ADNOC to invest US$45bn over five years in downstream bet

8Abu Dhabi National Oil Company (ADNOC) said it would invest US$45bn over the next five years to boost the company's downstream portfolio, giving it a chance to cash in on the growing demand for petrochemical products

The state-owned oil company said it would expand capacity at its Ruwais refinery by more than 65 per cent by 2025. This would bring the refinery's capacity to 1.5mbpd.

ADNOC is also looking to build a large mixed feed cracker at the refinery which would more than triple its petrochemical output to 14.4mmtpa by 2025.

State-owned oil companies in the Middle East have been looking to increase their exposure to the downstream market to serve increasing petrochemical demand and lessen their exposure to oil prices.

Oil giant Saudi Aramco signed a MoU to build a refinery at Ratnagiri in India, in a project estimated to be worth US$44bn.

“Given the projected increase in demand for petrochemicals and higher value refined products, we are repositioning ADNOC to become a leading global downstream player. We will invest significantly in Ruwais and open up attractive partnership and co-investment opportunities along our extended value chain to create a powerful new downstream engine and springboard for growth that will benefit our country, our company and our partners. Importantly, the expansion plans for Ruwais will also support Abu Dhabi and the UAE’s economic development and diversification, create high-skilled jobs and enhance the country’s status as a globally attractive destination for energy investments”, Sultan Ahmed Al Jaber, UAE minister of state and ADNOC Group CEO, said.

ADNOC said it is in discussions with international energy companies and domestic investors regarding its downstream expansion plans.

ADNOC will also build petrochemical derivatives and conversion parks at the refinery.

It will invite partner companies to produce new products from the feedstocks at the proposed Ruwais derivatives park, enabling the company to tap markets for construction chemicals, oil and gas chemicals, surfactants and detergents among others.

The proposed Ruwais conversion park will focus on making petrochemical products including packaging materials, coatings, high voltage insulation and automotive composites.

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