Adipec 2021: Adnoc and Borealis sign $6.2bn partnership to expand Borouge's output

Expansion project includes construction of a 1.5-million-tonne ethane cracker, two Borstar polyethylene plants and a cross-linked polyethylene plant

The Ruwais Industrial Complex, outside of the Borouge 3 Tower. Victor Besa / The National

Abu Dhabi National Oil Company and Austrian chemicals producer Borealis have signed a $6.2 billion partnership agreement for the development of the fourth unit of a polyolefin manufacturing complex in the UAE's downstream hub of Ruwais.

Sheikh Khaled bin Mohamed bin Zayed, a member of the Abu Dhabi Executive Council, and chairman of the Abu Dhabi Executive Office and the executive committee of the board of directors of Adnoc, witnessed the signing of the agreement.

“Adnoc and Borealis’ significant investment in the fourth expansion of Borouge ensures the long-term and sustainable supply of core materials to critical sectors vital to both the UAE and global economy,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Adnot

“This expansion will see Borouge become the world’s largest single-site polyolefin complex, as it continues to play an integral role in the development of Ta’ziz, enhancing local industrial supply chains and boosting in-country value opportunities,” he added.

Last year, Adnoc and industrial holding company ADQ announced plans to work on projects worth $5bn within the Ruwais Derivatives Park.

The joint venture, Ta'ziz, will look to invest in chemical projects worth $3bn, with $2bn expected to be spent on the development of port and infrastructure facilities in Ruwais.

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  The Ruwais Industrial Complex is located 250 kilometres west of the UAE's capital, Abu Dhabi. Victor Besa / The National

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  Adnoc plans to build a large-scale 'blue' ammonia plant at the complex. Victor Besa / The National

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  The ammonia plant will be located at the Ta'zizz industrial and chemicals hub. Victor Besa / The National

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  The birthing area and container terminal in place will allow materials to be easily transported. Victor Besa / The National

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  The view from the Borouge 3 Tower shows the size of the complex. Victor Besa / The National

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  The area will help to grow the UAE's manufacturing and industrial base. Victor Besa / The National

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  Adnoc and CNPC have agreed to explore downstream and upstream partnership opportunities. Victor Besa / The National

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  The facility will have the capacity to produce 1,000 kilotonnes of ammonia per year, Adnoc says. Victor Besa / The National

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  Blue ammonia is a more easily transportable fuel source made from blue hydrogen. Victor Besa / The National

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  The UAE is drawing up a comprehensive road map to position itself as an exporter of hydrogen. Victor Besa / The National

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  Adnoc already produces 300,000 tonnes of hydrogen annually and plans to expand this to more than 500,000 tonnes. Victor Besa / The National

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  A sign displays the old name of Adnoc’s gas processing plant. Looking ahead, the company plans to achieve gas self-sufficiency by 2025. Jennifer Gnana / The National

Borouge, a joint venture between Adnoc and Austria's Borealis, is going through a large capacity addition as part of plans unveiled in 2018 by the national oil company to invest $45bn with partners in the downstream sector.

The Emirates plans to triple its petrochemical production capacity from 4.5 million tonnes — currently produced entirely by the Borouge facility in Ruwais — by 2025.

The feedstock for the planned expansion will be supplied by Adnoc.

The new facility will see Borouge produce polyolefin products such as polyethylene and polypropylene, as well as non-polyolefin products such as benzene and butadiene. The compounds find varied uses in packaging, plastics and acrylics industries.

With the addition of the new unit, Borouge could produce enough polyolefins to meet the manufacture of pipes to supply water to 35 million households, the company said. The new products will feed into a wide range of uses including industrial-grade pipes, cables, films and personal protective equipment.

“Borouge is the key vehicle that enables us to serve the growing customer needs across the Middle East and Asian markets with future-orientated and differentiated solutions based on Borstar, Borealis’ proprietary state-of-the-art technology,” said Thomas Gangl, chief executive at Borealis.

The company also plans to install a carbon capture unit to offset emissions by 80 per cent. The unit will be operational in time for the start-up of Borouge 4.

Borouge operates a 450,000 tonnes per annum polythene unit, which was commissioned in 2001. Borouge 2 and 3, commissioned in 2010 and 2014, raised the capacity to 2 million tonnes and 4.5 million tonnes of polyethylene and polypropylene per annum, respectively.

With the final unit, overall polyolefin production will reach 6.4 million tonnes, making Borouge 4 the largest-single site facility for polyolefins.

The increased output will capture the growing demand for polyolefins in the Middle East, Arica, and Asia.

Borealis, the Austrian company which is a joint shareholder with Adnoc, is the eighth-largest producer of polyethylene and polypropylene and has oil and gas company OMV as a significant minority shareholder.

Adipec 2021 day one - in pictures

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  Suhail Al Mazrouei, Minister of Energy and Infrastructure, speaks at the Abu Dhabi International Petroleum Exhibition and Conference. All photos: Victor Besa / The National

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  Mohamed El-Erian, chief economic adviser of Allianz, addresses a session at Adipec.

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  Paul Polman, former chief executive of Unilever and co-chair at Global Commission for Economy and Climate, attends a session at Adipec.

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  Adipec participants attend a session with Paul Polman, former chief executive of Unilever and co-chair at Global Commission for Economy and Climate, holding centre stage.

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  Adipec will run from November 15 to November 18 at the Abu Dhabi National Exhibition Centre.

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  Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, says oil and gas industry will have to invest more than $600bn annually until 2030 to keep up with expected demand.

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  Adipec 2021 is the first major global event after Cop26, which concluded on Sunday.

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  Adipec is said to be a critical bellwether for the fortunes of the energy industry in the middle of great change.

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  Dr Fatih Birol, left, executive director of International Energy Agency, and John Defterios, Professor of Business at NYU Abu Dhabi attend an Adipec session.

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  This year's event is taking place after the UAE, Saudi Arabia and Bahrain all committed to achieving a net-zero future by the middle of the century.

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  Alfred Stern, chief executive of OMV, attends a panel discussion on 'What is the New Normal for Demand?'

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  Yousef Gamal El Din, anchor of Bloomberg, and Russell Hardy, chief executive at Vitol, during a session on 'Trading Spotlight: The Diversification of Energy Markets'.

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  Nicolas Terraz, of TotalEnergies, attends Adipec session on 'What is the New Normal for Demand?'

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  Yaser Al Mazrouei, executive director of Upstream Directorate at Adnoc, attends the Adipec session on 'What is the New Normal for Demand?'

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  Lorenzo Simonelli, chairman and chief executive of Baker and Hughes, during the Adipec session on 'What is the New Normal for Demand?'

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  Mansoor Al Hamed, chief executive of Mubadala Petroleum, attends the Adipec session on 'What is the New Normal for Demand?'

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  Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, attends the opening ceremony at the 37th Abu Dhabi International Petroleum Conference and Exhibition. Photo: @HHMansour via Twitter

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  Sheikh Mansour bin Zayed and Dr Sultan Al Jaber take in the atmosphere at the 37th Adipec. Photo: @HHMansour via Twitter