Borealis and ADNOC Partner Over a USD 6.2 Billion Expansion Plan of Borouge Polyolefin Facility

  • 18-Nov-2021
  • Journalist: Jaideep

Austrian polyolefin and base chemical company, Borealis, and UAE’s state-owned oil major, Abu Dhabi National Oil Co., together have finalized terms of investment worth USD 6.2 billion to expand their joint venture company, Borouge, dedicated to delivering innovative plastic solutions. The newly added Borouge units will be focussed on meeting firm ethylene and other olefin demands from customers in the Middle East, Asia, and Africa regions.

The agreement, signed between the two parties, dealt with the construction of the fourth polyolefin producing Borouge facility at the polyolefin complex housed in Ruwais, UAE. The new facility has been planned to boast an ethane cracker with the capacity to produce 1.5 million tons ethylene annually, two Borstar polyethylene plants of 700 thousand tons per year capacity each, a 100 thousand per year capacity cross-linked polyethylene unit and a hexane-1 unit to facilitate the production of co-monomers for select polyethylene grades.

Ethylene is a vital petrochemical building block that is obtained from the thermal cracking of oil and natural gas feedstocks. It is a starting material for the production of a chain of industrially important petrochemicals like polyethylene and polyethylene terephthalate which are predominantly used in the packaging industry, ethylene glycol (used as antifreeze in automobiles), polyvinyl chloride (used in plumbing applications), polystyrene (applied in the textile and rubber-producing industries).

As per ChemAnalyst, the ethylene market valued USD 105.85 billion in 2020 and the market projects a healthy rise with a CAGR of over 6% in the coming 5 years with the packaging industry being the leading consumer sector. The commissioning of additional ethylene and polyethylene facilities in the UAE is expected to cater to the fast-growing ethylene demand in the domestic region and countries across the border. The new facility, which will be causing the combined annual Borouge polyolefin production to reach 6.4 million tonnes, making it’s the world’s largest single-site polyolefin producing facility, will benefit in enhancing UAE’s competitiveness in the global market. Borouge will soon be accountable for a large portion of the ethylene supplies to the international market and its production rates will be capable of shaking the ethylene prices at the global level.

Related Deals