Abu Dhabi Chemicals Derivatives Company, better known as Ta’ziz, and Reliance Industries, India's largest private petrochemicals company, have signed a formal shareholder agreement on their new joint venture to develop a major chemicals project at the Ta’ziz industrial chemicals zone in Ruwais.
Reliance is partnering with Adnoc and Abu Dhabi holding company ADQ for the Ta’ziz EDC and PVC joint venture, which will construct and operate a chlor-alkali, ethylene dichloride (EDC) and polyvinyl chloride (PVC) plant with an investment of more than $2 billion, Adnoc said in a statement on Tuesday.
These chemicals will be produced in the UAE for the first time, “unlocking new revenue streams and opportunities for local manufacturers”, the statement said.
The agreement was signed during the visit of Mukesh Ambani, chairman and managing director of Reliance, to Adnoc's headquarters, where he met Dr Sultan Al Jaber, Adnoc's managing director and group chief executive.
They discussed opportunities for partnership and growth across the hydrocarbon value chain.
“Reliance is a valued strategic partner and our collaboration at Ta'ziz underscores the important role of industrial and energy co-operation as a means of strengthening the deep-rooted and friendly ties between the UAE and India,” said Dr Al Jaber, who is also Minister of Industry and Advanced Technology.
“We are building on this partnership and the progress at Ta'ziz to unlock more opportunities to drive the UAE’s industrial and manufacturing growth, while advancing co-operation on decarbonisation, new energies and upstream production.”
The UAE and India signed a Comprehensive Economic Partnership Agreement (CEPA) in February that aims to boost non-oil trade between the two countries to $100bn in five years, from $60bn currently.
The deal, which will take effect on May 1, is expected to support the growth of national industries in the UAE, enhance their competitiveness, accelerate the pace of adopting advanced technology and create competitive advantages in new fields.
The Ta'ziz complex is also expected to benefit from the trade agreement.
The chemicals set to be produced by the Ta’ziz EDC and PVC joint venture with Reliance have a wide range of industrial applications, “enabling local supply chains and meeting growing demand in key export markets”, Adnoc said.
Chlor-alkali enables the production of caustic soda, crucial to the alumina refining process, while EDC is used in the production of PVC, a high-strength thermoplastic material used to manufacture industrial and consumer products such as pipes, windows fittings, cables, films and flooring.
Chemicals is also a priority sector for the UAE's Operation 300bn strategy, which aims to raise the industrial sector’s contribution to national gross domestic product to Dh300bn by 2031.
“The production of chlor-alkali, EDC and PVC will create export opportunities in target markets in South-east Asia and Africa, as well as provide local industry with a source of critical raw materials manufactured in the UAE for the first time, strengthening in-country value,” Adnoc said.
The Ta’ziz EDC and PVC project is making “solid progress” towards the detailed design phase and a final investment decision is expected to be taken later this year.
“I am happy to see the quick progress made by the Ta'ziz EDC and PVC joint venture between Reliance Industries Limited and Ta’ziz in a short time,” Mr Ambani said.
“This joint venture is a testimony to the strong and growing ties between India and the UAE and will be a benchmark for more such projects built on strengths of the two nations.”
Dr Al Jaber and Mr Ambani also exchanged a signed framework agreement to explore collaboration in the exploration, development and production of conventional and unconventional resources in Abu Dhabi as well as to decarbonise operations including carbon dioxide sequestration.
Mr Ambani also met Mohamed Al Ramahi, chief executive of Masdar, to explore potential opportunities for collaboration in renewable energy and green hydrogen, the statement said.
The UAE is creating a global clean energy powerhouse under the Masdar brand, consolidating the efforts of Adnoc, Taqa and Mubadala in renewable energy and green hydrogen.