Mubadala Investment Company, the Abu Dhabi investment firm, plans to increase investment in petrochemicals, amid optimism for future growth due to cheap natural gas prices.
“We’re thinking this is the right time to invest because of the very competitive feedstock in the US due to the shale [gas] revolution,” said Musabbeh Al Kaabi, chief executive of petroleum and petrochemicals at Mubadala.
“Polyethylene and [the] petrochemicals industry [in general] is enjoying a very healthy demand going forward, on average, 1.3 per cent above GDP globally. We would like to maintain our strong position in petrochemicals and that is why we are expanding.”
Mr Al Kaabi was speaking ahead of the annual Abu Dhabi International Petroleum Exhibition and Conference from November 13-16.
Mubadala’s petroleum and petrochemical portfolio is valued at US$41 billion and represents 32.7 per cent of the company’s total holdings. The company is the world’s fourth largest producer of polyethylene in the world.
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In addition to foreign investments that include Austria’s Borealis and Canada’s Nova Chemicals Corporation, Mubadala is working with Adnoc to expand the state-owned oil company’s petrochemical facility at Ruwais in the Western Region of Abu Dhabi.
Abu Dhabi has said that it plans to substantially increase its petrochemicals interests globally, as well as to expand domestic output by two-and-a-half times, to 11.5 million tonnes per year by 2025.
Demand in China and Asia for petrochemicals and plastics, including lightweight automotive components, essential utility piping and cable insulation, is forecast to double by 2040, Adnoc has forecast.
Through its wholly owned subsidiary Nova, Mubadala earlier this year acquired the Geismar olefins complex in Louisiana for $2.1bn, giving it a plant producing 885,000 tonnes of ethylene. Separately, Nova along with Total and Borealis are building a 1 million metric tonne a year ethane steam cracker in Port Arthur, Texas.
Mubadala swung to a profit in the first half of this year on the back of strong operating income, gains from financial investments and favourable currency movements.
The company, which reported its first independent interim results after merging with International Petroleum Investment Company, said first half profit stood at Dh4.2bn compared with a loss of Dh4.7bn a year earlier.