RIL, Adnoc to co-develop ethylene dichloride facility in Abu Dhabi

The JV will give Adnoc an indirect access to India's growing petrochemical demand, and RIL raw materials for its PVC business in the country

Mukesh Ambani-led Reliance Industries Ltd (RIL) on Tuesday entered into an agreement with Abu Dhabi National Oil Company (Adnoc) to explore development of an ethylene dichloride (EDC) facility in Abu Dhabi.

RIL said in a statement that it had signed a framework agreement with Adnoc to evaluate setting up of this facility next to Adnoc’s Ruwais unit.

“Under the terms of the agreement, Adnoc and RIL will evaluate the potential creation of a facility that manufactures EDC adjacent to Adnoc’s integrated refining and petrochemical site in Ruwais, Abu Dhabi,” the company said.

The joint venture will give Adnoc an indirect access to India’s growing demand for petrochemicals. For its part, RIL will secure raw materials for its Polyvinyl chloride (PVC) business in India.

Under the proposed JV, Adnoc will supply ethylene and access to its world-class infrastructure at Ruwais. And RIL will offer its operational expertise and “entry to the large and growing Indian vinyls market, in which it is a key participant”, RIL said in its statement.

EDC produced from the planned facility will be used to ramp up RIL’s PVC production in India. EDC is a raw material for manufacturing PVC, a polymer used in the housing and agriculture sectors of which RIL is a major producer in the country.

“This is a significant step towards Reliance’s commitment to pursuing backward integration and will pave the way for enhancing PVC capacity in India to cater to the fast-growing domestic market,” said Nikhil Meswani, executive director, RIL.

Abdulaziz Alhajri, executive Director of Adnoc’s downstream directorate, added: “We look forward to working closely with RIL to identify opportunities to capitalise on the strengths of the Ruwais ecosystem, while delivering a compelling new commercial platform for satisfying the large Indian PVC market, as well as demand for other fast-growing segments in the region.”

The statement added that the agreement further demonstrated Adnoc's ambition of expanding its downstream portfolio and international market access as part of its 2030 growth strategy.

This is RIL’s third major tie-up with a global energy company so far in this year. In August, RIL had announced a JV for its fuel retail business with BP and divestment of a partial stake in its oil-to-chemicals business to Saudi Aramco.