Borouge’s $6.2bn petrochemicals project set to be completed at end of next year
Borouge’s $6.2 billion Borouge 4 project in Ruwais remains “on track” for completion by the end of next year, its chief executive has said.
The plant will increase the Abu Dhabi petrochemicals maker’s polyolefin production by about 30 per cent to 6.4 million tonnes. It will also make the company’s production operation at Al Ruwais Industrial City the world’s largest single-site polyolefin complex.
“We’re looking forward to complete this project by the end of 2025. The current progress of completion of the project is more than 50 per cent,” Hazeem Al Suwaidi told The National. “[It] will have a significant and a big impact on our financial performance in Borouge. We’re looking forward to slowly and gradually revamping the production in 2026.”
Plastics are a major growth area for petrochemicals companies, and polyolefins account for about two thirds of global demand.
Highly versatile, polyolefins have a broad spectrum of enduse applications – from hard plastics such as sheets and pipes to softer products such as films, bags and bubble wrap. However, demand for most petrochemicals was lower than expected last year as geopolitical tension and high interest rates weighed on consumption.
While Borouge’s fourth-quarter net profit rose by about 17 per cent annually, driven by lower costs and expenses, the company reported a 6 per cent drop in quarterly revenue on “weaker global demand”.
Asia, home to several large emerging economies, is the centre of consumption and production, with China the driving force in polythene and polypropylene manufacturing.
Borouge has three offices in the country located in Beijing, Shanghai and Guangzhou.
“China has been always an important and an excellent market for us. However, there has been also different challenges with the market overall, not only China,” Mr Al Suwaidi said.
Borouge has been focused on producing specialised products for the Chinese market, and these products have resulted in the “highest returns for the company”, he said.
Manufacturing activity in the world’s second-largest economy has slowed over the past few quarters amid weak consumer spending and as a post-coronavirus economic rebound has fizzled out.
“In 2024, [global] markets will remain difficult and challenging ... we will go in cautiously ... but we have all what it takes to deliver a great performance for the company,” Mr Al Suwaidi said.
Established in 1998, Borouge, a joint venture between Abu Dhabi state energy company Adnoc and Austrian chemicals producer Borealis, has a workforce of more than 3,100 and customers in more than 86 countries across Asia, the Middle East and Africa.
In May 2022, Borouge raised $2 billion through an initial public offering and was listed on the Abu Dhabi Securities Exchange. The IPO, which was about 42 times oversubscribed, was the largest in Abu Dhabi at the time. After its listing,
A crucial area of focus for Borouge’s new complex will be sustainability, chief executive Hazeem Al Suwaidi said
Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to guide asset-allocation decisions and support portfolio construction.
A key area of focus for Borouge’s new complex will be sustainability, Mr Al Suwaidi said.
Borouge 4 project director Sultan Al Shehhi told The National that the plant’s ethane cracker is set to be one of the world’s most efficient. An ethane cracker takes the component of natural gas and converts it into ethylene by heating the ethane to such a high temperature that it breaks the molecular bonds holding it together.
Borouge plans to have “flareless” operations at the plant to lower emissions and may install a carbon capture centre in the future, which will capture “almost all” the carbon produced from the cracker, Mr Al Shehhi said.
“Sustainability was ... one of the major elements that we tried to design our plant around,” he said.
Adnoc plans to double its carbon capture and storage capacity goal to 10 million tonnes a year by the end of the decade, equal to removing more than two million petrol-powered cars from the roads.