Qalaa Holdings is confident that Egyptian Refining Company (ERC) will cut Egypt’s dependence on oil imports, chairman Ahmed Heikal told Reuters. ERC (Qalaa’s USD 3.7 bn megaproject that is on track to begin production in 1Q2017) will have the capacity to produce 4.2 mn tonnes of refined products per year, which it will sell to Egyptian General Petroleum Corporation (EGPC) at international prices under a 25-year agreement. While ERC will be exposed to EGPC’s USD shortages, Heikal said there were contract provisions allowing for a rolling letter of credit for oil products that cover the three months going forward. “You have to remember what is the alternative for the government? The alternative is to import. So they will have to pay cash for the products,” he said. And while Heikal is “cautiously optimistic” on the medium-term outlook for Egypt, especially in light of recent gas discoveries, he believes the government will have “no other choice” but to lift energy subsidies.