Abu Dhabi National Oil Company (Adnoc) and OMV Aktiengesellschaft (OMV) have announced strong progress towards the formation of Borouge Group International, including the signing of an asset usage agreement for the Borouge 4 (B4), an integrated polyolefins production complex in Abu Dhabi.
Last year Adnoc and OMV had signed a deal under which Borouge and leading Austria-based chemical group Borealis will merge to form Borouge Group International AG (BGI).
Adnoc concurrently agreed to acquire Nova Chemicals Corp, a Calgary-based subsidiary of Emirati sovereign investor Mubadala Investment Company, to be transferred to the new JV.
According to Adnoc, the formation of Borouge Group International AG is progressing according to plan, with the transactions close expected by the end of March 2026, subject to customary conditions.
B4 is a new integrated polyolefins production complex with a 1.5 million tonnes ethane cracker and 1.4 million tonnes of polyethylene capacity, with the first plant expected to startup this quarter.
Boasting the latest, proprietary Borstar technology to produce advanced, high-premium polyethylene, B4 is 70% owned by Adnoc and 30% by OMV, and forms part of the Borouge production site, set to become the world’s largest single-site polyolefins complex.
The Agreement enables Borouge and subsequently Borouge Group International to operate and market the volumes of B4 in return for an at-cost asset utilisation fee. It will provide both entities with financial flexibility while delivering an estimated $400 million in cumulative net profit over the next three years, representing approximately 10% annual accretion to Borouge earnings post ramp up.
It is anticipated that the Agreement for B4 will be maintained until Borouge Group International AG acquires the asset from its current owners, which is currently not expected before 2029, thereby providing flexibility on the timing of future capital outlays.
B4 operations are expected to ramp up progressively throughout 2026 and with the signing of the Agreement, Borouge Group International AG will have access to 13.6 million tonnes of nameplate production capacity across Europe, the Middle East and North America, positioning the company as the world’s fourth largest polyolefins producer. The combined entity is expected to continue delivering a best-in-class margin profile and generate significant synergies.-TradeArabia News Service