ADNOC and Reliance Industries to set up petrochemical project in Abu Dhabi

The deal is largely for a stake in RIL’s prolific Jamnagar refinery, which is among the most advanced in the world
Reliance Industries (RIL) and Abu Dhabi National Oil Company (ADNOC) have signed an agreement to set up a new petrochemical complex in Ruwais, Abu Dhabi, to produce chlor-alkali, ethylene dichloride, and polyvinyl chloride (PVC).

Under the terms of the agreement, this integrated plant will have a capacity to produce 940,000 tonnes of chlor-alkali, 1.1 million tonnes of ethylene dichloride, and 360,000 tonnes of PVC annually, RIL said in a statement on Tuesday.

According to oil sector executives, it would cost upwards of Rs 30,000 crore to set up the petrochemical facility.

Chlor-alkali is used in water treatment and in the manufacture of textiles and metals. Ethylene dichloride is typically used to produce PVC. This has a wide range of applications across housing, infrastructure and consumer goods. Chlor-alkali can also enable production of caustic soda, essential for the production of aluminum.

“The market for these chemicals is expected to enjoy steady growth supported by the needs of growing demand, particularly in Asia and Africa,” the RIL statement added.

Among other global partnerships, RIL has joined hands with BP for oil exploration and fuel retailing business. It also has a pact with Saudi Aramco for its refinery business.

The proposed facility will be constructed in the TA’ZIZ Industrial Chemicals Zone, which is a joint venture between ADNOC and ADQ, another arm of the Abu Dhabi government. The TA’ZIZ is an industrial services and logistics ecosystem that drives, supports, and enables the growth of the Ruwais Industrial Complex and Abu Dhabi’s chemicals, advanced manufacturing and industrial sectors.

“In line with our 2030 strategy, we look forward to creating further opportunities across the entire TA’ZIZ ecosystem for the next generation of local industry. The domestic production of critical industrial raw materials strengthens our supply chains,” said Sultan Ahmed Al Jaber, minister of industry and advanced technology, United Arab Emirates. Al Jaber is also the managing director and group CEO of ADNOC.

“The project will manufacture ethylene dichloride, a key building block for production of PVC in India. This is a significant step in globalizing Reliance’s operations,” RIL’s Chairman and Managing Director, Mukesh Ambani said.

An RIL executive said this is the first step of the internationalisation push that Ambani announced during his company’s 44th annual general meeting.

“Tenders for the initial design of the seven TA’ZIZ chemicals derivatives projects have been awarded and work is ongoing. Final investment decisions for the projects and awards of related Engineering Procurement Construction (EPC) contracts are being targeted for 2022,” the statement added.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel