Dubai: Abu Dhabi National Oil Company (Adnoc) announced on Sunday it has signed a framework agreement with Borealis to advance two key projects that will expand their joint petrochemical activities in Ruwais.
In a statement, Adnoc said the agreement was part of the company’s aim to expand petrochemical from the current 4.5 tonnes per annum to 11.4 million tonnes a year by 2025. It did not, however, dislose the value of the deal.
Under the deal, Adnoc and Borealis will move to the front-end engineering and design stage for the construction of the Borouge 4 complex, which is expected to come on steam around 2023. The complex encompasses downstream derivatives units for both polyolefin and non-polyolefin products, and will be integrated with Adnoc’s Takreer refinery.
“The Borouge 4 complex and polypropylene plant will allow us to grow our current petrochemical production to almost 10 million tonnes per year, enabling us to take advantage of the market opportunities we have identified, particularly in Asia, where the high-grade polymer market is set to double by 2040,” said Dr Sultan Al Jaber, the UAE’s Minister of State and group chief executive officer of Adnoc.
Mulling IPO
The announcement comes just a week after Adnoc said it is expanding its partnership model to target investment opportunities in the oil and gas sector to capitalise on key trends in the energy industry. Adnoc also said it is considering an initial public offering of minority stakes of some of its services businesses.
On Sunday, Adnoc and Borealis said they have also agreed to commence engineering, procurement, and construction tendering for an additional polypropylene plant, which will be integrated with the existing Borouge 3 complex.
Al Jaber said in a statement that Adnoc is committed to “realising downstream growth and stretching the value from every barrel of oil”.
The Borouge joint venture was established in 1998, and production has ramped up with the completions of the Borouge 1, 2, and 3 complexes. Current production capacity is at 4.5 million tonnes per year following the start-up of Borouge 3 in 2016.
