Abu Dhabi is to invest more than $20bn to develop its petrochemicals industry at Taweelah under a newly formed company that is likely to be led by Harri Bucht, a former chief executive officer of Abu Dhabi Polymers Company (Borouge).

The company, Chemaweyaat (Arabic for chemicals), has been created to manage the plans. It will form a critical part of recently announced plans for a chemicals city in the emirate (MEED 11:4:08).

Until now, it was not clear whether the city would be at Ruwais or Taweelah, but sources close to the project say it will now go ahead at Taweelah, alongside the Sheikh Khalifa port and an aluminium smelter

The city project is a key element of Abu Dhabi’s plans to diversify its economy, with hopes that an industrial cluster will develop around Taweelah.

Although the budget for the first phase of the development is understood to be more than $11bn, sources close to the project say this is likely to rise to as much as $20bn because of rapidly rising engineering, procurement and construction (EPC) costs. The plans include developing the world’s largest single-phase petrochemical complex, which will include a urea fertiliser plant, and aromatics and advanced polymers facilities.

The first phase of the project has a planned output of more than 8 million tonnes a year (t/y). This will make it far larger than the 5 million t/y Saudi Kayan Petrochemical Complex in Jubail.

The scheme’s centerpiece will be a 1.45 million-t/y naphtha cracker, the largest in the region. It will produce 750,000 t/y of ethylene oxide, 550,000 t/y of linear low-density polyethylene (LLDPE), 450,000 t/y of polypropylene (PP), and 350,000 t/y of low-density polyethylene (LDPE).

It will also have a 1.35 million-t/y aromatics plant producing benzene and paraxlyene. Other units will produce advanced chemicals such as cumene, phenols and polycarbonates.

The project will also feature an ammonia plant to provide feedstock for a 510,000-t/y urea unit, and a melamine facility.

Naphtha feedstock is likely to be sourced from the 400,000-barrel-a-day refinery at Ruwais and will have to be transported more than 300 kilometres to Taweelah.

“It would make more sense to locate the complex at the source of the feedstock,” says a source close to the project. “But Abu Dhabi wants to develop Taweelah as a major industrial hub, so it is prepared to pay the extra costs.”

The most expensive component is likely to be the aromatics facility, costing more than $2.5bn.

Chemaweyaat is a joint venture of Vienna-based Borealis, the local International Petroleum Investment Company (Ipic) and Abu Dhabi Investment Council (Adic), the latter of which is leading the development.

Borealis will license its technology for the phenol, PP, LLDPE and melamine plants. Europe’s Basell and Japan’s Asahi Kasei are expected to supply their technology for the LDPE and polycarbonate plants respectively. Other technology supply contracts have yet to be agreed.

Australia’s WorleyParsons has been appointed project management consultant for the pre-front-end engineering and design (FEED), FEED and EPC stages.

The first EPC tenders are expected to be issued in mid-2009. The first phase of the complex is due to come on stream in 2013.

Abu Dhabi’s petrochemicals sector is now controlled by Adic, following a government decision in late 2007.