ADNOC Targets Rapidly Growing Market For Polymers From China’s Auto and Infrastructure Sectors

Marine
Abu Dhabi, UAE – May 11, 2017: The Abu Dhabi National Oil Company (ADNOC) is targeting rapid growth in demand for its high-grade polymer products from China’s automotive industry and the country’s investment in gas and electricity infrastructure.

ADNOC is focused on market expansion in China and Asia, where demand for petrochemicals and plastics, including light-weight automotive components, essential utility piping and cable insulation, is forecast to double by 2040.

The push is part of ADNOC’s overall 2030 strategy aimed at a more profitable upstream, more valuable downstream, more sustainable, economic gas supply and world class talent. Expansion in China and Asia is a critical component of this strategy, particularly when it comes to maximizing value from downstream operations.

In response to Asia’s increasing demand for higher value products, ADNOC will ramp up its petrochemical capacity from 4.5 million tons per annum (mtpa) in 2016 to 11.4 mtpa by 2025. 

H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of ADNOC said: “As we look toward smart growth across our businesses, we see China and the wider Asia region as major opportunities for downstream growth. Global economic expansion is shifting from West to East and ADNOC is ideally positioned geographically to tap markets, which, by 2040, will account for almost two-thirds of the world’s GDP.”

H.E. Dr Al Jaber made his comments during a visit to Shanghai, where he toured the Asia North Sales and Marketing head office and Compound Manufacturing Plant, of Borouge, a joint venture between ADNOC and Borealis. The plant produces up to 90,000 tonnes of value added compounds per annum for China’s automotive industry. ADNOC’s Group CEO also visited Borouge’s Shanghai Application Centre, which works in close cooperation with the company’s innovation centre in Abu Dhabi. The centre conducts research and development on low emission polypropylene compounds to replace metals, aluminium and engineered plastics in cars and other vehicles.

The joint venture is an example of ADNOC’s ability to leverage partnerships that create value by integrating technology, talent and market access. Since opening its Chinese operations in 2009, Borouge has achieved a four-fold increase in trading volume of its products in Asia. China is Borouge’s largest export customer in Asia, accounting for 1.2 million tons per year of polyolefins, equal to one third of its sales worldwide. In addition to the energy and automotive sectors, ADNOC, in conjunction with Borouge, sees market opportunities in, agricultural film, and the rigid and flexible packaging sectors in China’s western region, where industrial cities recorded double-digit GDP growth in 2016. As well as its operations in Shanghai, Borouge has offices in Beijing and Guangzhou, to serve the various geographical markets in China. It also has five warehouses at Nansha, Shanghai, Ningbo, Tianjin and Luzhou.

Meanwhile, earlier this year, ADNOC strengthened its relationship with China’s hydrocarbons sector, when it finalised oil concession partnership agreements with the China National Petroleum Company (CNPC) and CEFC China Energy Company Limited (CEFC China).

“As ADNOC pursues its 2030 Strategy, we are fully aligning our upstream and downstream operations with the varied market opportunities in this region to maximize value across our businesses. We are committed to ensuring security of oil supply in Asia, where demand for energy is growing, and we are responding to the accelerated need for higher value products throughout the region by focusing on petrochemical expansion.  Across our businesses, we will seek out partners who can best complement our resources, capabilities and strengths with technology, know-how and market access,” H.E. Dr Al Jaber added.