UAE Country Focus: Ruwais expansion starts taking shape
By Adal Mirza, Senior Editor, Argus Media
Abu Dhabi’s ambitions to capture the value of every dollar in a barrel of oil is becoming a reality as momentum grows in the development of a new industrial ecosystem in Ruwais, TA’ZIZ.
Located in the western region of the Emirate of Abu Dhabi along the coast of the Arabian Gulf, Ruwais already hosts a major refining complex with a design capacity of 817,000 b/d, as well as Borouge, ADNOC’s joint venture with Vienna-based olefins and polyolefins producer Borealis.
Borouge has grown its capacity tenfold to 4.5mn t/yr since it was first established in 1998 and the company’s 480,000 t/yr PP5 polypropylene plant at Ruwais is on track to start up in the coming months, growing capacity to around 5mn t/yr.
ADNOC also has a grand vision to develop a fourth cracker at Ruwais to support the UAE’s petrochemical export position and growth of TA’ZIZ, a 60:40 joint venture of ADNOC and state-owned holding company ADQ.
The new Ruwais derivatives park will benefit from close proximity to both the refinery and Borouge, receiving feedstock streams such as ethylene, C4 and hydrogen to develop a range of new products.
A total of seven new chemicals projects are being developed by TA’ZIZ. To get the ball rolling, the joint venture plans to invest more than $5bn for the developments, including $2bn in infrastructure projects to support the chemicals projects.
ADNOC has confirmed it is also in advanced discussions with investors across a wide range of entities for potential value creation opportunities, not only in the world-scale chemicals projects in the TA’ZIZ Industrial Chemicals Zone, but also through value-add manufacturing and assembly opportunities further downstream in the TA’ZIZ Light Industrial Zone as well as ecosystem enabling services in the TA’ZIZ Industrial Services Zone.
Contracts have been awarded for the first stages of design at TA’ZIZ, and work is already underway at the site, including geotechnical and topographical surveys, a marine bathymetric survey and health, safety and environment impact assessments.
UK-based engineering firm Wood is carrying out the initial design work for TA’ZIZ. Final investment decisions for the TA’ZIZ chemicals projects and awards of related engineering, procurement and construction contracts are being targeted for 2022. Commercial operations could begin in 2025.
But Abu Dhabi does not want to work alone. Its grand plans call for investment with partners that can bring access — to technology, operational experience, and perhaps most importantly, to key growth markets. TA’ZIZ also seeks to ringfence further investment opportunities for local investors and industrialists, specifically.
So far, major companies have signed up for two of the seven planned projects, with more announcements expected soon.
India’s private-sector conglomerate Reliance Industries (RIL) agreed in June to build an integrated plant producing 940,000 t/yr of chlorine and caustic soda, 1.1mn t/yr of ethylene dichloride (EDC) and 360,000 t/yr of polyvinyl chloride (PVC), supplying buyers in the Middle East as well as India.
While chlorine from the plant will be used as feedstock for EDC production, its caustic soda output could potentially be used for alumina refineries in Abu Dhabi, which currently consume about 150,000-180,000 t/yr.
The EDC plant will need around 790,000 t/yr of chlorine as feedstock, while the 360,000 t/yr PVC plant will require about 580,000 t/yr of EDC. The balance of the EDC is expected to be prioritised for export to India, a growing market which imported around 720,000t last year.
The bulk of the PVC output may be sent to markets India, which currently imports around 2mn t/yr.
ADNOC is also leveraging its existing joint ventures, announcing in June that nitrogen fertilizer producer would join as a partner in a new world-scale 1mn t/yr blue ammonia project at TA’ZIZ.
Fertiglobe is a joint venture of ADNOC and Dutch fertilizer producer OCI, which produces around 16.1mn t/yr of nitrogen fertilizers and other products globally. It already produces 1.2mn t/yr of ammonia at a plant in Ruwais.
The blue ammonia project is notable because ADNOC views hydrogen as a potential alternative and low-carbon fuel for power generation. Converting “blue hydrogen”, produced from natural gas with the CO2 captured and stored or reused, into blue ammonia has emerged as the most likely way to export the fuel.
ADNOC produces some 300,000 t/yr of hydrogen at Ruwais already for its downstream operations and plans to expand output to more than 500,000 t/yr. Abu Dhabi also currently captures around 800,000 t/y of CO2 from steel production facilities in Abu Dhabi, which is injected into its onshore fields.
ADNOC is today one of the lowest cost and least carbon intensive energy producers globally. Increased CO2 reinjection will help make its output even more cost effective, replacing valuable natural gas currently being reinjected for enhanced oil recovery, giving ADNOC a double benefit, a saving it can potentially pass on to consumers.
Capturing greater volumes could potentially push ADNOC towards the concept of a “circular carbon economy” where the CO2 is used as a feedstock for other products. While no such commitments have been made by ADNOC at this stage, the company is evaluating a wide range of potential solutions to enhance or expand its carbon capture capabilities and support the growth of its low-carbon product portfolio.
Either way, carbon capture, blue hydrogen and blue ammonia look set to become key elements to ADNOC’s future growth plans alongside its ambitions to grow crude oil production from just over 4mn b/d now to 5mn b/d by 2030.
Three pilot cargos of blue ammonia have already been shipped to customers Japan, a key potential export market for the new fuel that can be used to decarbonize power generation, fertilizer production and heavy transport, among other sectors.