ADNOC signs agreement with Borealis for petchem projects

ADNOC signs agreement with Borealis for petchem projects

Jul 17, 2017
4 min read
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The Abu Dhabi National Oil Company (ADNOC) said it signed a framework agreement with Austria's Borealis to move forward with its Borouge 4 petrochemical complex and begin tendering for a polypropylene plant.

Under the agreement, ADNOC and Borealis will move to the pre-feed (front end engineering and design) stage for the construction of the Borouge 4 complex, which encompasses a world-scale, mixed feedstock cracker, using existing feedstock available in Abu Dhabi and downstream derivatives units for both polyolefin and non-polyolefin products, ADNOC said in a statement late Sunday.

The proposed Borouge 4 complex is slated to come on stream around 2023 and will be integrated with ADNOC’s Takreer refinery.

Additionally, the companies agreed to engineering, procurement and construction tendering for an additional polypropylene plant based on Borealis’ proprietary 'Borstar' technology.

The plant, to be integrated with the existing Borouge 3 complex, will add value to the surplus propylene available from Takreer’s new Propane DeHydrogenation unit, producing around 0.5 million tonnes per annum of polypropylene.

"We are committed to realising downstream growth and stretching the value from every barrel of oil we produce,” Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of ADNOC said. He said the agreement also supports ADNOC’s smart growth and partnership strategy.

"ADNOC is determined to work with like-minded partners, such as Borealis, as we unlock and create long-term, sustainable value for the UAE. 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."

The Borouge joint venture was established in 1998 and production has progressively ramped up with the consecutive completions of the Borouge 1, 2 and 3 complexes. Current production capacity is 4.5 million tonnes per year following the successful start-up of Borouge 3 in 2016.

Borouge’s products are aimed for the automotive and energy markets as well as in pipe, agricultural film and the rigid and flexible packaging sectors.

"Global demand for polyolefin products is being driven by the growth in emerging economies," said Mark Garrett, Borealis chief executive. “Both ADNOC and Borealis are determined to take advantage of Borealis’ leading edge Borstar technology, a world-leading product portfolio and a favourable geographic location at the pivot point between East and West, to capitalise on the markets of steepest growth in Asia."

Under the framework agreement, ADNOC and Borealis will also review the extension of their successful Borouge joint venture beyond its first 30-year lifetime.

Earlier this month, ADNOC announced the expansion of its strategic partnership model to span the group’s entire value chain as well as the more active management of its portfolio of assets. This new initiative builds on ADNOC’s flexible operating model and its 2030 growth strategy.

As part of its 2030 strategy, ADNOC aims to expand petrochemical production from the current 4.5 million tonnes per year to 11.4 million tonnes per year by 2025.