Borouge 2 , United Arab Emirates

Borouge (Abu Dhabi Polymers Company Ltd) is investing in excess of $4.5bn to expand production capacity. The new capacity is being located adjacent to Borouge's existing facilities in Ruwais, Abu Dhabi.

The facilities will 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. Completion of the complex is slated for 2010.

The new capacity will be 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.

ETHYLENE CONSTRUCTION

In November 2006 Linde Engineering announced that it had been awarded the contract to build a cracker with a capacity of 1.5m tpa. 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 with completion slated for 41 months later. The facility will be the world's largest ethylene cracker when completed.

ENHANCED PE TECHNOLOGY AND PP TECHNOLOGY

Borstar technology will be used to produce the PE and PP at the new production plant. Borealis says that 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, 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

Contracts for the PE and PP plants along with the offsites are due to be 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 Front End Engineering and Design for the olefins conversion unit (OCU). When completed the 752,000tpa unit will be 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 that 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, Middle East and East Asia. The project focused on efficiency and shortest lead times throughout the supply chain.

During the final quarter of 2006 Borouge announced that it had initiated the tender process for storage and distribution hubs in the Middle East, North East Asia and South East Asia, along with the provision of global shipping between all of the hubs. The hub operations will be 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 S.p.A. of Italy, Work on the polyolefins unit started in early 2008 and is scheduled to be complete 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 S.A. of Spain.

BACKGROUND

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 said to be a key part of the company’s strategy for growth. Once complete, the new capacity will triple Borouge's output. The Borouge 2 plant will then be capable of producing two million tonnes of polyolefins.