Maersk’s C2X is Proceeding with Egypt on Methanol Production Study
Efforts to develop Egypt into a hub for methanol production and bunkering are proceeding with an agreement between C2X, a new company launched by A.P. Moller Holding, signing agreements in Egypt to proceed with feasibility studies. The parent of the Maersk shipping line last month announced its majority ownership in C2X, a company established to build, own, and operate assets to produce green methanol.
The framework agreements signed in Cairo on October 4 represent the first steps for C2X. The Egyptian project was initiated in March 2022 with the signing of an initial memorandum of understanding between Egypt and A.P. Moller – Maersk as part of the efforts to build a global supply network for methanol.
C2X steps in to take the lead in the next phase of the effort which involves The General Authority of Suez Canal Economic Zone (SCZONE), The Sovereign Fund of Egypt (TSFE), The New & Renewable Energy Authority (NREA), and The Egyptian Electricity Transmission Company (EETC). The new agreement calls for a deeper collaboration which will produce more advanced technical and commercial studies. According to C2X, following the completion of these studies, the parties will proceed toward final investment agreements for the project.
“This is an important step forward for the global transition to green methanol. Egypt has many natural advantages that support a world class green methanol project including access to low-cost renewables and proximity to the Suez Canal and maritime customers,” said Brian Davis, Chief Executive Officer of C2X.
Speaking about the goals for the project Waleid Gamal El-Dien, SCZONE's Chairman, highlighted that it is the tenth framework agreement signed by the group as they look to advance Egypt’s role in the green economy. He said the agreement with C2X anticipates investments of up to $3 billion for the first phase of the project, which includes a focus on bunkering services for ships. They noted that SCZONE was one of the ports that supported the green methanol bunkering of the first methanol-fueled containership, Laura Maersk, during her maiden voyage from South Korea to Copenhagen.
SCZONE’s Chairman said that the project site possesses the elements that make it well-suited for this effort which will include establishing projects for generating green energy from wind and solar sources. Upon the project’s final stages, he said the aim is to achieve an annual production of one million tons of green methanol.
Egypt has a goal to produce 300 kilotons per annum of green methanol. It is part of an effort that seeks to establish the production of green ammonia and use both of the green fuels to provide bunkering services. Located close to the Suez Canal, they look to build the green bunkering into a leading business meeting the fuel transition needs of the shipping industry.
C2X, with A.P. Moller Holding as the majority owner and A.P. Moller – Maersk as the minority owner, seeks to build its methanol capacity. The company reports that it has a target to have an annual production capacity of more than three million tonnes by 2030. C2X will develop green methanol from various pathways depending on the specifics of the location. In addition to the project in Egypt, they are presently pursuing large-scale green methanol projects at the port of Huelva in Spain, as well as other opportunities across several geographies.