Egypt’s Micro, Small, and Medium Enterprises Development Agency (MSMEDA) has signed two contracts to convert 4,000 cars from diesel to compressed natural gas (CNG) fuel. The contracts were signed by Engineer Tarek Al-Mulla, Minister of Petroleum and Mineral Resources, Mrs. Niven Jameh, CEO of the SME Development Agency and representatives of Cargas and Gastec.
The contracts are valued at EGP 20 million (USD 1.12m) and arise out of the government initiative “Towards Natural Gas”. The initiative aims to provide support and funding for the expansion of vehicles switching to CNG.
After the signing, Mulla said that the Ministry of Petroleum’s intention to expand the nation’s fleet of natural gas vehicles comes from its commitment to develop and facilitate services for citizens and to provide different types of fuel to the consumer in the local market, including natural gas, which is characterized by low cost compared to gasoline and diesel.
The Ministry press release states the use of natural gas is “highly acceptable for its multiplicity of advantages. A cubic meter of natural gas is equivalent to the consumption of a liter of gasoline as well as the increase of the octane number of natural gas as fuel for cars, and its use represents an important environmental dimension because it is the safest type of fuel D, pointing out that the partnership and cooperation between the Ministry and the project development agency comes within the framework of its desire to provide solutions and provide practical initiatives that contribute to facilitating the citizens in the cost of converting their cars to work with natural gas as fuel.”
Mullah said that the wider use of natural gas as a fuel for cars contributes to reducing pressure on imported gasoline and diesel. Furthermore, the support of the State is justified by the added value brought to the community through the establishment of manufacturing industries that serve this activity and new stations and conversion centers.
The natural gas vehicle (NGV) population in Egypt is approximately 248,000. The conversion program aims to lift the conversion rate of vehicles to about 2,600 per month by encouraging owners to take advantage of low-cost advantages and access to finance for the facilitation and expansion of infrastructure of natural gas fueling stations and conversion centres.
For its part, the Executive Chairman of MSMEDA stressed that the signing of new financing contracts for this natural gas project is an extension of cooperation and partnership with the Ministry of Petroleum represented by Cargas and Gastec, by providing an instrument for soft loans to owners of cars to convert them with the lowest interest and extended repayment periods. Thus far, MSMEDA has funded the conversion of 30,500 cars, including 25,500 transport cars and 5,000 passenger cars.
She pointed out that the initiative “Towards Natural Gas” launched in 2018 in cooperation with the Ministry of Petroleum aims to finance the conversion of 10 thousand vehicles to operate with natural gas and the establishment of 50 CNG stations.
The Egyptian International Gas Technology (Gastec) is one of the pioneering companies in the field of establishing and operating CNG fueling stations and conversion centers of vehicles to run on natural gas in Egypt and Middle East.
Car Gas (Cargas) is an affiliated company to the Egyptian Ministry of petroleum, working in the field of conversion and refueling of all types of vehicles to be powered by natural gas as an additional fuel.