Borouge 2, United Arab Emirates

Borouge (Abu Dhabi Polymers Company) invested $5bn to expand its production capacity. The new facility is located adjacent to Borouge's existing facilities in Ruwais, Abu Dhabi.

The facilities comprise a 1.5mtpa ethylene cracker, along with one 540,000tpa enhanced polyethylene unit, two 400,000tpa polypropylene units and an olefins conversion unit of 752,000tpa.

The complex was completed in the second half of 2010.

The new capacity is marketed mainly in the Middle East and Asia Pacific, targeting the high-end differentiated applications in the value-added pipe and high performance packaging areas.

In 2010 a new project, Borough 3, was announced.

The ongoing project will increase capacity by 2.5mtpa, bringing the total annual capacity of the petrochemical plant to 4.5mtpa by the end of 2013.

"The 752,000tpa unit is currently the largest in the world."

The expansion will create the world's largest integrated polyolefins plant.

Borough 3 includes construction of a new ethane cracker, two polyethylene units, two polypropylene units and a low density polyethylene (LDPE) unit.

World's largest ethylene cracker construction

In November 2006 Linde Engineering announced that it had been awarded the contract to build a cracker with a capacity of 1.5mtpa.

Awarded on a lumpsum engineering procurement and construction (EPC) basis, the contract was valued at $1.3bn. Work on the cracker began at the end of 2006. The facility is the world's largest ethylene cracker.

Enhanced PE technology and PP technology

Borstar technology is used to produce the PE and PP at the production plant. Borealis says the Borstar technology is unique as it is designed for PE as well as PP production.

Borealis added that the technology makes better products than conventional PP processes, and it also makes products with greater consistency and fewer transitions, due in part to an advanced process control system as used in Borstar PE.

Contracts awarded

Contracts for the PE and PP plants along with the offsites were awarded during the first and second quarter of 2007.

Fluor Middle East was awarded the contract to provide the front end engineering and design (FEED) for the polyolefins units. The work was conducted at Fluor's offices in Holland and the US.

ABB Lummus Global was awarded a contract to provide the FEED for the olefins conversion unit (OCU). The 752,000tpa unit is the largest in the world.

HSBC Bank was awarded the financial advisory contract, and Foster Wheeler was awarded the project management consultancy contract.

During June 2006, Maersk Logistics announced it had been awarded a major supply chain consultancy contract by Borouge. Maersk Logistics provided a supply chain concept for marketing Borouge's products in key markets, including China, the Middle East and East Asia. The project focused on efficiency and shortest lead times throughout the supply chain.

"The Borouge 2 plant is capable of producing two million tons of polyolefins."

During the final quarter of 2006 Borouge announced it had initiated the tender process for storage and distribution hubs in the Middle East, orth east Asia and south east Asia, along with the provision of global shipping between all of the hubs. The hub operations were implemented throughout 2007.

A mandate was awarded to MWH to conduct the health, safety and environmental impact assessment for the proposed facilities and the lenders.

The first phase of the study was completed during the final quarter of 2006.

In December 2007 Borouge awarded two contracts worth in excess of $3bn for the Borouge 2 expansion project. The first was a $1.855bn awarded on a lumpsum turnkey basis for construction of the three new Borstar technology polyolefins units, material handling facilities, laboratory facilities and marine works to Tecnimont of Italy.

Work on the polyolefins unit started in early 2008 and was completed by 2010.

In addition to this, a further $1.234bn contract was awarded for the construction of utilities and off-sites for the expansion project to Tecnicas Reunidas of Spain.

A consortium of Maire Tecnimont and Samsung Engineering was awarded a $1.255bn contract for the construction of two Borstar enhanced polyethylene and two Borstar enhanced polypropylene units. The consortium was also awarded a $400m contract for the construction of a 350,000tpa LDPE unit.

Hyundai Engineering and Construction was awarded a $935m for the utilities and off-site facilities for the Borouge 3 project. Hyundai was also awarded the contract for the construction of a cross-linkable polyethylene (XLPE) unit.

A $1.075bn contract for construction of the Borouge 3 ethane cracker was awarded to Linde Engineering.

Al Asab General Transportations and Contracting Establishment were appointed as the contractors for site preparation works. In January 2011, the contract for the construction of the non-process buildings was awarded to Alpine Bau Deutschland. Management support for implementation of the project is being provided by Bechtel.

Background to the Borouge projects and developments

Borouge was established in 1998 as a joint venture between Abu Dhabi National Oil Company (ADNOC) and Borealis.

Described as one of the world's largest plastics projects, Borouge 2 is a key part of the company's strategy for growth.

The new capacity has tripled Borouge's output. The Borouge 2 plant is capable of producing two million tonnes of polyolefins.

Provision of port services

"Described as one of the world's largest plastics projects, Borouge 2 is a key part of the company’s strategy for growth."

During June 2008 the Abu Dhabi Ports Company (ADPC), which has responsibility for development of ports, industrial and trade logistics zones, signed a memorandum of understanding (MOU) with Borouge, to provide port services at the planned Khalifa Port.

The MOU also covered Borouge's smooth transfer of its ports operation from Mina Zayed Port to Khalifa Port.

Borouge currently uses Mina Zayed for a throughput capacity of 600,000tpa of polyethylene, but required port services for a throughput capacity of 2.1mtpa of polyolefins.

By 2014 this is expected to rise to 4.5mtpa when the proposed Borouge 3 expansion is completed.

The MOU ensured that during the design, development and operation of Khalifa Port, APDC ensured that sufficient land, storage facilities, infrastructure and services are made available at the port of accommodate Borouge's products and ensure the seamless transition of Borouge's current port operation at Mina Zayed to Khalifa Port. The port became operational in November 2010.

Shanghai logistics hub

Agility (Abu Dhabi) PJSC was awarded a contract by Borouge to build its Compound Manufacturing Unit and Shanghai Logistics Hub that was inaugurated in April 2010.

Along with the new facilities, which are located in Shanghai, China, Agility provided local logistics services for Borouge's customers in Asia. The award was announced in August 2008.

Under the contract, Agility carried out the design, development and subsequent operation of the logistics hub, ensuring there is sufficient infrastructure, storage facilities, and packaging and distribution services to accommodate Borouge products which arrive from the production facilities in Abu Dhabi.

Agility will handle and distribute some 600,000tpa of polyolefin through the logistics hub each year.