The Abu Dhabi National Oil Company (Adnoc), alongside Ahmedabad-headquartered Indian conglomerate Adani Group, German chemical giant BASF, and Austrian polyethylene and polypropylene producer Borealis, have revealed their plans to engage in a joint feasibility study to further evaluate a collaboration for the establishment of a chemical complex in Mundra town of India’s Gujarat, with an investment worth $4bn (AED14.7bn).
According to UAE’s state-held news agency, Wam, the four companies signed a memorandum of understanding (MoU), with the move following a January 2019 announcement by BASF and Adani about investment plans into the project. The firms will examine various structuring options for the chemical complex with an aim to leverage the technical, financial, and operational strengths of each company.
The firms look to finalise the joint feasibility study by the end of Q1 2020, with production being expected to begin in 2024.
The Emirati-Indian-German-Austrian collaboration will evaluate study to establish a joint propane dehydrogenation (PDH) plant to produce propylene based on propane feedstock, which will be supplied by Adnoc. Additionally, propylene will be partially used as feedstock for a polypropylene complex — based on proprietary state-of-the-art Borealis Borstar technology — to be owned by Adnoc and Borealis.
Meanwhile the polypropylene complex will be the first international co-investmengt led by Adnoc and Borealis, as part of their existing joint venture, Borouge. Propylene to be used as raw material for BASF and Adani’s acrylics value chain complex comprising glacial acrylic acid, Oxo-C4 (butanols and 2-ethylhexanol), butyl acrylate, and other downstream products.
According to Adnoc, the products will be manufactured for Indian markets for local businesses in the construction, automotive, and coatings industry.
Adnoc, Adani, BASF, and Borealis will also evaluate a joint investment in a wind and solar park, with the plans being at an advanced stage of development.
Commenting on the collaboration, Minister of State and group chief executive officer of Adnoc, Dr. Sultan bin Ahmad Sultan Al Jaber, said: "As a value-adding partner, Adnoc will play a crucial role as the propane feedstock supplier to this project.
“As the fastest growing global energy market, India is crucial to our international growth ambitions in the downstream sector. As such, this project allows Adnoc and its partners to capture the promising growth in the Indian polyolefins market”, Al Jaber added.
Meanwhile, chairman of Adani Group, Gautam Adani, said: “We stand committed to the ‘Make in India’ initiative and serve the larger purpose of aligning growth opportunities with creation of goodness for the nation."