Abu Dhabi, UAEMonday 18 November 2019

Adnoc likely to tender construction contract for new Ruwais refinery 'after 2021'

Project is at pre-Feed stage, with design work likely to take a further 18 months

Employees at the command centre at the Borouge 3 petrochemical plant. Adnoc is developing the world's largest integrated refining and chemicals complex in Ruwais. Bloomberg
Employees at the command centre at the Borouge 3 petrochemical plant. Adnoc is developing the world's largest integrated refining and chemicals complex in Ruwais. Bloomberg

Abu Dhabi National Oil Company may tender the engineering, procurement and construction contract for a planned refinery and petrochemicals complex "after 2021", according to the company's vice president for downstream operations.

"We’re at the pre-Feed [front-end engineering and design] stage of the new world-scale grass roots refinery and petrochemicals complex at Ruwais," Hassan Al Hosani told S&P Global Platts' Middle East Executive Petroleum Conference in Abu Dhabi.

British oilfield services company Wood Group was awarded the pre-Feed stage contract in March this year and is expected to conclude its work before 2020. Feed refers to basic engineering work that is carried out after the completion of conceptual design and feasibility studies.

The UAE, which accounts for 4 per cent of global crude production, much of it from fields owned and operated by Adnoc, aims to double refining and triple chemical capacity by 2025. Adnoc plans to invest Dh165 billion with partners to develop the world's largest integrated refining and chemicals complex in Ruwais, capable of refining 600,000 barrels per day.

Adnoc will choose the technology provider for the refinery "by the end of the second quarter of next year", said Mr Al Hosani.

"Then you have almost four months to go for Feed and [that] will take almost one and half years," he said. After that, a six-month bidding process will take place to choose a company to carry out engineering, procurement and construction of the refinery, he added.

The refinery could have a capacity of "1.5 to 1.6 million bpd" upon completion, Mr Al Hosani said, with production likely to start in 2026.

A 1.8 million tonne mixed-feed cracker being developed by Abu Dhabi's petrochemicals company, Borouge – a joint venture between Adnoc and Austria's Borealis – was "progressing well" in its Feed stage.

"This project is a key investment for us to strengthen the Adnoc position in the petrochemicals market. The plant is will start in the middle of the next decade," said Mr Al Hosani.

Borouge, which currently has a total annual capacity of 4.5 million tonnes, is expected to have a scope of more than 11.4 million tonnes by 2025.

Adnoc has also taken steps to open up its downstream sector to foreign investment, bringing in Italy's Eni and Austria's OMV as stakeholders in its refining unit, awarding them 20 and 15 per cent interests, respectively.

Eni and OMV also hold equivalent stakes in Adnoc's new trading unit, which will focus on the direct sale of products from Ruwais to customers in Asia. Physical and derivative trading is expected to begin next year, following the completion of all necessary processes.

Updated: October 16, 2019 04:23 PM

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