Site preparation under way for first phase of multi-billion dollar projects at Ta'ziz

The final investment decisions on planned projects at the industrial chemical zone in Ruwais are expected before the end of this year

The Ta'ziz industrial chemical zone in Ruwais. Photo: Adnoc

The site preparation is “under way” for the first phase of projects at the Ta'ziz Industrial Chemical Zone in Ruwais.

The projects, which include a $2 billion chlor alkali, ethylene dichloride and polyvinyl chloride plant, a blue ammonia plant and a methanol plant, are currently at the design stage.

The final investment decisions on these big industrial projects, which are set to begin operations in 2025, are expected before the end of 2022, Adnoc and ADQ, majority shareholders in the industrial zone, said.

Ta’ziz comprises three zones: an industrial zone that will host chemicals production, a light industrial zone housing downstream conversion industries that will convert the output of the chemicals zone into consumable products, as well as an industrial services zone that will have a variety of companies.

A new “low-carbon footprint” steam cracker will be built in the industrial zone to supply feedstock for downstream operations, Adnoc and ADQ said.

The project, which marks the “next phase” of growth for the industrial zone, is at the feasibility study stage, with the design phase set to commence in the first quarter of 2023, the companies said.

A steam cracker is a petrochemical plant that cracks light hydrocarbons such as ethane, propane and light naphtha to produce ethylene.

“Following strong demand from partners and investors for the first phase of world-scale growth at Ta’ziz, and capitalising on growing global demand for chemicals, we are expediting plans for the next phase of expansion of our chemicals production,” said Khaleefa Al Mheiri, acting chief executive of Ta’ziz.

Adnoc L&S, the logistics arm of state-owned Adnoc, and AD Ports Group will develop a liquids terminal and logistics centre with storage company VTTI, which will include the construction of a new port.

The industrial zone’s utilities will be jointly developed by Adnoc and the Abu Dhabi National Energy Company, better known as Taqa.

The engineering, procurement and construction contracts for the utilities and logistics centres have been tendered, Adnoc and ADQ said.

The chemicals sector is an integral part of the UAE's Operation 300bn, which aims to raise the contribution of the country's industrial sector to its gross domestic product to Dh300bn by 2031.

Ruwais, which is at the centre of Adnoc’s downstream ambitions, has been earmarked for a multibillion-dollar expansion that will expand its refining capacity to 1.5 million barrels per day by 2025, from the current 922,000 bpd, making it the largest refiner in terms of capacity.

Oil and gas companies worldwide have been investing heavily in the production of petrochemicals, used in everything from plastics to clothing.

Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding about 7 million bpd by the end of this decade, according to the International Energy Agency.

The UAE, which aims to achieve its net zero emissions by 2050, is also positioning itself as a major hydrogen exporter.

Adnoc is already a major producer of hydrogen and ammonia, with more than 300,000 tonnes of hydrogen produced annually at the Ruwais Industrial Complex.

Hydrogen, which can be produced from both renewable energy and natural gas, is expected to play a key role in the coming years as economies and industries transition to a low-carbon world to mitigate climate change.

Hydrogen comes in various forms, including blue, green and grey. Blue and grey hydrogen are produced from natural gas, while green is derived from splitting water by electrolysis.

The size of the global hydrogen industry is expected to hit $183bn by 2023, up from $129bn in 2017, according to Fitch Solutions.