Egypt Plans Major Drive for Vehicle Conversions to CNG

| Egypt: Cairo | Source: Ministry of Petroleum

Egypt_Gastec image 2019Egypt’s Minister of Petroleum and Mineral Resources, Tarek Al-Mulla, on August 21st witnessed the signing of a cooperation agreement between the oil sector and the National Service Projects Agency to add the activities of supplying and transferring cars to bi-fuel operation (gasoline/natural gas) in the stations of the National Company for Petroleum Products and Distribution belonging to the Authority.

The agreement was signed by General Mohsen Al-Mahlawi, General Manager of the National Company for Petroleum Products and Distribution, and by Osama Al-Baqli, Chairman of the Egyptian Holding Company for Natural Gases (Egas), Engineer Abdel Fattah Farhat, Chairman of Gastec Company and Engineer Hisham Al-Safti, Chairman of Car Gas Company.

The agreement provides for the introduction of auto supply and conversion activities and services for bi-fuel systems in the vacant areas of the National Company’s stations across the Republic, through Gaztec and Cargas companies specialized in this activity. It falls within the framework of cooperation between the ministries and state bodies to speed up the implementation of the political leadership and government’s program to convert mass transport vehicles to operate with Compressed Natural Gas.

The agreed plan calls for the establishment of 54 natural gas refuelling installations across 15 governorates, including a number of car-conversion centers, by 30 primary and 24 secondary phase stations divided between the two companies. Furthermore, it is intended that 350 new stations be completed in 6 years after the study and selection of suitable sites.

Just weeks earlier, the Minister announced an integrated plan of action to expand the use of natural gas as fuel for vehicles and to motivate citizens to convert their cars to a bi-fuel system (natural gas – gasoline) through facilities and payment facilities. He stated that the Oil Ministry’s plan aims at converting 50 thousand cars annually, a significant increase compared to last year which witnessed the conversion of 33 thousand cars. About 14 thousand cars were converted in the previous year and 7 thousand cars annually over the prior three years.

The plan, in part fulfilled by the above agreement, supports the vision of Egypt’s political leadership and government to replace gasoline and diesel with natural gas in vehicles and mass transportation by coordinating and combining efforts between the concerned ministries of state to develop this project. It includes provision of new financing mechanisms for the construction of supply facilities and the conversion of vehicles for natural gas.

Al-Mulla clarified that the government aims through these measures to facilitate citizens and provide different kinds of fuel to consumers in the local market, especially natural gas, whose use was greatly accepted among citizens. There has also been much public interest in transferring vehicles to natural gas operation during the last two years to benefit from its low cost and high quality in comparison with conventional liquid fuels.

He pointed to the importance of natural gas as one of the most important solutions for rationalizing consumption of gasoline and diesel, lowering the cost of imports, contributing to reducing the support directed to petroleum products and achieving optimum utilization of natural resources, and its use represents an important environmental dimension as it is the cleanest [of hydrocarbon] fuels.

The number of cars operating with natural gas currently in the Republic is about 280 thousand, served by 187 supply stations and 72 conversion centers.

In the context of the concessions made to citizens in paying the cost to convert to CNG, engineer Tarek Al-Mulla pointed out that the two oil-affiliated companies, Car Gas (Natural Gas Vehicles Company) and Gastec (Egyptian International Gas Technology Company), have continued to offer concessions to drivers who want to transfer cars to natural gas and to study the development of new and affordable payment systems. The companies offer easy payment facilities to car drivers who want to transfer their cars through instalment systems of instalment without advance or interest and with simplified contracting procedures.

He added that the savings achieved from the price difference between CNG and gasoline lead to the recovery of the conversion costs incurred by car owners within a short period of times, praising the extended cooperation with the Small and Medium Enterprises (SME) Development Authority in providing the necessary finance for car owners, which resulted in financing the transfer of 34,000 cars at a value of 172 million pounds (USD 10.5 million).

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