Page 4 - DMEA Week 41 2021

DMEA COMMENTARY DMEA

ADNOC scraps Ruwais plans

as prices is set for Fertiglobe

A 400,000 bpd refinery has been cancelled while ADNOC
proceeds with work to monetise and develop its ammonia assets.

MIDDLE EAST STATE-OWNED Abu Dhabi National Oil 2024, with the now-cancelled 400,000 bpd unit
Co. (ADNOC) this week said that it would no seen complete by 2026 and increasing Abu
longer proceed with a major new refinery at the Dhabi’s refining capacity from 922,000 bpd at
WHAT: Ruwais downstream hub, citing a lack of com- present to 1.5mn bpd. Meanwhile, according
ADNOC has cancelled mercial attractiveness. Ambitious plans for the to a research note by consultancy IGM Energy,
plans for a new refinery facility had been in the works for several years, work is ongoing across the other Emirates to add
at Ruwais, though existing though even a pared back version has now been around 265,000 bpd of refining capacity despite
facilities continue to be shelved as ADNOC turns its attention elsewhere expansion plans having been reined in during
expanded. downstream. recent years.
Meanwhile, the company is continuing to lev- ADNOC is currently undertaking a $3.5bn
WHY: erage assets to raise cash as the Fertiglobe joint project to improve crude flexibility at Ruwais
While the refinery venture (JV) with chemicals producer OCI is set which will raise the refinery’s capacity for pro-
has been shelved, the to become the latest to hit the market with pric- cessing heavy crude streams, enabling ADNOC
company is proceeding ing announced ahead of its listing. to increase exports of lighter grades.
with major moves to
increase its capabilities Ruwais refinery TA’ZIZ
in chemicals and The cancelled Ruwais unit had been included ADNOC is also building a world-scale chemicals
ammonia as it seeks in plans unveiled by the company in May 2018 complex at TA’ZIZ within the company’s Ruwais
to become a global which covered the construction of a 600,000 Derivatives Park.
hydrogen leader. barrel per day facility alongside the existing TA’ZIZ is a JV development between
837,000 bpd hub. This was altered a year later, ADNOC and holding company ADQ which
WHAT NEXT: with ADNOC instead electing to construct a seeks to drive the development of industrial
The Emirati firm is new 400,000 bpd refinery while overhauling projects within the planned Ruwais down-
making bold strategic and expanding the existing refining complex by stream hub and promote economic diversifi-
moves as it seeks to another 200,000 bpd. cation. In June, Reliance Industries Ltd (RIL)
future-proof its business. The latter expansion project is not affected said that it would invest in the project and the
by the cancellation of the 400,000 bpd unit and Indian company last week set up an Emirati sub-
sources quoted by Argus said that the company sidiary for trading crude oil, refined products,
is proceeding with these plans, which offer sig- petrochemicals.
nificantly better economics than building a The chemicals facility will produce chlor-al-
greenfield facility. kali, ethylene dichloride and polyvinyl chloride
Under the amended 2019 plan, the Ruwais (PVC) to capitalise “on growing demand for
expansion was expected to be completed by these critical industrial raw materials and [will]

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