Adnoc's $3.5bn crude flexibility project is 73% complete

The project allows for additional Abu Dhabi grades such as Upper Zakum to be processed alongside the flagship Murban at Ruwais

Adnoc invited international oil companies and financial institutions in 2018 to invest about $45bn to develop its downstream sector. Courtesy Adnoc

Abu Dhabi National Oil Company’s $3.5 billion (Dh12.8bn) crude flexibility project is 73 per cent complete, the company said.

The project allows for additional Abu Dhabi crude grades such as Upper Zakum to be processed alongside the flagship Murban crude at the Ruwais refinery.

The flexibility project will also allow for the processing of 50 other types of crude at the refining facilities.

"This investment is another step in our progress to develop Ruwais into a dynamic, global hub for downstream activity, further strengthening Adnoc's role as a key driver of the UAE's long-term industrial growth and economic diversification,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group chief executive.

Ruwais has been earmarked for a multibillion-dollar expansion from its current refining capacity of 922,000 barrels per day, which is already the world’s fourth largest, to 1.5 million bpd by 2025, making it the largest.

The UAE accounts for about 4 per cent of global oil production, much of it from onshore and offshore Abu Dhabi fields operated by Adnoc.

The company’s crude flexibility project, which was announced in 2018, allows it to refine 420,000 bpd of heavier and more sour grades of oil.

The project is expected to be completed by mid-2022, the company said.

Upon completion, Adnoc will be able to allocate more Murban crude for export. Murban is a light, sweet crude that fetches a higher price in export markets because it contains less sulphur and is easier to refine.

To expand the Ruwais refinery’s capacity to process different crudes, Adnoc has installed much of the required infrastructure.

South Korean-made fractionators required to separate component products from crude were installed in June and July.

Adnoc has increasingly made the development of its downstream sector a priority as it looks to earn more revenue from the export of crude and products.

In 2018, Adnoc invited international oil companies and financial institutions to invest about $45 billion (Dh165.3bn) to develop its downstream sector.

Last year, Italian energy major Eni took a 20 per cent stake while Austria's OMV took a 15 per cent stake in Adnoc’s refining unit.

The two companies also became part of a trading joint venture, Adnoc Global Trading, to sell products from the Ruwais refinery to customers in Asia.

In July, Adnoc formed a joint venture with Abu Dhabi’s state holding company ADQ to boost the manufacture of chemicals at Ruwais.

The companies will evaluate and invest in "select, anchor chemicals projects" and attract other investors to the industrial hub in the emirate's Al Dhafra region.