Dubai: A major contract to carry out construction work on Abu Dhabi's Borouge 3 expansion project has been awarded to a joint venture between Italian contractor Tecnimont (Maire Tecnimont Group) and Samsung Engineering.
The $403 million (Dh1.47 billion) deal, coordinated by Mashreq and First Gulf Bank, will effectively finance a syndicated facility for the engineering, construction and procurement works of the project, a statement from Mashreq said yesterday.
Output boost envisaged
Borouge, a joint-venture between the Abu Dhabi National Oil Company and the Austrian plastics solutions company Borealis, is investing in an innovation centre in the UAE capital that is scheduled for completion by the end of this year.
The Borouge 3 project aims to increase production capacity at the company's petrochemicals plant in Ruwais to 4.5 million tonnes of polyolefins per annum by 2014.
Karim Mahmoud, Co-Head of Mashreq's Corporate Investment Banking Group, said the deal with Tecnimont and Samsung Engineering demonstrated the important role that banks play in funding large scale projects in the GCC.
"This is our contribution to encouraging the contracting finance and energy sectors in the region. In the past, Mashreq has demonstrated its ability to manage and structure a financing facility that is attractive for its clients and we are delighted to take this legacy forward with out esteemed partners involved in this project," he said. "The participation of Deutsche Bank in the facility also demonstrates the strategic importance and commitment of banks for similar sizeable GCC projects," he added.
Two turnkey projects
The $1.6 billion (Dh5.87 billion) Borouge 3 project is composed of two turnkey projects owned by Abu Dhabi Polymers Company Limited and is scheduled for completion by the first quarter of 2014.
The current capacity of the Borouge 1 plant, which started production in 2001, is 600,000 tonnes of polyethylene. The company aims to expand its capacity to two million tonnes a year with Borouge 2.
