$200m Kizad plant catalyst for growth

Abu Dhabi pushes further downstream with a plant to make a specialised material for oil refining.

Construction on a US$200 million plant for specialised catalysts used in oil refining is scheduled to start at Kizad this year. Christopher Pike / The National

A US$200 million factory for specialised catalysts used in oil refining is due to be built in Abu Dhabi as the emirate pushes further down the hydrocarbon value chain.

Scheduled to begin construction at Khalifa Industrial Zone Abu Dhabi (Kizad) this year, the plant will make specialised chemical compounds used to split crude into diesel, polymers and other products.

The first plant for fluid catalytic cracking catalysts in the Middle East - most in the relatively small $2.5 billion global market are based in Europe or North America - it follows the movement of refining and oil consumption from West to East.

"Global capacity was getting tight and the question is do you invest in existing sites or do you invest in other regions?" asked Shawn Abrams, the president of Grace Catalysts Technologies, a Maryland-based company that holds a 70 per cent stake in the joint venture. "Our decision was to invest where the growth was."

Its partner, the UAE agricultural company Al Dahra, will focus on the logistics of procuring raw materials such as sodium silicate and aluminium sulfate and moving the finished catalysts to consumers in Oman, Kuwait and Saudi Arabia.

Although officials from Takreer, the refining subsidiary of Abu Dhabi National Oil Company, were present at a ceremony yesterday at the Emirates Palace hotel to mark the joint venture, Takreer has not yet confirmed any future orders for catalysts from the new plant.

Takreer is scheduled to double its refining power by the start of next year with an extra 417,000 barrels per day (bpd) of capacity at its Ruwais site. The $10bn expansion, which will allow the UAE to meet all of its domestic demand for products such as petrol and diesel, will coincide with the launch of the catalyst logistics hub at Kizad.

"There will be one key end user that we'll want to supply," said Mr Abrams. "They have to make their decisions."

Grace plans to complete engineering for the factory, which is scheduled to come online at the end of 2015, later this month and to launch a tender after that for construction to kick off before the end of the year. The facility joins a number of other future Kizad tenants ranging from silicon smelters to construction board manufacturers.

Mr Abrams said the plant will create 200 jobs, and Al Dahra is already training UAE nationals for some roles.