UAE Plans to Double Refining Capacity and Triple Petrochemicals

UAE state oil giant Abu Dhabi National Oil Company plans to invest $45 bln over the next 5 years in downstream expansion. ADNOC plan to double its refining capacity and triple petrochemicals output potential by 2025.

UAE state oil giant Abu Dhabi National Oil Company plans to invest $45 bln over the next 5 years in downstream expansion. ADNOC plan to double its refining capacity and triple petrochemicals output potential by 2025.

UAE Ruwais Refinery

Image: Ruwais Refinery The Centerpiece of tthe ADNOC Expansion

Abu Dhabi National Oil Company announced an ambitious downstream expansion strategy over the weekend. ADNOC layed out plans to invest $45 billion over the next five years to expand its refining and petrochemicals operations. The moves would put the UAE in position to become a global downstream player.

Highlights

  • Double ADNOC refining capacity by boosting Ruwais refining capacity to 1.5 mln bpd
  • Triple petrochemicals output potential by 2025
  • Strategy to capture new growth markets
  • Bring in overseas investment to fund the strategy

On Sunday ADNOC’s Chief Executive Sultan al-Jaber presented ADNOC’s downstream expansion strategy at an industry conference in Abu Dhabi Reuters reported. CEOs of oil majors including Britain’s BP, France’s Total and Italy’s Eni were also present. All three of these majors have secured long-term oil production deals in the United Arab Emirates and the obvious expectation is they invest in the downstream plans.

The centrepiece of ADNOC’s strategy is the Ruwais industrial complex. ADNOC wants to turn Ruwais into the largest integrated refining and petrochemicals complex in the world, al-Jaber said.

Reuters reported ADNOC plans to expand refining and petrochemical operations at Ruwais by adding a third refinery to boost capacity by 600,000 barrels per day (bpd) by 2025. This would lead to a total refining potential of 1.5 million bpd. Ruwais is already the world’s fourth largest in terms of capacity, at 922,000 bpd. A 1.5 million bpd Ruwais operation will overtake the 1.24 million bpd refinery in Jamnagar in western India, which is curently the world’s largest refinery.

“We are extending an invitation to existing and new partners to join with us in building a world-leading refining and petrochemicals complex and manufacturing ecosystem here in Ruwais,” al-Jaber said.

ADNOC currently produces around 3 million bpd with a goal to securing growth markets will make investments overseas, in particularly in Asia. The strategy comes at a time when all the media focus in the region has been on the Saudi Aramco IPO. On Saturday India’s oil minister who is visiting the UAE told Reuters there was a consensus between Saudi Aramco, ADNOC and Indian companies to form a joint venture for India’s Ratnagiri oil refinery.

The move follows a number of shifts over the past 18 months. ADNOC floated 10 percent of its fuel distribution business on the stock market at the end of 2017. Last year it also established a new trading unit in it’s treasury for crude oil and refined products.  Last  November the company announced it would spend over $109 billion in the next five years to increase gas output and invest in international downstream activities.

Earlier this year the company completed 40 year concession agreements for its offshore oilfields with both Western oil companies and Asian buyers. 

“Everything we are doing here is centred around ensuring that we are operating in the most efficient manner,” al-Jaber told Reuters,

Ruwais Timeline

  • 1971 Abu Dhabi National Oil Company established
  • 1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
  • 1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
  • 1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
  • 1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
  • 2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
  • 2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
  • 2014 Ruwais 261-outlet shopping mall opens
  • 2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
  • 2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
  • 2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex. 2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
  • 2018 NMC Healthcare selected to manage operations of Ruwais Hospital
  • 2018 Adnoc announces new downstream strategy at event in Abu Dhabi MAy 13

Source: Reuters, The National

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