INSIGHT: Abu Dhabi looks to $20bn petchems plan

19 March 2008 16:02  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--Borealis said last week that it had plans for its newly created base chemicals business but at the time gave no indication of just how big those plans were.

The agreement signed in Abu Dhabi to help build a multi-billion world-scale olefins and aromatics complex illustrates not only the extent of those ambitions but also the drive gathering pace in the emirate to develop its industrial base.

This is a significant project to say the least, with a price tag approaching $20bn (€12.8bn) and one of only a few in the region that will deliver a range of cracker products. Abu Dhabi calls the new complex Chemicals Industrial City.

It will be closely integrated with the emirate’s refining capacity and fed from expanded capacity at Ruwais but be built at a newly developed industrial location at Mina Khalifa, just 50km from Abu Dhabi city.

Details of the project are scarce at this early stage but Borealis and Abu Dhabi-based International Petroleum Investment Co (IPIC) said on Wednesday that the project would comprise a world-scale naphtha cracker, downstream propylene and ethylene derivatives; a world-scale reformer, xylene, benzene, cumene, phenol and derivatives units.

The feeds for a complex of this type would be light and heavy naphtha.

Ostensibly it complements the current olefins and polyolefins expansion at the Abu Dhabi Polymers Co (Borouge) complex in Ruwais but is part of a new drive by Abu Dhabi to expand and develop its industrial economy, led by the Abu Dhabi Investment Council.

The Borouge II expansion at Ruwais, some 300km away, will add 2.1m tonnes of polyolefins capacity based on a 1.2m tonne/year ethane cracker.

Facilities to recover natural gas liquids (NGLs) and 4,800 tonnes/day of ethane are already in place to feed that complex, which is due on-stream in 2010.

The first phase of the Chemicals Industrial City Facility is planned to be on stream by 2013, IPIC and Borealis said.

Sources say the facility will push the limits of naphtha cracking. Its olefins and aromatics facilities will be fed by pipeline.

The plans highlight the importance behind the creation last year at Borealis of its base chemicals businesses group.

CEO Mark Garrett told ICIS news in an interview last week that part of the Vienna-based company’s strategic focus would be growing this part of the company.

Borealis is owned by the Austrian oil group OMV and by IPIC.

The memorandum of understanding (MoU) on the Chemicals Industrial City first phase project plans was signed by IPIC, Borealis and the Abu Dhabi Investment Council.

It is the council that has taken on the role of developing the chemicals sector in Abu Dhabi and gathered together the remnants of earlier plans to produce benzene in the emirate and to produce phenol based on Borealis expertise.

Abu Dhabi has lagged behind other Middle East nations in developing its petrochemicals capabilities but greater industrialisation is being pursed much more keenly now.

Mina Khalifa will be home to a 700,000 tonne/year aluminium smelter and a ‘polymer park’. It's deepwater port facilities are already being developed.

Oil and gas are processed in Ruwais but the remoteness of that location and its lack of deepwater access have not worked in its favour.

Abu Dhabi has also not developed an over-arching master plan for industrial development so the site lacks readily available infrastructure.

The new Abu Dhabi National Oil Co (Adnoc) refinery at Ruwais, however, will also produce 1m tonnes of propylene from a fluid catalytic cracking (FCC) unit. It will be the biggest condensates refinery in the world.

Having pushed as far in ethane-fed polyolefins as seemingly possible, Abu Dhabi is taking a bold step to flesh out its petrochemicals industry and provide the feedstock for further chemicals and industrial development.

The MoU also illustrates the opportunities available to Borealis and its owners IPIC to create a much more broadly-based chemical company built on its polyolefins heritage.

($1 = €0.64)


By: Nigel Davis
+44 20 8652 3214



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index