ADNOC and Ta’ziz are shaping UAE’s next big industrial push – in chemicals

Dubai: Investments in oil and gas created the UAE’s first - and enduring – industrial base. Now, the UAE – with energy giant ADNOC as the fulcrum - is well on its way to creating the next industrial cluster in specialty chemicals.

Leading the way is Ta’ziz, a joint venture between ADNOC and the wealth fund ADQ, which is laying the foundation for the production of specialty chemicals and its many offshoots within Abu Dhabi’s Al Ruwais Industrial City.

All part of a project that Mashal Saoud Al-Kindi calls ‘Ta’ziz 1.0’, which will lead to the UAE becoming a global hub for a new generation of advanced industry. There will be a ‘world-scale’ 1.8 million ton per annum methanol plant and more - much more. 

In an interview with ‘Gulf News’, Al-Kindi talks all things chemical why the Ta’ziz formula is the best to make things happen.

Typically, entities developing UAE’s industrial and economic hubs don’t take direct participation in the projects within it. But you are a shareholder in the methanol plant while also building the infrastructure at Ta’ziz. Why? 

Mashal Saoud Al-Kindi: When you want to diversify further, you bring in the value chains that the UAE already has. So, if it’s to build on the gas value chain, it would be ethane, methane, ethane, ethylene.

The intention behind Ta’ziz is be the catalyst for industrial development in chemicals. And accelerate the process.

Now, such endeavors need large amounts of investment, plus proprietary technology. If we wanted just an industrial park for such projects, it would be difficult to get that from the private sector at the start. Plus, as Ta’ziz, we can better use the feedstock reliability that comes from our existing value chains.

So, it’s a step-wise process.

Essentially, Ta’ziz is doing much of the initial heavy lifting?

Mashal Saoud Al-Kindi: We don’t place any condition that we need to be an equity owner in everything at Ta’ziz. But as a beginning, we are develop the ecosystem, which is a capex intensive exercise.

That means, for instance, creating a chemical tank farm, because each chemical requires its own kind of tanks and facilities to be able to ship that out.

It would also mean being a utilities hub, because when you have economies of scale, utility rates can become more competitive.

What would be your core focus when it comes to chemicals that Ta’ziz will produce?

Mashal Saoud Al-Kindi: The three main areas for us are going to be PVC (polyvinyl chlcoride), methanol and low carbon ammonia.  Moving forward, there will be no such limitation on what can be taken up in Ta’ziz.For instance, with methanol, you can develop a business in formaldehyde, acetic acid. With PVC, you can have all kinds of end-product industries set around the amount of PVC we will produce.

The sky is the limit…

Plus, Ta’ziz will also develop all of the support infrastructure?  

Mashal Saoud Al-Kindi: It is about capitalizing on what already exists, and creating new ones for international and local investors to be part of. Ideally, at the end of the day, have them own these businesses that create end-products based on the chemicals produced in Ta’ziz.

We also have the railway, port and roads connected from all angles at Ta’ziz.

What Ta’ziz does is allow Abu Dhabi and ADNOC to have a stake in how transition fuels evolve - because that’s the future. Things like methanol, things like low carbon ammonia.

You keep mentioning Ta’ziz 1.0 – is there a specific timeline for Phase 1 to be over?

Another 5 years would be reasonable for us to complete the three main chemical projects. We would also have started thinking serious about future phases – Ta’ziz 1.5, Ta’ziz 2.0, etc.

We have set up joint ventures for all the infrastructure required for Ta’ziz 1.0, whether on the power side, roads and infrastructure, the tank farm, and the logistics and terminal (requirements).

Someone looking at Ta’ziz now might say it’s only meant for the biggest of big names in the chemicals business. Your thoughts…

We have a partnership with seven local entities on our chemical projects and they are not major chemical players on the world stage. They are basically putting skin in the game, just like ADQ or ADNOC are doing.

It’s the start of the PPP (public-private partnership) model, which we have thought about from the inception of Ta’ziz.