The Abu Dhabi National Oil Company (ADNOC) and ADQ signed a joint venture (JV) agreement to create a new investment platform to fund and oversee the development of industrial projects within the planned Ruwais Derivatives Park.
The agreement was signed by H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, and H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ.
Under the terms of the agreement, ADNOC and ADQ will jointly evaluate and invest in anchor chemicals projects. ADNOC will hold a 60 per cent majority equity stake in the JV with ADQ holding the remaining 40 per cent. ADQ’s extensive portfolio, including local and international logistics and transport, power and water, industrial construction, and other essential infrastructure and enabling services, will complement ADNOC’s strong hydrocarbon feedstock position in Ruwais as well as its longstanding relationships with trusted international partners and investors. These combined strengths will enhance the overall value proposition of the planned Ruwais Derivatives Park and, in turn, support the long-term growth of the broader Ruwais industrial complex and increased investment in the Emirate of Abu Dhabi.
The JV partners will conduct a comprehensive feasability study to further develop identified projects in Ruwais and take forward those that show maximum potential for value creation. The JV plans to announce the results of this study before the end of 2020, including specific details on its selected target projects and the range of potential opportunities available for prospective investors and partners.
H.E. Dr. Sultan Ahmed Al Jaber said: “The range, scale and calibre of resources ADNOC and ADQ each bring to this new chemicals investment platform underscore Abu Dhabi’s position as a leading global destination for international investors and industrial partners. In line with ADNOC’s commitment to smart, responsible investment in the current market environment, as well as our unwavering focus on stretching the margin of every barrel of oil produced, our partnership with ADQ will expand on existing efforts to maximise the value of our assets in Ruwais, to kickstart the development of the UAE’s downstream derivatives sector, support the transformation of Ruwais into a global hub for industry and attract additional foreign direct investment.”
H.E. Mohamed Hassan Alsuwaidi, CEO of ADQ, said: “By partnering with ADNOC to facilitate the development of the investment platform in Ruwais Derivatives Park, we will play a key role, together with the public and private sectors, in providing essential infrastructure development services. At ADQ, we are driving value creation and helping to build a prosperous economy for the benefit of Abu Dhabi through our diverse portfolio of the emirate’s leading entities such as Abu Dhabi Ports, Abu Dhabi National Energy Company (TAQA), Etihad Rail, Emirates Steel, DUCAB and Arkan.”
With the required approvals, the JV will be incorporated in Abu Dhabi Global Markets with both companies jointly determining the JV’s management team and board, in line with global corporate governance best practice.
The development of a robust downstream derivatives industry in Ruwais is the cornerstone of ADNOC downstream’s growth strategy, launched at ADNOC’s Downstream Investment Forum in 2018. ADNOC continues to deliver on the expansion of its downstream business as part of its 2030 smart growth strategy, which will see the Ruwais industrial complex transformed into a globally competitive chemicals cluster, leveraging the UAE’s close geographic proximity to global growth markets, access to competitive feedstocks, streamlined utilities and services offer, as well as Abu Dhabi’s attractive fiscal and regulatory environment.