Abu Dhabi-based petrochemical maker Borouge Pte Ltd. will more than triple the production of polyolefins, used for making plastics, to almost two million tonnes per year (tpy) in five years, the company said yesterday.
Borouge a joint-venture between Denmark-based petrochemicals group Borealis and Abu Dhabi National Oil Co will add 540,000-tpy of polyethylene and 800,000-tpy of polypropylene to the current complex, Chief Executive Hubert Puchner said.
The $1.2 billion petrochemical complex in Ruwais, Abu Dhabi, now has a capacity of 600,000-tpy of the feedstock ethylene and 600,000-tpy of polyethylene, after the company already expanded its polyethylene capacity in March this year from 450,000 tpy.
"We think polypropylene growth is quite robust, quite sustainable. Feedstock propylene may be a bit shorter than ethylene," Puchner told a news conference in Singapore.
HSBC is the financial adviser for the expansion project, Puchner said, but declined to elaborate on the size of investment.
He said the expansion would boost the company's leading position in supplying polyolefins especially for making pipes, wires and cables in the Middle East and Asia Pacific, where demand is projected to grow more than 5 percent a year.
Borouge estimates its total revenue this year at $800 million from $700 million in 2004.
Puchner said that demand growth for light oil product naphtha in the Middle East was expected to ease as petrochemical makers turn to using more ethane from natural gas, which is more accessible, as an alternative feedstock for ethylene.
"Naphtha is still growing in demand here. But more and more the share in the petrochemical industry from the feedstock point of the view will grow in the gas front," he said.
Middle East and Africa account for 35 per cent of Borouge's total sales while Northeast Asia, led by China is the second-biggest market, accounting for 30 per cent.
Borealis is the world's sixth-largest maker of polyolefins, grouping polyethylene and polypropylene the basic building blocks for plastics. Borealis is an unlisted firm 65 per cent-owned by Abu Dhabi's International Petroleum Investment Co. (IPIC) and 35 percent by Austrian oil firm OMV.