Abstract
The UAE is making solid progress towards the development of new capacity, but
BMI cautions that the
completion of the second phase of the Borouge
petrochemical complex at Ruwais, Abu Dhabi, could
suffer owing to the
sluggish recovery in demand in Asia at the same time as Chinese capacity is
rising.
Borouge – a joint venture of the Abu Dhabi National Oil
Company and Austria’s Borealis – is targeting
polyolefins
production at 2mn tpa by 2010 at its Ruwais complex. The 1.45mn tpa Borouge 2
cracker is
set to provide much of the feedstock for the increase in
capacity. The expansion would more than double
the company’s overall
capacity to 4.5mn tpa. It will be the largest plastics and petrochemicals
complex in
the Middle East and one of the largest in the world. Presently,
Borouge supplies 35% of its output to the
Middle East, with the rest
exported to Asian markets.
The company is hoping that Asian markets will
absorb the increase in output. However, at the same time
as
Borouge’s cracker is due to come online in 2010, growth in Asian markets
is due to be far less than
before the financial crisis of September 2008.
Trends in UAE petrochemical production will remain
closely tied to its key
export markets, notably Asia’s economic powerhouse, China. BMI believes
that
Chinese demand for petrochemicals will have improved in H209
following some difficult months which
have seen a sharp slowdown in
construction activity. This will be supported by the government' s
economic
stimulus programme, although this could also work against UAE petrochemicals
production in
the long-run as the programme targets the development of
domestic petrochemicals capacities and could
potentially help the country
to challenge the Middle East in this area. Although H209 will be an
improvement on the poor performance seen in H208, levels of demand growth are
not forecast to return to
2007 levels until 2010 at the earliest.
Nevertheless, Borouge anticipates that polyolefin demand in the
Middle
East and Asia should absorb the capacity expansions.
Solid progress is
being made on the expansion of Borouge’s petrochemicals complex at
Ruwais with the
signing of engineering contracts for the ethylene and
polyolefin plants that are to form part of Borouge 3,
which is scheduled
to come online in 2013. In July 2009, Borouge awarded three main contracts
worth
about US$22mn to Tecnimont for the FEED stage of the Borouge 3 plant
expansion. The contract
includes the FEED of the polyolefin units and the
utilities and offsite facilities with responsibility for a
350,000tpa LDPE
plant supplying the cable and wire industry and utilising
LyondellBasell’s technology.
Borouge 3 downstream units will also
include two Borstar PE facilities, each with capacity of 540,000tpa,
and
two Borstar PP plants, each with capacity of 450,000tpa. Borouge 3 is due to
be completed in Q413.
According to Borealis, Borouge 3 will capture
additional feedstock availability resulting from the
upstream refinery and
gas processing expansions of Adnoc. Meanwhile, Bechtel was appointed the
project management contractor and the Linde Group was contracted to build
Borouge 3’s 1.5mn tpa
ethylene plant, valued at US$1.08bn. The
Borouge 3 PP plants will consume propylene feedstock
supplied from oil
refineries operated by Abu Dhabi Oil Refining Company (Takreer). Takreer
is
doubling capacity of its largest refinery and in 2008 awarded Bechtel a
FEED contract for the expansion.
The refinery will have capacity to
process an additional 400,000b/d, following the expansion.
Another major
upcoming development is the proposed 7mn tpa 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.
Chemaweyaat is to invite
bids on an ethane facility in September 2009, with award set for Q210.
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