Abu Dhabi studying major new refinery project

09 February 2017

State oil producer hires engineering firm to look at potential of new capacity at two UAE sites

State-owned Abu Dhabi National Oil Company (Adnoc) is carrying out studies on a major new refinery project to increase the UAE’s capacity to produce gasoline and other oil products.

According to industry sources, Adnoc’s downstream subsidiary Abu Dhabi Oil Refining Company (Takreer) has hired US engineering group Bechtel to carry out a feasibility study on a new project.

Takreer is considering as part of the study whether to add new capacity in Ruwais – Takreer’s refining hub in the west of Abu Dhabi emirate – or in Fujairah on the UAE’s east coast.

MEED reported earlier this week that an existing project to build a 200,000 barrel-a-day refinery in Fujairah has been shelved by its owner, Abu Dhabi-based International Petroleum Investment Company’s (Ipic). The project had long been delayed since engineering, procurement and construction (EPC) bids submitted bids in early 2015.

Regardless of the Ipic project, Adnoc aims to significantly expand its downstream oil and petrochemicals capacity as part of its ‘2030 strategy’.

“A big part of our growth strategy is downstream,” a spokesperson from Abu Dhabi National Oil Company (Adnoc) told MEED.

“We are in discussions with a number of potential partners and contractors about our downstream strategy and expanding our refining capacity,” he added.

Adnoc did not comment on the feasibility study for a new refining project. Bechtel was unavailable for comment.

Adnoc said in November 2016 that gasoline production will be increased to 10.2 million tonnes a year (t/y) by 2022 to maintain local self-sufficiency. The firm also aims increase petrochemicals production capacity to 11.4 million tonnes a year (t/y) in 2025 from the current 4.5 million t/y.

In addition to the new refining project, which is likely to be a multi-billion dollar scheme, Takreer already has two large refining and petrochemicals projects at a more advanced stage.

In December 2016, Takreer received revised EPC bids on a project to upgrade Abu Dhabi’s Ruwais refining operations to handle additional offshore crude. Before companies were asked to resubmit prices the project was estimated to be valued at about $3bn.

The same month, Takreer awarded design and management contracts on the new Gasoline and Aromatic Project (GAP), aslo at the Ruwais site. GAP is planned to add 4.2 million tonnes a year (t/y) of gasoline capacity and 1.6 million t/y of aromatics capacity.

The UAE, which is one of the world’s largest exporters of crude, sees refining and petrochemicals production as a strategy to add value to its oil and gas sector.

“Adnoc’s ultimate goal is unlocking the full potential of our assets. So we are pursuing profitable and integrated growth in refining and petrochemicals,” Abdulaziz Abdulla Alhajri, Adnoc’s refining and petrochemicals director, said in November.

“We are also diversifying our product portfolio to make us more resilient to economic cycles and oil price fluctuations,” he added.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications