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UAE: ADNOC announces USD 45 billion investment plan to become leading downstream player
13 May 2018
The Abu Dhabi National Oil Company (ADNOC) has unveiled plans to invest AED 165 billion (US $45 billion) alongside partners, over the next five years, to become a leading global downstream player, enabling it to further stretch the value of every barrel it produces to the benefit of ADNOC, its partners and the UAE. The plans were unveiled at the ADNOC Downstream Investment Forum, which took place today in Abu Dhabi, UAE. The unprecedented investment program will underpin a new downstream strategy to significantly expand ADNOC’s refining and petrochemical operations at Ruwais in the UAE, and undertake highly targeted overseas investments to secure greater market access.
Building on the existing strengths and competitive advantages of the Ruwais Industrial Complex, ADNOC will create the world’s largest and most advanced integrated refining and petrochemicals complex. Through a combined program of strategic partnerships and investment, ADNOC will increase its range and volume of high-value downstream products, secure better access to growth markets around the world and create a manufacturing ecosystem in Ruwais that will significantly stimulate In-Country Value creation, private sector growth and employment. The strategy is expected to add more than 15,000 jobs by 2025 and contribute an additional 1% to GDP per year.
H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said:
'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', he added.
ADNOC’s downstream investment plans are in line with its 2030 strategy of a more profitable upstream, more valuable downstream and sustainable, economic gas supply, underpinned by more proactive and adaptive marketing and trading. Building on its legacy of success, ADNOC has undertaken a significant group transformation program over the last two years. The business has improved operational efficiency, enhanced performance and realigned the management of its portfolio of assets and capital to create a new and expanded partnership and investment model.
ADNOC is now accelerating this transformation by unveiling its plans to become a leading global downstream player. The new strategy will be supported by ADNOC’s 45 year plus legacy of a unique and open approach to partnerships, built on the UAE’s bedrock values, reliability and attractiveness. ADNOC will again look to create long term downstream partnerships, providing access to the most attractive parts of the energy value chain, to redefine ADNOC’s future growth.
Partners who bring operational expertise, technology, financial acumen and the ability to develop and open new markets will, in return, benefit from the strengths of the Ruwais Industrial Complex, including: competitive feedstock; strong integration; a site operated by a single owner to maximize synergies; an advantaged geographic location well-positioned for east-west trade; and a highly developed port and logistics infrastructure.
H.E. Dr Sultan Al Jaber also said:
'The unique competitive advantages and world-scale of Ruwais, combined with a US $45 billion-dollar investment plan and our ambitious smart growth strategy, create a unique opportunity for ADNOC to redefine the global refining and petrochemicals landscape. As in the past, our full potential will be accelerated through value-adding partnerships, so we are extending an invitation to both existing and new partners to join with us in building a world-leading refining and petrochemicals complex and manufacturing ecosystem here in Ruwais.'
ADNOC’s existing and sizeable downstream portfolio comprises eight companies processing 10.5 billion standard cubic feet (scf) of gas per day, and with a refining capacity of 922,000 barrels per day (bpd) of condensate and crude. They produce some 40 million tons per year (mtpa) of refined products, and a range of other products, including granulated urea, liquefied petroleum gas (LPG), naphtha, gasoline, jet fuel, gas oil and base oils, fuel oil, and other petrochemical feedstock.
Plans are well advanced to expand the complex’s refining capacity by more than 65%, or 600,000 bpd by 2025, through the addition of a third, new refinery, creating a total capacity of 1.5 million barrels per day (mbpd). The new refinery, coupled with other projects underway within the Ruwais complex, will significantly increase the capability, flexibility and output of Abu Dhabi’s refining operations by adding to the range of crudes that can be processed and that in turn enables the export of increased volumes of the UAE’s high-value Murban crude.
The expansionary US $45 billion investment program will also see the entire Ruwais complex upgraded to dramatically increase its flexibility and integrated capabilities to produce greater volumes of higher-value petrochemicals and derivative products. It includes a plan to build one of the world’s largest mixed feed crackers, trebling production capacity from 4.5 mtpa in 2016 to 14.4 mtpa by 2025.
ADNOC will also develop a new, large-scale, manufacturing ecosystem in Ruwais through the creation of new petrochemical Derivatives and Conversion Parks. The Ruwais Derivatives Park will be built on a six square kilometer area adjacent to, and fully integrated with, the larger Ruwais complex. The Ruwais Derivatives Park will act as a prime catalyst for the next stage of petrochemical transformation by inviting partners to invest and produce new products and solutions from the growing range of feedstocks that are available in Ruwais. This will enable the creation of numerous new petrochemical activities and value chains, in such fields as construction chemicals, oil and gas chemicals, surfactants and detergents, to name just a few.
Furthermore, the new Ruwais Conversion Park will spur new business creation even further down the value chain, taking feedstock from both the Derivatives Park and other Ruwais assets to manufacture higher-value end products, including packaging materials, coatings, high voltage insulation and automotive composites. The Conversion Park, occupying another 3.6 square kilometers, will also act as a catalyst for the creation of focused industry clusters, that can not only supply products and solutions using the derivatives and other facilities available, but will also leverage the proximity of such an interconnected ecosystem to drive expertise, innovation and entrepreneurship.
Both the Ruwais Derivatives Park and Ruwais Conversion Park will act as a focal point for the global petrochemicals industry and will cement Ruwais’s role as a key node in the global refining and petrochemical supply chain. Across both parks, in addition to supplying feedstocks, ADNOC will make available developed land, infrastructure, utilities and shared services at attractive rates to partners. It will become a destination of choice for domestic and international partners who wish to set up their businesses or manufacturing facilities in the UAE, one of the world’s most stable, attractive and business-friendly investment destinations.
As part of the overall Ruwais area development, ADNOC will undertake the significant expansion and development of Ruwais City to meet the increase in demand for housing and other facilities resulting from the significant enlargement of the Ruwais Industrial Complex. ADNOC plans to develop Ruwais into an even more attractive and thriving city for a greatly expanded, diverse and high-skilled workforce. Along with new homes, ADNOC is also constructing infrastructure and community enhancement projects for Ruwais City that include the expansion of the public transport system and numerous community and other facilities such as new healthcare facilities, secondary and tertiary educational facilities, a central park and recreation spaces, a new mall, new beach facilities and a traditional souq.
Significant interest in the myriad of new investment and downstream partnership opportunities has already been expressed and discussions are now taking place with global energy companies and domestic investors with the operational expertise, financial strength and long-term vision required to support delivery of these initiatives.