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 evaluate cooperation in the construction of a chemical industry complex in Mundra, Gujarat. In India.
The memorandum marks the second phase of Adani and BASF's investment plans announced in January 2019.Adnoc and Borealis will join as partners. A number of options are being considered for the structuring of the petrochemical complex, which has an estimated total investment of about $ 4 billion, in order 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 a polypropylene production complex, owned by ADNOC and Borealis, through the application of advanced "Borstar" technology.
The polypropylene complex will be the first overseas investment between ADNOC and Borealis, and is part of their strategic cooperation with Borouge. 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), oxo-C4 (butanol and ethyl hexanol-2), butyl acrylate (BA), and other potential products from refining and petrochemicals.
The port of Mondra in Gujarat has been selected as the site for the construction of the complex, which will produce mostly materials for sale in Indian markets, to meet the needs of a wide range of local industries in India including construction, contracting, automotive and paint.
The partners intend to rely entirely 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 their plans are at 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.
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's guidance to enhance profitability and increase economic return, this collaboration contributes to the advancement of the implementation of ADNOC's strategy of building and documenting mutually beneficial partnerships. Important in this partnership is the supply of propane raw material 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 ambitions to grow internationally in the refining and petrochemical sector. In addition, this project will allow 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 cooperate with our international partners to establish a chemical production complex at Mundra Port. This project is part of our commitment to the 'Made in India' initiative and serves our broader goal of conciliation. Between investing growth opportunities and seeking to serve the country.
Dr. Martin Brodermoller, 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 look forward to starting working with our partners to set up 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 strengthen our presence in the production of polypropylene and introduce 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.