The UAE continues to make progress towards becoming a major petrochemicals producer, although therestrictive financial market and rising construction costs could delay the opening of the planned plants atthe world-scale Borouge 2 and 3 complexes, according to BMI’s latest UAE Petrochemicals Report.Borouge, a joint venture (JV) of the Abu Dhabi National Oil Company (Adnoc) and Austria’sBorealis, is targeting production at 2mn tonnes per annum (tpa) by 2010 at its Ruwais complex. The1.45mn tpa Borouge 2 cracker, due onstream in 2010, is set to provide much of the feedstock for theincrease in capacity. According to plans announced in April 2008, Borouge is planning Borouge 3, whichwould entail an additional 2.5mn tpa of polyolefins capacity coming online by end-2014. This wouldmore than double the company’s overall capacity to 4.5mn tpa. However, expenditure on the Borouge 2project has increased nearly twofold of initial estimates to US$4.5bn, including the US$1.8bn Borstartechnology-based polyolefins units, and US$1.3bn ethylene and metathesis plants. Two of the new unitswill make PP, each with 400,000tpa capacity and one unit will have a 540,000tpa polyethylene capacity.
The expanded complex will be the largest plastics and petrochemicals complex in the Middle East andone of the largest in the world. Presently, Borouge supplies 35% of its output to the Middle East with therest exported to Asian markets. The company is hoping that Asian markets will absorb the increase inoutput. Borouge is anticipated to grow twice its current size by 2020, with further development afterBorouge 2. Between 2010-2020, it aims to boost capacity potentially by 2mn tpa through 2020. However,Borouge has abandoned its plans to expand its portfolio by including basic petrochemicals. Adnoc andBorealis had been looking at a plan to build a propane dehydrogenation facility and a major cumenephenolcomplex.
Another major upcoming development is the proposed 7mn tpa Chemaweyaat Complex 1, which includesa 1.5mn tpa naphtha cracker, and aromatics, phenol and derivatives plants at Taweelah to be completed in2013-2014. It is envisaged the complex will be the world’s largest grassroots integrated chemical project,although by end-2008 no further details were available on the complex’s capacities. BMI believes it isunlikely that the cracker and related units will be completed before 2014. The other project is Borouge’spreviously announced third manufacturing complex, Borouge 3, at Ruwais. This is likely to be smallerthan Borouge 2 due to feedstock constraints, with capacity for 2.5mn tpa of polyolefins, including two orthree PP units and an LDPE plant. Completion is scheduled for 2014.
In BMI’s Middle Eastern Petrochemicals Business Environment Rankings matrix, the UAE has a score of59.7 points, 0.8 points behind Kuwait and 2.8 points ahead of Iran. While the UAE’s score remainsunchanged this quarter, it has fallen from third to fourth place in the regional rankings due to Kuwait’srise in position. It is unlikely to raise its ranking further with Saudi Arabia and Qatar continuing to leadthe Middle East rankings over the next five years, even with the additional capacity provided by thesecond phase of the Borouge complex in 2010. BMI believes the score will increase as the third phase ofthe Bourage complex and the proposed Chemaweyaat 1 project draw nearer.
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