CHSC Limited

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Carbon Holdings Ltd (“CH” or “the company”) is a petrochemicals developer and operator within the midstream and downstream segments in Egypt. CH’s total financing needs of up to $82.5 million (the Investment Plan) will be used to finance asset growth and acquisition of additional shares in; (a) its existing operations; Oriental Polypropylene Company (OPC) with an annual capacity of 180,000 tons per annum (tpa) and Egyptian Hydrocarbon Company (EHC), which aims to produce 350,000 tpa mining grade ammonium nitrate (MGAN); and (b) in the development of projects in the petrochemicals industry in Egypt.OPC is an 180,000 tpa polypropylene producer located in Ain Sokhna, 120 km east of Cairo and 3km west of the Gulf of Suez. It has a renewable 25-year concession for exclusive rights to transport dry goods and liquids from Sokhna Port 1 located 8 km south of OPC’s production facilities. At the port, OPC has a berth with three berthing dolphins for the unloading of 3,500 tons cargo propylene gas tankers. To expand its current propylene storage capacity, as part of this proposed project, OPC will; (a) conduct port dredging to accommodate larger capacity vessels; and (b) install additional propylene storage capacity. Having started operations in 2001, OPC stopped production in September 2011 due to the interruption of delivery of propylene, its main feedstock, from Libya. CH anticipates OPC to soon resume operations by using imported propylene from Abu Dhabi. EHC is completing construction of a 350,000 tons per year (tpa) greenfield mining grade low density ammonium nitrate (LDAN) plant in a 500,000 square meter area bounded by the Suez – Hurghada highway to the east, and Suez Safety Outfitters Company (SSOC) and Oriental Petrochemicals (OPC) to the south. The proposed MGAN Plant will consist of an 850 metric tons per day (mtpd) nitric acid unit, a 1,060 mtpd MGAN unit, and a prilling plant to produce solid ammonium nitrate granules. Storage capabilities at the plant site will consist of tanks for ammonia, nitric acid, sulphuric acid and sodium hydroxide. The liquefied nitrogen which is supplied via truck will be stored onsite in a cryogenic tank. The liquid ammonia offloading and transfer facility will be located at the existing OPC jetty, in Ain Sokhna. Two onshore underground and insulated 10” pipelines will connect the OPC jetty facilities to the refrigerated 20,000 MT ammonia storage tank, located in the project site. The pipelines are 10 km long and are being placed along the utility corridor. The dry ammonium nitrate will be bagged and stored onsite. Once produced, the MGAN will be exported or transported by truck to various in-country locations. In addition to MGAN, the surplus nitric acid will be sold in the local market. Once commissioned the ammonium nitrate plant will operate 24 hours a day, seven days a week.In addition, EHC plan to develop OPC’s existing tanker berth to accommodate the ammonia tankers of up to 22,600 cubic meters capacity by installing a new loading arm on the existing northern dolphin of the OPC berth, constructing a new dolphin, dredging the entrance channel and maneuver area to reach 10 meters water depth, and conducting overall improvements to the existing berth. The proposed OPC/EHC tankers berth will also accommodate a pumping station, refrigeration units and one to two ammonia tankers and two to three propylene tankers per month. The jetty area at Sokhna Port 1 will also have a flare. The proposed OPC/EHC tankers berth is located offshore from the existing old steel sheet piles quay wall port constructed about 35 years ago. The dredged sand volume will be approximately 530,000 cubic meters. The project site is located 35 km from the Suez governorate (permanent residency) and approximately 1 km distant from tourist resorts. In addition, there are few mobile settlements at scattered locations outside the industrial zone due to the presence of a transient Bedouin population.