countries that used peaceful nuclear energy in the region where there were many attempts through establishing the Nuclear Energy Committee in 1955 and the Nuclear Energy Institution in 1957.

The first nuclear reactor in Egypt was operated in 1960 in Anshas for the purpose of making nuclear researches and producing radioactive isotope to serve the industrial and medical development as well as search for petroleum in wells and gas tubes soldering. Its capacity was 2 MW. The reactor was developed over the past 15 years to cope with hi-nuclear technology in operation and control.

A new multi-purpose and peaceful usage research reactor was established in 1997. However, few amendments were needed to operate safely to the maximum capacity of 22 MW.

Then, it was reopened in 2003 and worked regularly ever since. As for producing electricity from nuclear energy. Egypt has launched establishing a nuclear power station to generate electricity and water desalination in 1967.

In 1981, the first electricity generating station from nuclear energy was allocated in Al-Daba'a region on an area of 12 km². But the project stopped in the aftermath of Chernople station incident in 1986. The discovery of natural gas had a great effect on closing the nuclear file for producing electricity temporarily.

After the technology development of nuclear reactors, Egypt launched to establish electricity generating stations from nuclear energy especially that Egypt has many advantages such as the equipped site in Al-Daba and a big group of experts. The usage of nuclear energy will make a leap in many industries such as in petroleum by using thermal energy generated from nuclear energy.

Total implemented investments in the Investment climate

electricity sector of 2005/06 reached about LE 5.813 billion to provide electric energy for about 99 percent of population. The amount of electric generation capacity by the and of 2005/06 reached about 20308 MW. The total amount of generated power reached about 107.5 billion kw/h including 94.4 billion kw/h from thermal plants, 12.6 billion kw/h from hydraulic plants and 0.5 billion kw/h from wind plants.

Description	Unit	2005/06
Electric Generation Capacity	MW	20306
Generated Energy	Kw (billion)/h	107.5
Consumed Energy	Billion kw/h	92.87
Number of villages, hamlets and affiliates lighted by electricity	Number	38826
Number of workers in the Electricity Sector	Thousand laborer	168.988
Number of subscribers	Thousand subscriber	21555
Investments	LE million	5813

Uses	Quantity	Relative Structure %
Industry	32706	35.2%
Agriculture and Irrigation	3718	4.0%
Government bodies and public utilities	15751	17.0%
Household uses	6152	6.6%
Commercial and other uses	6152	6.6
Exports	766	0.8%
Total	92871	100%

Electricity sector succeeded to link the unified electric grid in Egypt with Arab and African Countries' grids and hence with European Countries.

The most important Egyptian electric linkage projects are the seventh linkage project including Egypt, Jordan, Iraq, Lebanon, Libya, Syria and Turkey. In 2005/06 the exchange of security reserve between Egypt and linkage countries (Jordan, Libya and Syria reached about 766 million kw/h at a total value of US Dollar 57.5 million).

- A study to rise the linkage voltage from 220 kv to 400/500 kv was concluded between Egypt, Libya, Tunsia, Algeria and Morocco in the framework of technical cooperation between Egypt and Arab Moroccan Countries to increase the transferred energy among these countries.

- A consultant contract was signed to study the Egyptian/Saudi electrical linkage and participate in the attempts of operating the Libyan/Tunisian linkage line to complete the linkage circle between Arab Morocaan Countries and Europe in addition to electrical linkage programmes with Sudan, Ethiopia and Nile Basin Countries.

Electricity sector applies a chain of procedures with the objective of rationalizing electricity and protecting environment through raising the awareness of electric energy consumers in cooperation with the Ministry of Industry. The ideal standards were applied for energy efficiency machine and air condition.

- Applying engineering and technological systems to reduce pollution resulting from exhausts of electricity generating plants, in addition to applying the programmes of air and water quality surrounding electric power plants.

- Implementing the project of improving energy efficiency and reducing carbon dioxide emission agent at a total cost of US Dollar 5.9 million.

Petroleum sector represents a fundamental mainstay in Egyptian economy as it comes on top of Egyptian exports. Petroleum secures about 92 percent of primary power needs in Egypt. Petroleum sector achieved tangible achievements over the past few years that reflected on the performance sector rates either in the field of production, research, prospecting or exportation.

The exerted efforts contributed to the field of research and discovery in achieving about 648 petroleum and gas discoveries during the past 25 years including 294 discoveries during the period 1998/99 and 2005/06.

2005/06 witnessed 42 discoveries including 22 for crude oil and 20 for natural gas. These discoveries contributed in increasing crude oil, natural gas and condensated reserves to reach 15.8 billion.

The past 5 years witnessed the signing of 99 petroleum agreements that represent the cornerstone of the activities of prospection and exploitation during the coming decade with a total cost of more than US Dollar 3 billion.

This period witnessed the first discovery of crude oil in Mediterranean deep water, in addition to the exploration of crude oil in Delta for the first time, which reflects the future horizons for increasing crude oil and natural gas reserves.

The year 2005/06 witnessed the highest production achieved in the history of petroleum sector. Total production of crude oil, condensates, liquified gas and natural gas reached about 73.67 million ton including about 36.67 million ton from crude oil, condensates and butane gas and about 37 million ton from natural gas.

Petroleum production is concentrated in five main areas; Suez Gulf which produces 43 percent of the total production of crude oil and 8 percent of gas production, Eastern Desert which produces 8 percent of crude oil, Western Desert which produces 21 percent of oil and 36 percent of gas, the Mediterranean Sea whose production reaches 6 percent of oil and 59 percent of gas, Sinai area which produces 12 percent of oil and 1 percent of gas.

Petroleum sector succeeded in holding 77 petroleum agreements during the past three years reached about US Dollar 3.5 billion, within the framework of the petroleum sector keenness on developing prospecting for petroleum and exploitation agreements in order to support and increase petroleum wealth to provide the needs of the coming generations from energy powers and achieve self-sufficiency of petroleum production for domestic market and export the surplus to increase export revenue with hard currencies.

The foreign investment in petroleum sector increased to about 67.6% from the total direct foreign investments in 2005/06. The implemented investments in the first six months of the year reached about US Dollar 1854.1 million.

The amount of targeted investments of petroleum, gas and petroleum products in 2006/07 reached about LE 16.6 billion representing about 12.3% of total investments where LE 3.7 billion for crude oil, LE 10.2 billion for natural gases and about LE 2.7 billion for petroleum products.

Within the framework of preserving Egypt's wealth of petroleum, petroleum sector followed a policy for rationalizing crude oil production and expanded national gas production after increasing the discovered gas value in Egypt during the past six years that reached about 5 trillion feet annually. So proven reserves of natural gas reached about 67 trillion feet in 2006 against 36 trillion feet³ in 1999. Total exports of crude oil, natural gas, petroleum products and petrochemicals reached about 401 million equivalent ton during 2005/06. The exports value of petroleum sector rose from US Dollar 1 billion in 1999 to US Dollar 11.5 billion in 2005/06. It is expected to reach US Dollar 12 billion in 2006/07.

This contributed to providing Egypt with about US Dollar 8 billion till now, including US Dollar 4121 million in 2005/06. Egypt ranks seventh in producing natural gas worldwide on the natural gas exportation map. In July 2003, Egypt started to export gas through the Arab gas pipeline (el-Arish-Taba-A'qaba). In 2005, Egypt accessed the countries that exporting liquefied gas.

The constant increase of domestic demand on petroleum products and natural gas is considered the most important challenge that faces oil and gas industry in Egypt. Consumption volume increased from about 30 million ton in 1999 to 52 million ton in 2005/06. It is expected to reach 53 million ton in 2006/07.

The value of domestic market needs of petroleum products and gas during 1998/99-2005/06 reached about US dollar 77 billion with international prices. Petroleum sector has provided LE 138 billion of its interests to cover the direct support value of petroleum products and natural gas including LE 42 billion; the support value of this year.

Petroleum sector seeks to maximize the use of natural gas in domestic consumption. So, natural gas reached about 2.3 million populated unit till June 2006, in addition to converting about 70,000 cars to use natural gas and establish 103 gas station. The lengths of natural gas networks reached about 16,000 km.

The consumption rates of natural gas witnessed an unprecedented increase as it reached about 2010 million feet² daily in 2000/01, at an increase of about 50 percent during six years. Egypt ranks first in gas consumption in Africa. Egypt has begun a national plan to provide 6 million populated units with natural gas, 1000 industrial buildings all over Egypt during the coming six years with investments of LE 30 billion.

Petroleum industries succeeded to achieve a wide leap over the past years due to the presence of national integrated industries in fields of exploration, production, refining, transportation, distribution and exportation that encourage the greatest international companies to invest in petroleum sector, natural gas and petrochemicals. Egypt embarked upon new fields as natural gas liquefaction and exportation projects as well as liquefied propane and polyethylene among other production projects.

There are nine refineries in Egypt, their productive power reach about 35 million ton annually. Crude transmission networks lengths reach 4600 km. The estimated investments for petroleum refinery are about LE 2695.5 million in 2006/07 plan.

Petroleum sector succeeded in attracting foreign investments to participate in implementing giant projects of gas liquefaction and exportation which are:

- Natural gas liquefaction plant placed in the free zone in Damietta is considered the greatest one in the world in terms of design and total power that reaches 7.5 billion m³ of natural gas annually. This amount is enough to produce 4.8 million ton of liquefied natural gas. The project's investments reach about US Dollar 1.3 billion and is implemented by a Spanish-Egyptian company.

- Edkos' Gas liquefaction compound project, including two units for gas liquefaction with production power 10 billion m³ annually reach US Dollar 1400 million. An English, Malaysian and French Companies Contribute to its implementing.

- The United Company for Natural Gas Directives established in Port Said an “Egyptian Joint Stock Company” operating with Free zones system with a capital of US Dollar 4.2 million. The factory of separating directives was established on an area of 115 feddans. The annual production rate of the factory reached about 280,000 tons of propane, 330,000 tons of butane gas and a million barrels of condensates.

A long term plan has been implemented to establish 24 petrochemical projects with investments of US Dollar 10 billion contributing to producing 15 million ton petrochemical products annually.

The Ministry of Petroleum established the Egyptian Petrochemical Holding Company to implement the petrochemicals national plan. The company succeeded in attracting international investments to participate in implementing phase I that include the establishment of 8 giant projects with investments of US Dollar 5.3 billion. Latest years witnessed the development of Egyptian exports of propane, polypropylene and alkyl-benzene in addition to exporting polyethylene.

During the latest years, petroleum companies succeeded to expand its activities abroad and increased its share in the markets of neighbouring countries. It gained many international tenders to implement giant projects in Arab countries which are Saudi Arabia, Kuwait, Qatar, Syria, Jordan, Libya, Sudan, Yemen and Algeria, in addition to Angola.

The contract to develop Al-Kafigi field in the neutral zone project between Saudi Arabia and Kuwait is considered the greatest project for petroleum sector outside Egypt. The contract value is US Dollar 722 million.