Adnoc and Borealis consider listing minority stake in Borouge

The companies will provide further material updates 'when appropriate'

A storage unit at the Borouge compounding plant in Shanghai. Qilai Shen / The National

Adnoc and Austrian chemicals producer Borealis are considering a potential initial public offering of a minority stake in their joint venture Borouge, a petrochemical manufacturer based in the UAE.

Abu Dhabi-based Borouge consists of production unit Borouge ADP and sales and marketing company Borouge Pte. Adnoc holds 60 per cent in Borouge ADP while Borealis holds the remainder. Both companies have an equal stake in Borouge Pte.

Adnoc and Borealis will provide further material updates “as and when appropriate”, they said on Tuesday.

No listing venue was specified for the IPO but were it to take place on Abu Dhabi Securities Exchange it would be among the latest in a string of IPOs on the second-biggest Arab stock market.

The shares of Abu Dhabi Ports Group, the operator of industrial cities and free zones in the emirate, began to trade on the ADX last week.

“As part of our ‘ADX One’ [initiative], we will continue to encourage the listings pipeline to enhance our dynamic capital market,” said ADX managing director and chief executive Saeed Al Dhaheri last week.

In October, Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, raised about $795 million from its listing on the ADX. That offering came after that of Adnoc Drilling, which reaped $1.1 billion from its listing in the same month.

In July, Al Yah Satellite Communications, better known as Yahsat, a unit of Mubadala Investment Company, raised about $730m through its listing.

Last week, Adnoc and Borealis said they had started construction of the fourth Borouge plant within the polyolefin manufacturing complex in Ruwais.

The plant will complement the local supply chain and meet the projected growth in demand for polyolefins in the Middle East, Africa and Asia, while providing critical feedstock to the Taz’iz Industrial Chemicals Zone in Ruwais, the Abu Dhabi Media Office said at the time.

The emirate plans to triple its petrochemical production capacity, from 4.5 million tonnes currently produced entirely by Borouge in Ruwais, by 2025.

Borouge’s first polythene unit was commissioned in 2001 and its capacity is 450,000 tonnes a year.

Borouge 2 and 3, commissioned in 2010 and 2014, raised the capacity to 2 million tonnes and 4.5 million tonnes of polythene and polypropylene a year, respectively.

Borouge 4 will increase the company’s overall polyolefin production to 6.4 million tonnes, making it the world’s largest single-site polyolefin complex.

Borealis is the eighth-largest producer of polythene and polypropylene globally and has oil and gas company OMV as its significant minority shareholder.