UAE petrochemicals giant Borouge in deal with ADNOC L&S to boost exports

Dubai: A major boost to UAE's petrochemicals exports will be the main priority for Borouge and ADNOC Logistics & Services in a newly minted 'strategic' partnership.

The service agreement will deliver a 'minimum guaranteed value' of Dh1.95 billion ($531 million) to support the 'next phase of Borouge’s accelerated growth plans'

The alliance will extend to 15 years and will 'support a significant increase in the production and export of petrochemicals from the UAE'.

There will also be operational cost savings derived by Borouge over the full contract term - of which more than $50 million in cost savings and efficiencies will come from the 'first five years alone'.

The agreement covers port management, container handling, and feeder container ship services for the Borouge Container Terminal in Al Ruwais Industrial City.

ADNOC L&S will manage the transportation of up to 70% of Borouge’s annual production. It will increase significantly following the completion of the Borouge 4 plant expansion.

ADNOC L&S will also deploy a 'minimum of two dedicated container feeder ships' to transport Borouge’s products from Al Ruwais to the deepwater ports of Jebel Ali in Dubai and Khalifa Port in Abu Dhabi.

The deal comes as Borouge and JV partner Borealis embark on creating a new globe-spanning petrochemicals entity, including interests in the US.

Borouge is ramping up production capacity by 1.4 million tonnes per annum by the end of 2026 through Borouge 4 expansion.

It will thus become the world’s largest single-site polyolefin complex.

"The partnership with ADNOC L&S will further enhance Borouge’s supply chain efficiency," said a statement.

According to Hazeem Sultan Al Suwaidi, CEO of Borouge, "It brings significant benefits to Borouge; driving substantial operational cost savings and enhancing our Logistics Variable Cost (LVC), as well as complementing our existing rail operations and expanding the flexibility of our supply chain network.

"With the rapid increase in our production capacity, we are advancing our capabilities in delivering differentiated products and solutions efficiently, while keeping pace with rising global demand."