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OIL REFINING
ADNOC’s refining operations have undergone major expansion to keep pace with increasing regional and international demand. The Abu Dhabi Oil Refining Company (Takreer) was established in 1999 to take over responsibility for all of the Group’s refining operations. The scope of activities of the Ruwais and Umm Al Nar refineries include refining crude oil and condensate, supply of petroleum products in compliance with domestic and international standards, and sulphur granulation.
Key Developments
In 2000, two new world-class condensate splitters with a total design capacity of 280,000 BPSD were commissioned at the Ruwais refinery, more than doubling the refining capacity to over half a million barrels a day, and making ADNOC one of the region’s biggest operators. The addition of processing trains for naphtha distillation, kerosene sweetening, and LPG dehydration amine sweetening, supported the Group’s objective to add value to its resources by exporting finished products as well as crude oil and condensate.
In 2001, a major project to convert the bulk of gasoline production to unleaded gasoline was implemented, in anticipation of the UAE Government’s policy to phase out leaded gasoline. The project was successfully completed on time, enabling the ‘UAE Goes Green’ conversion programme to start on 1 January 2003.
Also in 2001, completion took place of the expansion of the Sulphur Handling Terminal (SHT), where liquid sulphur is granulated and shipped through a separate jetty. SHT receives sulphur removed from gaseous and liquid hydrocarbons from Umm Al Nar and Ruwais oil refineries, the GASCO NGL plant, and the ADGAS LNG plant at Das Island. The expansion is expected to result in an increased SHT capacity from 4,250 TPD to 6,250 TPD. In 2002, the latest expansion of the General Utilities Plant (GUP) at Ruwais refinery was successfully tested and commissioned. This involved the addition of four gas turbines and two water desalination units. GUP was initially intended to operate on an ‘island’ basis, supplying power and utilities to plants in Ruwais Industrial Area only. In 2000, TAKREER and the Abu Dhabi Water & Electricity Authority (ADWEA) signed a Memorandum of Understanding to interconnect their electrical grids and exchange power in the future. Since 2001, total power of over 1.7 million MW/hour has been generated, while total water production exceeded 10.6 million cubic meters. GUP is now called upon to supplement the power requirements of the National Grid in the Western Region of the country.
In 2003, work commenced on the replacement of the existing Sulphur Recovery Unit (SRU) at the Ruwais refinery. It will be based on a combination of the Claus process and BP AMOCO Cold Bed Absorption (CBA) technology. The new SRU, which will have a working life of 30 years, will incorporate latest global industry standards and improved design concepts, providing a sulphur recovery efficiency greater than 99 percent, totally complying with ADNOC environmental guidelines.
A revamp of the Hydrocracker Unit at Ruwais is underway, designed to increase the current capacity of 120 percent to 135 percent of the original design, and to de-bottleneck existing constraints in the Hydrocracker Unibon and associated units, and enhance safety and reliability. Phases I and II of Takreer’s Profit Improvement Program (PIP) have been successfully completed, resulting in savings to date of over US$ 37 million. This program has been designed to identify and implement profit improvement opportunities in areas such as throughput maximisation, energy optimisation, yield improvement and oil loss at Ruwais and Umm Al Nar refineries.
Gas processing
UAE’s natural gas reserves are estimated at over 200 trillion cubic feet, the fifth largest in the world after Russia, Iran, Qatar and Saudi Arabia. The largest reserves are located in Abu Dhabi, where the non-associated Khuff natural gas reservoirs beneath Umm Shaif and Abu Al Bukhoosh oil fields, rank among the world’s largest.
Increased domestic consumption of electricity and growing demand from the petrochemical industry have provided incentives for UAE to increase its use of natural gas. Consumption has doubled in Abu Dhabi over the last decade.
ADGAS
Abu Dhabi Gas Liquefaction Company (ADGAS) is pioneer in the region’s gas liquefaction industry and was established in 1973, to effectively end the era of associated gas flaring. The company processes both associated and non-associated gasses at its three production trains on Das Island to produce over 8 million tons of liquefied natural gas (LNG), Liquefied petroleum gas (LPG), Paraffinic Naphtha and sulphur annually. In 2007, ADGAS celebrated the 30th Anniversary of its first shipment of LNG from its plant at Das Island and has firmly established itself as a solid and reliable sulphur amongst its global customers.
Over the past 30 years, ADGAS has achieved sales of over 140 million tons of LNG and LPG. The majority of these sales represent ex-ship deliveries made to Tokyo Electric Power Company (TEPCO) under a long-term sales and purchase agreement (SPA). A new SPA with TEPCO was signed in 1993, extending the contract for a future period of 25 years until 2019. Master agreements and SPAs have also been signed with Shell, BP, SCMS, TOTAL, Gas Natural, IBERDROLA, Qatar Gas and KOGAS.
ADGAS continues to build its impeccable safety record, setting high standards and remaining dedicated to achieving and surpassing its targets. As of September 2007, ADGAS and its contractors have achieved over 30 million consecutive man-hours without any Lost Time Injury (LTI).
GASCO
In 2001, Abu Dhabi Gas Industries Ltd (GASCO), incorporated in 1978 for processing onshore gas directly associated with oil production, was merged with Abu Dhabi Gas Company (ATHEER), established in 1999 to handle ADNOC’s sole risk onshore gas operations. This successful merger led to the creation of one of the largest gas processing companies in the world. The process of fully integrating the onshore gas operations will be continued in 2004, with the transfer to GASCO of the Asab gas plant operations currently handled by Abu Dhabi Company for Onshore Oil Operations (ADCO).
Development projects completed by GASCO during the last five years include AGD-I and OGD-II, which have already been described in the New Gas Developments section of this report. In addition, GASCO completed the installation of a new state-of the- art digital control system at the Ruwais plant, which was carried out on live installations without a single shutdown. A major upgrade of the production facilities at the Ruwais plant was also carried out, increasing production by 15 percent, and enabling the supply of ethane stock to the Borouge petrochemicals plant.
Ongoing and future developments include AGD-II and OGD-III (see New Gas Developments section of this report), together with the Ruwais Tr-III project. Tr-III involves the installation of a third fractionation train at the Ruwais plant to accommodate processing of additional NGL from AGD-II and OGDIII. The new train will have an NGL fractionation capacity of 24,400 TPD, effectively doubling current capacity. A new processing train will also be installed at the Habshan gas complex, with completion due by 2008.
Other developments include ethane recovery maximisation at Habshan; the Habshan-Ruwais liquid sulphur pipeline; Bu Hasa facilities upgrade and integrated control systems (HICS) project; Asab-Bab integrated control systems (ABICS) project phase; phase 2 of the gas supply to Dubai; and the offshore associated gas project.
PETROCHEMICALS
One of the dominant industries of the developed world, petrochemicals is a driving force for economic growth and industrialisation in developing countries. This is particularly the case in the Arabian Gulf, where there are abundant supplies of oil and gas. In Abu Dhabi, ADNOC’s fast-growing petrochemicals activities include the production of ammonia and urea, as well as polyethylene. These activities are helping to diversify the Emirate’s economic base, creating employment opportunities for UAE nationals, and supporting the Government’s privatisation policies by promoting downstream industry linkages.
FERTIL
Incorporated in 1980 as a joint venture between ADNOC and Total-CFP, FERTIL was the group’s first petrochemicals venture, starting commercial production in 1983. The complex consists of a 1,050 MT/day ammonia plant and a 1,500 MT/day urea plant.
FERTIL currently exports approximately 90,000 tons of liquid ammonia, and more than 645,000 tons of urea (bulk and bagged) every year. The plants have consistently operated above designated capabilities, and a feasibility study for expansion of the complex is currently being carried out.
In 2003, FERTIL completed 20 years of operations and 10 years without a Lost Time Incident (LTI), and again received the RoSPA Award for its excellent occupational safety record. In line with its business development strategy, FERTIL signed a Memorandum of Understanding with Total in 2003 for a project to manufacture 50,000 tons per annum of melamine, based on urea produced from existing facilities. Melamine production will add significant value to the urea feedstock. The project is expected to be commissioned in early 2007.
In 2001, a 4-bar absorber project was implemented to reduce ammonia and carbon dioxide emissions, and increase their availability for enhancing urea production. This is now showing economic benefits of US$ 0.5 million per year, with the payback period expected to be less than three years.
BOROUGE
Part of ADNOC’s petrochemicals diversification strategy, Abu Dhabi Polymers Company (Borouge) is a joint venture between ADNOC and Borealis, Europe’s leading producer of polyolefins.
The US$ 1.2 billion complex in Ruwais was commissioned in 2001, and includes a 600,000 TPA ethane cracker and two 225,000 TPA polyethylene plants capable of swing production of bimodal linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE). The first shipments of liquid ethylene and polyethylene took place in 2002. The complex incorporates Borealis state-of-the art proprietary Borstar technology. The polyethylene grades produced are substantially stronger, and also more easily and economically processed than conventional materials. Borouge’s products are used for the manufacture of plastic film and moulded packaging for industries such as pharmaceuticals, food and beverages, cosmetics and chemicals. They are also suitable for the manufacture of highpressure pipes used in agriculture, mining, water, gas and sewage distribution, as well as coating for steel pipelines.
Borouge has established an extensive sales and marketing network. Offices are located in Abu Dhabi, Singapore, Hong Kong, Beijing, Shanghai, Mumbai and Beirut, together with representatives in Australia, New Zealand, Egypt, Pakistan, Taiwan and Thailand. Borouge and Borealis combine sales and marketing activities in Middle East and Asia Pacific, while Borouge now oversees the marketing of the entire Borealis range of polyolefins in the region.
Borouge is currently considering two major expansion projects. Borouge Step II Project involves de-bottlenecking of existing polyethylene facilities to increase total production capacity from 450 KTA to 600 KTA, in order to utilise surplus ethylene that is presently exported. The project is expected to be completed in early 2005.
Borouge Step III Project includes a new ethane cracker with an annual capacity of 1.4 million tons of ethylene. The ethane feedstock for the new cracker will come from ADNOC’s Onshore Gas Development (OGD) project, which is expected to be commissioned in 2007. The production of propylene based on ethylene using dimerisation and metathesis processes is being considered, along with the construction of new polyethylene and polypropylene plants. Other product lines under consideration include vinyl chloride monomer (VCM), polyvinyl chloride (PVC), linear alpha olefins, and para-xylene production through naphtha reforming.
TRANSPORTATION
Pipelines
The main oil and gas producing fields of ADNOC are linked by over 800 kilometers of pipeline, which are constantly upgraded and expanded to keep pace with increased production and supply demand. A current major development is the TAKREER inter-refineries pipeline project for product transfers between Ruwais, UAN and the ADNOC Distribution depot at Mussafah, which forms a critical element of the OGD-II and AGD-III projects. Other recent projects include the commissioning of the new Bab- Umm Al Nar crude oil pipeline, and the main oil line from Total ABK to Das Island. In addition, the Front-end Engineering & Design (FEED) project has been completed for the proposed Ruwais-Shweihat pipeline to supply 670 MMSCFD of gas to the new power and desalination plants of Abu Dhabi Water & Electricity Company.
In 2001, the new 48 inch, 112 kilometer Maqta’a-Jebel Ali gas pipeline was commissioned to supply gas to the Dubai Supply Authority (DUSUP). The pipeline has been designed to transport up to 910 million SCFD of gas. Also in 2001, the FEED project for the new Habshan-Ruwais liquid sulphur pipeline commenced, with commissioning expected in early 2004. This pipeline will provide a safer and more environmentally friendly alternative to road transport of liquid sulphur. Other pipeline network projects completed during the last five years include the FOD multi-products and LPG pipelines to Mussafah; the gas pipeline to Zayed Military City; the gas pipeline to supply the steel mill and other consumers in Abu Dhabi Industrial City; and the commissioning of the 30- inch Zakum-Das Island main oil line.
Tankers
ADNOC has two maritime companies that specialize in the transportation of crude oil, refined products and liquefied natural gas.
Crude Oil and Refined Products
ADNATCO specializes in the transportation of crude oil, refined products, petrochemicals and molten sulphur, both for ADNOC and other major oil companies. The Company also provides logistical support and advice on shipping, and manages the Group’s offshore bunker supply ships. In 2001, the Company diversified into dry cargo transportation using Ro-Ro ships to transport polyethylene for Borouge.
In 2002, ADNATCO achieved ISO 14001 environmental preservation accreditation, while in 2003, an e-management project was launched for the whole fleet. This is designed to reduce costs, save time and space, improve performance and protect the environment. The same year, 15 UAE national cadets were selected to study maritime science and then join the ADNATCO fleet.
Liquefied Natural Gas
NGSCO (NATIONAL GAS SHIPPING COMPANY) is the demise owner and operator of eight specially constructed LNG tankers, and is considered one of the largest gas shipping companies in the world. The capacity of each vessel is 137,500 cubic metres (62,000 metric tons), and they are among the largest and most technologically advanced in the world.
In 1999, NGSCO became one of the first shipping companies in the world to achieve ISO 14001 environmental preservation accreditation, having previously achieved ISO 9002 certification in 1997.
Downstream ADNOC Group Companies:
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