Abu Dhabi National Oil Company, Germany's BASF, Austria's Borealis and Indian conglomerate Adani Group are looking to invest up to $4 billion (Dh14.7bn) in a renewables-powered chemicals complex in the western Indian state of Gujarat, as part of a push to capture market share in one of the world's fastest-growing hotspots for products.
The partners signed a preliminary agreement to look at developing a joint world-scale propane dehydrogenation plant for the production of propylene based on Adnoc-supplied propane feedstock, with power for the scheme to come entirely from renewable sources.
Propylene is key in the production of plastics, as well as other chemicals.
The partners are currently in advanced stages of co-investing in a wind and solar park to help power the facility, which would be the world's first CO2-neutral petrochemicals site, Borealis said in a statement. Feasibility on the plant is expected to be finalised by the first quarter of next year, with production expected to come online in 2024.
Some of the propylene produced at the facility will be partially optimised as feedstock for a planned polypropylene plant to be developed by Adnoc and Borealis. It will be the first overseas joint venture in chemicals for the two partners, who are joint stakeholders in Abu Dhabi's Borouge, which is also developing a new polypropylene plant in the emirate as part of the emirate's efforts to triple chemicals production by 2025.
The partners will develop the plant at Mundra Port in Gujarat, with the products primarily destined for the Indian market, targeting industries such as construction, automotive and coatings.
"As a value-adding partner, Adnoc will play a crucial role as the propane feedstock supplier to this project," said Adnoc group chief executive and UAE Minister of State, Dr Sultan Al Jaber.
"As the fastest-growing global energy market, India is crucial to our international growth ambitions in the downstream sector. As such, this project allows Adnoc and its partners to capture the promising growth in the Indian polyolefins market," he added.
The agreement marks a potential second venture for Adnoc in India. The company is also looking to invest in a joint venture with Aramco in a planned $44bn integrated refining and petrochemicals complex with Indian refiners on the country's west coast. The 1.2 million barrels per day scheme will be developed in Ratnagiri in the state of Maharashtra . The Indian petroleum minister Dharmendra Pradhan told reporters in Abu Dhabi last month that he expected the cost of the scheme to be higher than $44bn, with land acquisition for the project currently underway.