ADNOC, Borealis boost polymer capacity at UAE petrochemical JV by 11%

Abu Dhabi National Oil Co. and Austria's Borealis have started up a new polypropylene unit that will boost total polymer capacity of polyolefins by 11% at their petrochemical joint venture in the UAE ahead of a 2024 launch of a $6.2 billion expansion.

Joint venture Borouge has commenced operations at its fifth polypropylene unit that will boost the production capacity of the commodity by 25% or 480,000 mt to 2.24 million mt/year and its total polymer capacity of polyolefins by 11% to 5 million mt/year, Borouge said in a Feb. 24 statement. The commissioning of the unit started at the end of 2021.

"Our PP5 unit, will enable us to meet our customers' increasing demand for polypropylene solutions, especially in the packaging and infrastructure sectors across our key markets in the Middle East, Asia Pacific and Africa," Borouge CEO Hazeem al-Suwaidi said in the statement.

ADNOC and Borealis, which is 75% owned by OMV, began this year construction of the expansion of the Borouge petrochemical plant 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 the world's largest single-site polyolefin complex at 6.4 million mt/year, the companies said.

ADNOC will supply feedstock for the Borouge 4 unit.

Global polypropylene increments

Borouge is boosting its production capacity at a time when global increments are planned in 2022.

"Global polypropylene demand for 2022 is expected to expand at a healthy rate of 4.6%, adding 3.5 million mt of incremental demand year on year, as the ongoing pandemic continues to boost PP consumption – from electronic goods and automobile to PPE used by households and the healthcare industry alike," S&P Global Platts Analytics said in a Jan. 24 report.

"Capacity expansion over the same period is however projected to significantly outpace demand – adding a projected 8.7 million mt/year of PP in 2022, a 9.6% increase year on year."

ADNOC and Borealis are considering selling a minority stake in 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.

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