ADNOC, Borealis weigh investment in Adani-BASF’s $4 bn India chemical project

ADNOC, Adani, BASF and Borealis sign Memorandum of Understanding to further evaluate collaboration for a chemical production complex in Mundra, India

DUBAI: Abu Dhabi National Oil Company (ADNOC) and Austria-based petrochemical firm Borealis AG has partnered with Adani and BASF for a joint feasibility study of a chemical complex in Mundra, located in the western state of Gujarat in India.

Total investment is estimated to be up to $4 billion. However, investment stake details of each company in the project has not been divulged. The partners aim to finalize the joint feasibility study by the end of Q1 2020. Production is intended to commence in 2024.

In January 2019, Indian infrastructure conglomerate Adani Group – led by billionaire business mogul Gautam Adani – announced plans to set up $2.24 billion chemical factory at Mundra in partnership with German firm BASF, touted to be the world’s largest chemical producer.

The four companies – ADNOC, Adani Group, BASF SE and Borealis AG – have signed a Memorandum of Understanding (MoU) to engage in a joint feasibility study to evaluate a collaboration for the establishment of the chemical complex.

The designated site is planned at Mundra port in Gujarat, India, and the products are predominantly for the Indian market, serving a wide range of local industries, including construction, automotive and coatings.

The project will explore supply concept for 100% renewable energy. It will also examine various structuring options for the chemical complex that will leverage the technical, financial and operational strengths of each company.

The collaboration will evaluate 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.

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.

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

ADNOC is one of the world’s leading diversified energy and petrochemicals groups with a daily output of about 3 million barrels of oil and 10.5 billion standard cubic feet of gas. With 14 specialist subsidiary and joint venture companies, ADNOC is a primary catalyst for the UAE’s growth and diversification.

“We are very pleased to collaborate with our international partners to establish a Chemical Manufacturing Complex at Mundra Port. We stand committed to the ‘Make in India’ initiative and serve the larger purpose of aligning growth opportunities with creation of goodness for the nation,” said Gautam Adani, Chairman of the Adani Group.

To report this post you need to login first.