UAE's ADNOC, Borealis mull selling minority stake in petrochemical JV in IPO

Abu Dhabi National Oil Co. and Austria's Borealis are considering selling a minority stake in their joint venture Borouge in an initial public offering as the UAE's biggest energy company seeks to monetize assets amid capital-intensive plans to boost oil and gas output.

"Abu Dhabi National Oil Company and Borealis AG are considering a potential initial public offering of a minority stake in their joint venture business Borouge," ADNOC said in a statement Feb. 15. "ADNOC and Borealis will provide further material updates as and when appropriate."

ADNOC and Borealis, which is 75%-owned by OMV, have begun construction of a $6.2 billion expansion of the Borouge petrochemical plant, the biggest in the UAE, in the industrial city of Ruwais to produce 1.4 million mt/year of polyethylene.

Expected to become operational in 2025, the Borouge 4 project includes construction of a 1.5 million mt ethane cracker and two polyethylene plants. It will make the site, which already has three units, the world's largest single-site polyolefin complex at 6.4 million mt/year, the companies said in November.

Borouge 4 products will be mainly sold in Asia, the Middle East and some parts of Africa.

ADNOC will supply feedstock for the Borouge 4 unit.

Fourth IPO

The potential IPO of Borouge would be ADNOC's fourth stake sale of a unit.

UAE fertilizer company Fertiglobe, in which ADNOC and Netherlands-listed chemicals company OCI have stakes, was listed on the Abu Dhabi Securities Exchange Oct. 27 after raising more than $795 million in an IPO.

ADNOC sold an 11% stake in ADNOC Drilling in an IPO that raised $1.1 billion, with the unit starting to trade on the Abu Dhabi Securities Exchange Oct. 3.

ADNOC sold a 10% stake in fuel retailer ADNOC Distribution in 2017, raising $851 million.

Since 2019, ADNOC has been monetizing its oil and gas assets as it seeks to unlock cash to fund strategic projects, which include increasing oil output capacity to 5 million b/d by 2030 from around the current 4 million b/d.

ADNOC is forging ahead with an expansion of its hydrocarbons and low-carbon businesses under a plan to spend Dirhams 466 billion ($127 billion) over 2022-2026.

The last five-year capex plan was for Dirhams 448 billion ($122 billion).