UAE's ADNOC to invest in local chemicals projects amid $45 billion downstream push

Dubai — Abu Dhabi National Oil Co, the UAE's biggest energy producer, and Abu Dhabi conglomerate ADQ will set up an investment platform to fund local chemicals projects amid a push to invest $45 billion in downstream activities.

The joint venture will oversee the development of projects in the planned Ruwais Derivatives Park, which is part of the Ruwais industrial hub in the emirate of Abu Dhabi, ADNOC said in a statement on July 22. The venture will allow ADNOC to further its aims to boost operations in petrochemicals and other downstream lines. It didn't disclose funds being made available.

Under the terms of the agreement, ADNOC will hold a 60% stake and the remainder will be held by ADQ, with both companies jointly evaluating and investing in chemical projects. Both companies will reveal the results of a study before the end of this year, with details on opportunities available for investors and partners. ADQ holds stakes in Abu Dhabi companies operating in various fields including transportation, power, real estate, media, healthcare, agriculture and financial services.

"Our partnership with ADQ will expand on existing efforts to maximize the value of our assets in Ruwais, to kick start the development of the UAE's downstream derivatives sector, support the transformation of Ruwais into a global hub for industry and attract additional foreign direct investment," Sultan al-Jaber, ADNOC CEO and UAE minister of industry and advanced technology, said in the statement.

Downstream strategy

ADNOC revealed in 2018 plans to invest $45 billion with partners to develop its local downstream activities, including the expansion of its Ruwais refinery and petrochemical capacity in the industrial hub.

The company has courted international investors to expand its oil and gas production and monetize its assets, including the June deal worth more than $10 billion with a group of investors to sell a 49% stake in its gas pipelines a year after striking a similar transaction for its oil pipelines.

A consortium grouping Global Infrastructure Partners, Brookfield Asset Management, Singapore 's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, South Korea 's NH Investment & Securities and Italy's Snam will invest in select ADNOC gas pipeline assets valued at $20.7 billion.

ADNOC last year clinched a $5 billion deal with a consortium that includes GIC, BlackRock Inc., KKR & Co and Abu Dhabi Retirement Pensions and Benefits Fund to sell them select pipeline infrastructure and collectively hold a 49% stake in ADNOC Oil Pipelines, a subsidiary of the parent company.