Borealis eyes large-scale Asian joint investments with Adnoc

Exclusive from Adipec 2018: Austrian petrochemicals firm part-owned by Mubadala Investment Company is also considering setting up a plastics recycling facility in Ruwais

Borealis CEO Alfred Stern says the firm is planning to work with Adnoc on major petrochemicals investments. Reem Mohammed / The National

Petrochemicals producer Borealis is considering joint investments with Abu Dhabi National Oil Company in projects across growth markets such as India and China, and to set up a plastics recycling facility in the Ruwais region, its chief executive said.

The Austrian chemicals company, owned by the country’s state-backed producer OMV as well as Mubadala Investment Company, is a joint developer with Adnoc of Abu Dhabi’s biggest chemicals facility, Borouge.

The scale of the potential investments could be around the size of Borouge, Alfred Stern, the chief executive of Borealis, told The National at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) on Monday.

"We will build on the natural resources available in Abu Dhabi. So I would say that big-scale things will be built on that, which means that it's going to be similar to Bourouge-type investments," Mr Stern said.

“We fit into [the broader Adnoc petchems expansion strategy] in a great way. These are the discussions happening on the same scale, and we continuously look together where should we place our next growth effort.”

Borealis, together with Adnoc, is investing in Borouge 4, and beyond that the company is “looking for the next opportunity on the horizon, in growth countries, like India, China and the Asian region,” he said.

The petchems sector is expected to grow by 60 per cent by 2050 with capital expenditure being allotted to meet upstream and downstream demand in the Middle East alone, chief executive of Adnoc, Dr Sultan Al Jaber, said in October.

The UAE, as a major oil producing nation that accounts for about 4.2 per cent of global crude production, plans to expand its investment portfolio, he said at the time.

Adnoc, which expects to invest around $45 billion (Dh165.3bn) on downstream with partners over the next five years in Abu Dhabi, also signed its first international partnership with Saudi Aramco in June to develop a chemicals complex on the west coast of India.

Borealis also has aspirations to upscale the company in India, the third-biggest Asian economy. However, Mr Stern said the JV partners for the Indian refinery will have to make enough progress on the project before Borealis could start engaging in the downstream petchems projects there. "It would take a [long] enough time," he noted.

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Borealis, which completed the acquisition of Ecoplast Kunststoffrecycling in Austria in October, will focus its potential plastic recycling facility in Abu Dhabi’s Ruwais on industrial waste rather than consumer waste.

“If you want to be a recycler, this is an obvious place to start. That [plastic recycling facility] could be a possibility in Ruwais, and we are looking at that,” he said.

There are no concrete plans as yet, and Borealis is discussing options with Adnoc.

“Anything we do here, we would always discuss with Adnoc and see what is the win-win situation for both the partners,” he said. “We wouldn’t do anything without them.”

The company, whichacquired German recycler mtm plastics in 2016, is manufacturing products using recycled plastic.

It recently had success with the production of 100 per cent recycled plastic bottles with consumer goods company Henkel in Europe.

Borealis, which looks to crackdown on marine litter in Indonesia, the second biggest plastic polluter of the seas after China, is looking to add two more Indonesian cities to its pilot project. It is also looking to bring in more international partners to contribute to its "Stop" programme, Mr Stern said.

Borealis plans to raise about $10m to $15m to fund the pilot project in new cities.

“In Indonesia alone, an estimated 100 tonnes [of waste] is going into marine littering. We need to scale it fast [the pilot project] and we need more partners,” he said.

“I’m talking with a lot of my colleagues in the industry, but it is not possible to solve this [problem] as petrochemical producers, we need the entire supply chain.”