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ADNOC, Adani, BASF and Borealis to evaluate chemical complex in India

Abu Dhabi National Oil Company (ADNOC), Adani Group, BASF and Borealis have signed a Memorandum of Understanding (MoU) to carry out a joint feasibility study in the evaluation of establishing a chemical production complex in Mundra, Gujarat, India.

This collaboration builds on investment plans announced by BASF and Adani in January 2019; with the inclusion of ADNOC and Borealis as potential partners, the companies are now considering various structuring options for the chemical complex, leveraging the strengths of each party.

Under the MoU, the partners will evaluate a joint propane dehydrogenation (PDH) plant to produce propylene based on propane feedstock to be supplied by ADNOC. Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis.

The PP complex will be the first overseas production joint investment by ADNOC and Borealis as part of a strategic framework with their current joint venture Borouge. Propylene will be used as the key raw material for the previously announced acrylics value chain complex comprising glacial acrylic acid (GAA), Oxo-C4 (butanols and 2-ethylhexanol), butyl acrylate (BA) and potentially other downstream products, under a joint venture between BASF and Adani.

The chemical complex in Mundra will be entirely supplied from renewable energy resources, with the four companies currently evaluating co-investment in a wind and solar park. If achieved, this would be the world’s first CO2-neutral petrochemical site to be fully powered by renewable energy.

Downstream sector ambitions

“This exciting collaboration is in line with ADNOC’s strategy to foster mutually beneficial partnerships,” commented Dr. Sultan Al Jaber, UAE Minister of State and CEO of ADNOC. “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.”

“BASF remains committed to investing in India’s growth,” continued Dr. Martin Brudermueller, chairman of the board of BASF. “We will play a key role in driving this joint collaboration which is also pioneering in terms of sustainability.  We look forward to working together with our partners in establishing a chemical cluster in Mundra and to supplying the Indian market with high-quality downstream products.”

Alfred Stern, CEO of Borealis, added: “This partnership is a unique opportunity to strengthen our PP presence in India with proprietary Borealis Borstar PP technology and to create value and tangible benefits through innovation for customers across multiple industries.”

The joint feasibility study is expected to be finalised by the end of the first quarter of 2020, with production slated to commence in 2024. Total investment is estimated to be up to $4 billion (€3.6 billion).