The Abu Dhabi National Oil Company (ADNOC) has joined the Adani group for its entry into the chemicals business. In January, Adani had announced a partnership with German major BASF SE for the same.
Along with ADNOC, Borealis AG has also signed a memorandum of understanding (MoU) to conduct a joint feasibility study for setting up a chemical complex at Mundra (Gujarat).
The total investment in the chemical complex is estimated at $4 billion, said a joint press statement on Thursday. “With the inclusion of ADNOC and Borealis as potential partners, the parties are examining various structuring options for the chemical complex that will leverage the technical, financial, and operational strengths of each company,” it said.
Currently, Reliance Industries is a major supplier of petrochemicals, along with government-owned refiners. Adani’s entry into chemicals will open a second front, in which the two groups will be competing. Adani had moved into the natural gas business through LNG and city gas distribution, though it is not into exploration and production.
The Adani partnership will also evaluate co-investment in a wind and solar park, plans for which are at an advanced stage. The power generated from this will be used in the chemical complex. The collaboration includes evaluating a joint world-scale 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, based on proprietary technology Borealis Borstar.
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.
The products will be predominantly for India, across various industries including construction, automotive, and coatings. The complex in Mundra will be powered through renewable energy resources. “If realised, it will be the world’s first CO2-neutral petrochemical site to be fully powered by renewable energy, in line with the partners’ commitment to sustainability and energy efficiency,” said the press release.
According to Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “As a value-adding partner, ADNOC will play a crucial role as the propane feedstock supplier to this project.