Abu Dhabi has signed an agreement with one of Europe’s petrochemical leaders to build the world’s largest chemicals complex as part of the emirate’s ambitious programme to expand non-oil industries and diversify its economy.
The International Petroleum Investment Company (IPIC), Abu Dhabi’s downstream investment arm, said it signed the deal with Borealis, a leading European petrochemical firm and one of the largest plastics producers.
“IPIC and Borealis AG have signed a memorandum of understanding with the Abu Dhabi Investment Council to prepare jointly for the first phase of the development of a chemicals industrial city to be located in Abu Dhabi,” IPIC said in a statement carried by Wam.
“The multi-billion-dollar project comprises a world-scale naphtha cracker downstream propylene and ethylene derivatives; a world-scale reformer, xylene, benzene, cumene, phenol and derivatives units. On completion of the first phase in 2013, the complex will be the largest and most integrated of its kind in the world.”
It said the multi-billion-dollar project, which had been in the pipeline for two years, would support Abu Dhabi’s strategy of diversifying its economy.
“This new development brings together three committed partners to achieve a steep change in Abu Dhabi’s participation in the chemical industry,” said Khadem Al Qubaisi, IPIC managing director and deputy board chairman of Borealis.
“With this new venture we will become an industry model for chemical integration, while helping support the goals of Abu Dhabi to diversify its economy.”
IPIC controls 65 per cent of Denmark-based Borealis, while the rest is owned by IPIC’s partner, OMV Aktiengesellschaft of Austria.
Borealis owns 40 per cent of Abu Dhabi’s Borouge company, which said last year it would pump more than $2.5 billion (Dh9.1bn) into expansion projects at its Ruwais petrochemical complex to lift output capacity to nearly three million tonnes per year to face surging demand by its Middle East and Asian clients.
The company, which is 60 per cent owned by the Abu Dhabi National Oil Company (Adnoc), said it had completed a debottlenecking project to boost its polyethylene output from around 450,000 to nearly 600,000 tonnes per year after a sharp increase in demand.
The expansion means Borouge, which was established in 1998, will become one of the biggest polyolefins producers in the region as the projects cover ethylene, polyethylene and polypropaline.
Abu Dhabi has been locked in a drive to expand its hydrocarbon industries, including refining and petrochemicals, to face growing global demand, diversify its economy and tap its enormous oil and gas reserves, estimated at 92 billion barrels and 6.5 trillion cubic metres respectively.
65%: Of Denmark-based Borealis is owned by the International Petroleum Investment Company of Abu Dhabi
40%: Of Abu Dhabi’s Borouge company is owned by Borealis of Denmark
$2.5bn: Will be pumped into expansion projects at Borouge’s Ruwais petrochemical complex to lift output capacity to nearly three billion tonnes per year to meet surging demand by its Middle East and Asian clients