Abu Dhabi plans chemicals city in bid for global stage

11 April 2008
Multi-billion-dollar development set to boost emirate’s downstream industry.

Abu Dhabi is planning an ambitious overhaul of its petrochemicals sector as it seeks to become a major global player in the industry and attract more investment in its downstream manufacturing sector.

Industry sources tell MEED the state-owned International Petroleum Investment Company (Ipic) and Vienna-based chemical company Borealis are planning to build Chemicals Industrial City in the emirate to produce a range of downstream products.

The multi-billion-dollar development, which the project sponsors say will be the largest of its type in the world, will host the federation’s first ever naphtha cracker, as well as downstream propylene and ethylene derivatives plants; a world-scale reformer, and xylene, benzene, cumene, phenol and derivatives units.

Naphtha feedstock for the cracker is expected to be sourced from the existing 400,000-barrel-a-day refinery at Ruwais.

As a result, the petrochemicals complex is likely to be located in Ruwais to keep feedstock transportation costs down, although a site at Taweelah is also being considered by developers.

“It all depends ultimately on logistics,” says a source close to the project. “There is no reason why feedstock cannot be transported from Ruwais to Taweelah. The pros and cons will have to be discussed before a decision is made.”

The new city is one of several developments moving forward in the emirate. Abu Dhabi Polymers Company (Borouge), a joint venture of Borealis and Abu Dhabi National Oil Company (Adnoc), has launched a feasibility study into a third-phase expansion of its olefins complex at Ruwais.

The feasibility study will look at increasing the polyolefins capacity at the complex by 2.5 million tonnes a year (t/y), by developing new polypropylene and polyethylene facilities.

It is unclear if a cracker will need to be built to provide the propylene and ethylene feedstock.

The feasibility of a cracker is believed to be part of the study, although sources in Abu Dhabi say it may be possible for Borouge to buy feedstock from refineries operated by Abu Dhabi Oil Refining Company (Takreer).

In another move, Borouge has notified companies bidding for work on its planned melamine project in Ruwais that it has put the scheme on hold indefinitely.

No official reason has been given for the postponement. However, sources close to Borouge say the company was struggling to find enough personnel to run the scheme, and it baulked at the estimated project costs prepared by the project consultant, Australia’s WorleyParsons (MEED 21:9:07).

It remains unclear at this stage if another state-linked body will take responsibility for the melamine scheme. Sources suggest the $200-300m project may be absor-bed into the Chemicals Industrial City development.

Under the original plan, Ruwais Fertiliser Industries (Fertil) was due to supply urea feedstock for the melamine facility following the completion of a debottlenecking process, being carried out by Pakistan’s Descon Engineering. The postponement of the melamine scheme will not affect Fertil’s plans, however, as it already has enough capacity to process the additional quantities of urea.

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