UAE makes downstream sector growth a top priority

07 November 2018
Abu Dhabi plans to transform Ruwais into a downstream hub

Abu Dhabi National Oil Company (Adnoc) wants to turn Ruwais, a small industrial town in the  western region of the UAE located on the Gulf coast, into a refining, petrochemicals and conversion hub, and is willing to spend about $45bn to make the downstream silicon oasis happen.

Before it embarks on this megaproject, potentially with the help of some big name international partners, Adnoc has a number of other schemes planned for Ruwais.

In early June, Adnoc released a long-awaited tender for a major new project to boost gasoline and aromatics production from the Ruwais refinery. The project will expand existing gasoline production units at Ruwais, boosting gasoline production to 9.4 million tonnes a year (t/y) by 2022, up from 5.2 million t/y currently.

This is together with the construction of a new complex to produce 1.56 million t/y of paraxylene and benzene. Technical bids have been submitted, and construction is expected to be completed around 2024.

Downstream expansion

The project is the latest in Adnoc’s ambitious plan to expand the downstream sector in the UAE. The 840,000 barrel-a-day (b/d) Ruwais refinery was expanded in early 2015, after a massive project to double its capacity. It was hit by a major fire in January 2017, which resulted in its RFCC unit being shut down. Major repairs are under way and the work is almost complete.

Adnoc awarded a $3.1bn contract to Samsung Engineering earlier this year for a major upgrade of the existing Ruwais refinery-west, which will allow it to process offshore crude, freeing up as much as 420,000 b/d of its flagship Murban crude for export.

Until now, Ruwais has exclusively processed onshore Murban crude. With a density of 39.6 API degrees, compared to 34 degrees for the heavier Upper Zakum grade, Murban commands a higher price on global oil markets.

One of the side effects of the expansion to include units to process offshore crudes is that, by 2022, Abu Dhabi could actually begin importing crude oil for the first time in the emirate’s history. It had originally planned for the revamped refinery to process up to 420,000 b/d of Upper Zakum crude, but will consider importing similar crude grades if the price is right.

Refining capacity

Adnoc’s longer-term plans include boosting its total refining capacity from 922,000 b/d currently — with 650,000 b/d of crude and the rest condensates — to ensure fuel self-sufficiency, as well as growing its petrochemicals portfolio. It plans to build a new 600,000 b/d refinery next to the giant Ruwais complex, taking the total to more than 1.2 million b/d.


This article is extracted from a report produced by MEED and Mashreq titled The Future of Middle East Energy. Click here to download the report

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