DMEA: Petchems come to the fore for ADNOC

Abu Dhabi’s state oil firm made headlines this week as it closed a petrochemicals deal with India’s Reliance while moving closer to an IPO for its plastics venture.

ADNOC’s Abu Dhabi Chemicals Derivatives Co. (TA’ZIZ) JV this week formalised a shareholder agreement with Reliance Industries Ltd (RIL) for the TA’ZIZ EDC & PVC project to be located in Ruwais.

The agreement follows agreements between the parties in June and December last year to develop a $2bn plant at the TA’ZIZ Industrial Chemicals Zone to produce chlor-alkali, ethylene dichloride (EDC) and polyvinyl chloride (PVC) to capitalise “on growing demand for these critical industrial raw materials and leverage the strengths of ADNOC and Reliance as global industrial and energy leaders.”

The new JV will build and operate the chemicals facility, which will have a capacity of 940,000 tonnes per year of chlor-alkali, 1.1mn tpy of EDC and 360,000 tpy of PVC.

Meanwhile, reports emerged that ADNOC and Borealis intend to achieve a valuation of $20bn for their Borouge plastics JV in the hope of receiving $2bn for a 10% stake when they launch an initial public offering (IPO) later this year.

News of the planned share sale came in February, with reports suggesting soon afterwards that banks had been hired to handle the IPO.

In December, ADNOC and Borealis awarded five engineering, procurement and construction (EPC) package contracts for the development of the Borouge 4 polyolefin (PO) plant following their commitment a month earlier to invest $6.2bn in the unit by 2025.

The first package, which covers early EPC work including site preparation, was awarded to local firm Al Asab General Transport and Contracting. Package 2 covering the facility’s 1.5mn tpy ethane cracker was awarded to a consortium of France’s Technip Energies with the local Target Engineering. The deal is understood to be valued at $500mn-$1bn.