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Abu Dhabi 17-10-2019
Abu Dhabi National Oil Company (ADNOC), Adani Group, BASF SE and Borealis AG have signed a Memorandum of Understanding (MoU) to conduct feasibility studies to assess cooperation in the construction of a chemical industry complex in Mundra, Gujarat, India.
The memorandum marks the second phase of Adani and BASF’s investment plans announced in January 2019, where ADNOC and Borealis will join as partners. A number of options are under consideration to structure the petrochemical complex, which has an estimated total investment of about $ 4 billion, so as to take advantage of the strengths of all parties in the technical, financial and operational fields.
The partnership, which reflects ADNOC’s ambitions to enhance the value of its global refining and petrochemical business, aims to assess opportunities for collaboration in establishing a world-class propane dehydrogenation complex to produce polypropylene using propane provided by ADNOC as a raw material, where propylene will be partially used. As a raw material in the polypropylene production complex, owned by ADNOC and Borealis, through the application of advanced technology “Borstar”.
The polypropylene complex will be ADNOC and Borealis’ first overseas investment, and is part of their strategic cooperation with the Borouge joint venture. In addition, propylene will be the main raw material used in all operations of an acrylic production complex previously announced in a partnership between ADANI and BASF in which the latter holds a majority stake. Products of the acrylic production complex include: glacial acrylic acid / GAA /, AXO-C4 / butanol, ethyl hexanol-2 /, butyl acrylate / BA /, and other potential refining and petrochemical products.
The port of Mondra in Gujarat was selected as the site for the construction of the complex, which will produce mostly materials for sale in the Indian market, to meet the needs of a wide range of local industries in India including construction, contracting, automotive and paint.
The partners intend to fully rely on renewable energy sources to operate the Mundra petrochemical complex, where they are currently evaluating joint investment opportunities in a solar and wind energy unit, most of which are in an advanced stage of development. If approved, Mundra will be the world’s first fully CO2-free petrochemical site powered by renewable energy, in line with partners’ commitment to sustainability and energy efficiency.
His Excellency Dr. Sultan bin Ahmed Al Jaber, Minister of State and CEO of ADNOC and its group of companies, said: “ In line with the wise leadership guidance to enhance profitability and increase economic return, this collaboration contributes to the progress towards the implementation of ADNOC’s strategy to build and document mutually beneficial partnerships. ADNOC will play an important role in this partnership by supplying propane feedstock in this project, which is of particular importance as India is one of the fastest growing global energy markets and is therefore an important factor in achieving our growth aspirations internationally RARE and Petrochemical. In addition, the project will enable ADNOC and its partners to take advantage of the promising growth opportunities in the Indian polyolefins market.
Gautam Adani, Chairman of Adani Group, said: “We are delighted to be working with our international partners to set up a chemical production complex at Mundra Port. This project is part of our commitment to ‘Made in India’ and serves our broader goal of conciliation. Between investing growth opportunities and seeking to serve the country.
Dr. Martin Brodermuller, CEO of BASF, said: “BASF is committed to driving economic growth in India, and we are delighted to be playing a key role in driving this joint venture, which is also a leading sustainability initiative. We are looking forward to start working with our partners to establish this complex in Mundra to supply the Indian market with high quality petrochemical products.
Alfred Stern, CEO of Borealis, said: “This partnership is a unique opportunity to enhance our presence in the production of polypropylene and to provide new and innovative products using state-of-the-art Borstar technology to bring added value to our customers in various Indian sectors.
The partners aim to complete the joint feasibility study by the end of the first quarter of 2020, with production scheduled to start in 2024.
