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Abu Dhabi, UAEThursday 15 November 2018

Exclusive: Borealis seeks partners for joint venture with Adnoc and investments abroad

The Mubadala-owned petchem company is currently expanding its chemicals capacity through its Borouge venture at Ruwais

Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National 
Borealis' new chief executive Alfred Stern says the company is looking to grow Borouge, its joint venture with Adnoc outside of Abu Dhabi. Reem Mohammed/The National 

Petrochemicals producer Borealis is in talks to add more partners to the expanding Borouge chemicals facility in Abu Dhabi and is eyeing investment opportunities abroad with the Abu Dhabi National Oil Company.

Austrian company Borealis, which is majority-owned by Abu Dhabi strategic firm Mubadala Investment Company, operates the petchems joint venture Borouge with Adnoc in the capital’s western region of Ruwais.

“Borealis is so far the only technology supplier for the polyolefin plants (in Borouge) … and we also want to use [our technology] to build that further and that can also lead to opportunities outside of Abu Dhabi but also in Abu Dhabi to partner up with others [alongside] Adnoc,” Borealis chief executive Alfred Stern told The National in an interview on Monday.

The Borouge facility, which has a production capacity of 4.5 million tonnes of polyethylene and polypropylene, is currently looking to ramp up production by almost three times through the development of new projects. These are Borouge 4 and polypropylene plant-5 that will integrated with the expanding refinery in Ruwais. Polypropylene and polyethylene fall under the larger category of polyolefins, which includes plastics manufactured through a process known as polymerisation.

The strategy to more than triple chemicals output comes in parallel with efforts by Adnoc, which produces 4.5 per cent of global oil, to build the world’s biggest integrated refining and petchems facility at Ruwais.

Adnoc, which expects to invest around $45 billion (Dh165.3bn) downstream with partners over the next five years in Abu Dhabi, also signed its first international partnership with Saudi Aramco in June to develop an integrated refining and chemicals complex in the west coast of India.

Borealis sees an extension of its ongoing partnership with Adnoc in Borouge to possibly include a role in the development of the $55bn Ratnagiri facility in the Indian state of Maharashtra.

“There will be some side products coming out of the refinery that create opportunities for petrochemical production and for sure Adnoc will explore together with us as this is an opportunity we can grow Borouge further outside of Abu Dhabi,” said Mr Stern.

Borealis and Nova Chemicals, also a Mubadala entity,

are jointly investing in the

development of a Total-led chemicals complex on the US Gulf Coast.

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Read more:

Adnoc puts Ruwais at the heart of plans for UAE’s future beyond oil

Adnoc to invest Dh165bn with partners in downstream

Exclusive: Mubadala's petroleum and petrochemicals wing eyes lower cost barrels

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The chemicals company counts the US Gulf coast and the Central Asian oil producer Kazakhstan, where the downstream sector remains fairly nascent, as new markets for expansion, particularly with the wide availability of feed stock in both countries.

“We want to explore if we can make that work together with UCC [United Chemical Company] in Kazakhstan, which will be a very exciting opportunity,” said Mr Stern.

Borealis and the Kazakh chemicals company signed a joint development agreement in March to develop a large-scale polyethylene project, one of the biggest downstream ventures for the country.

Borealis, which is currently undertaking pre-front end engineering and design on developing what could be the world’s largest mixed feed cracker at Ruwais, will look at a mixture of liquids and gases to be used as feedstock in its new units at Borouge 4.

Borealis’ products will see both strong demand in the domestic sector, particularly in synergy with Adnoc’s planned derivatives and conversions park, which is set to develop on the back of the expanded refining facilities in Ruwais.

“That would be a strong driver to grow for Borouge in this region even more than we see today,” said Mr Stern.

He foresees additional growth opportunities for export as well. Asia and the Middle East have the highest growth rates for polyolefins and the markets account for the largest chunk of Borealis’ products, particularly in servicing energy and infrastructure sectors, due to the growing need for cabling and insulation in those

geographies.

“We see China, South East Asia as huge growth regions, but also the Middle East here will continue to grow. This was one of the big things we implemented in Borouge 3, with our Borlink technology in order to bring this wire and cable insulation material we are ramping [that] up rapidly now,” said Mr Stern.

Other big revenue growth segments are parts for the automotive industry, fuelled by the uptake in electric cars and growth in mobility across Asia as well as the Middle East.

Borealis through its joint venture Borouge recently expanded its existing compounding facility in Shanghai to manufacture additives for vehicles.