MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) and Borealis have signed a framework agreement, under which the companies will advance two key projects that will expand both ADNOC and Borealis downstream petrochemicals business and support the delivery of ADNOC’s integrated smart growth and partnership strategy, as per Hydrocarbonprocessing.
The agreement was signed by H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of ADNOC and Mark Garrett, Borealis Chief Executive.
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. It will enable ADNOC to unlock and maximize significant value from across the Group, drive business and revenue growth, optimize performance, improve technology transfer, and secure greater access for its products in key growth markets.
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. The proposed Borouge 4 complex is slated to come on stream around 2023 and will be integrated with ADNOC’s Takreer refinery.
Simultaneously, the companies have agreed to commence engineering, procurement and construction (EPC) tendering for an additional polypropylene plant (PP5) 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 (PDH) unit, producing around 0.5 million tonnes per annum of polypropylene.
The Borouge JV was established in 1998 and production has progressively ramped up with the consecutive completions of the Borouge 1, 2 and 3 complexes. Today’s production capacity is 4.5 MMtpy following the successful start-up of Borouge 3 in 2016.
The framework agreement also identifies that ADNOC and Borealis will review the extension of their successful Borouge joint venture beyond its first 30-year lifetime.
Building new capacity in the UAE ensures the long-term security of supply and further enables Borouge to expand its product portfolio and deliver leading edge products. With the proven track record of operational reliability of Borouge, the new assets will support Borouge customers’ growth ambitions in the automotive and energy markets as well as in pipe, agricultural film and the rigid and flexible packaging sectors.
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.
As MRC informed before, ADNOC is targeting rapid growth in demand for its polymer products from China’s automotive industry and the country’s investment in gas and electricity infrastructure. ADNOC is focused on market expansion in China and Asia, where demand for petrochemicals and plastics, including light-weight automotive components, essential utility piping and cable insulation, is forecast to double by 2040.
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.