Abstract
An ambitious programme of expansion at Abu Dhabi' s Borouge complex is on
course, with its backers
pressing ahead with a third phase in the massive
petrochemicals project even before the second phase is
due for completion
in 2010. This indicates that the development of the country' s petrochemicals
industry
is robust in the face of a severe decline in global demand and
remains attractive to investment due cheap
and abundant feedstock
resources, according to BMI' s latest UAE Petrochemicals Report.
The
Borouge 2 project is on schedule with operation due to begin in 2010. Borouge
2, located next to
Borouge' s existing petrochemical complex in Ruwais,
will raise production capacity from the current
600,000tpa to 2mn tpa of
polyolefins. It will include one 540,000tpa Borstar technology-enhanced PE
unit and two 400,000tpa Borstar PP units. A proposed Borouge 3 was announced
in April 2008. In the
same month of 2009, Borouge announced plans to
commission a front-end engineering and design study
for the Borouge 3
project to boost total production capacity to 4.5mn tpa by Q413. It will
comprise an
ethane cracker and PP and PE units. According to Borealis,
Borouge 3 will capture additional feedstock
availability resulting from
the upstream refinery and gas processing expansions of the Abu Dhabi
National Oil Company (Adnoc). The PP plants are expected to consume propylene
supplied by local
refineries. The LDPE unit, Borouge' s first, will supply
the wire and cable infrastructure market. However,
exact capacities,
including the cracker, have not been disclosed, although BMI believes it will
be as large
as the Borouge 2 cracker, which has a production capacity of
1.5mn tpa. Combined polyolefins capacity
will be 2.5mn tpa, of which BMI
believes up to 1mn tpa will be PP. BMI has projected start-up for
commercial production in Q114.
Another major upcoming development is the
proposed 7mn tpa Abu Dhabi Chemicals Company
(Chemaweyaat) Complex 1,
which includes a 1.5mn tpa naphtha cracker, and aromatics, phenol and
derivatives plants at Taweelah, to be completed in 2013-2014. It is envisaged
the complex will be the
world' s largest grassroots integrated chemical
project, although by end-2008 no further details were
available on the
complex' s capacities. BMI believes it is unlikely that the cracker and related
units will be
completed before 2014. Ownership will be split between the
International Petroleum Investment
Company (IPIC) (40%), Abu Dhabi
Investment Council (40%) with the remainder held by Adnoc.
In BMI' s Middle
Eastern Petrochemicals Business Environment Rankings matrix, the UAE has a
score of
58.4 points, 5.8 points behind Qatar and 2.1 points ahead of
Kuwait. The UAE' s score has fallen 1.3
points this quarter due to
deterioration in its country risk ratings. However, it has risen from fourth
to
third place as a result of a larger decline in Kuwait' s score. The two
states have jostled for third place in
recent months, but Kuwait has
suffered as a result of policy reversals in the refining and
petrochemicals
sectors which has adversely affected its market risk score,
while its overall country risk rating as fallen, in
line with global
economic trends. BMI believes that it is unlikely the UAE will raise its
ranking further
with Saudi Arabia and Qatar continuing to lead the Middle
East rankings over the next five years, even
with the additional capacity
provided by the second phase of the Borouge complex in 2010 However, it is
likely to hold on to its third place, with the expansion of the Borouge
complex and the proposed
Chemaweyaat 1 bolster its petrochemicals
capacities.
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