Borouge and Fertil expansions are fuelling the country’s diversification efforts
The UAE needs to pump nearly $107 billion into energy projects over the next five years, second only to Saudi Arabia in the Middle East and North Africa (MENA), according to official Arab data.
Saudi Arabia, the largest Arab economy and world’s top oil exporter, maintained its rank as the largest energy investor in MENA as its capital requirements are estimated at about $165 billion during 2013-2017.
This means the UAE and Saudi Arabia account for almost 36.5% of MENA’s total energy investment requirements of around $740 billion during that period, showed the figures by the Saudi-based Arab Petroleum Investment Corp (Apicorp), an affiliate of the 10-nation Organization of Arab Petroleum Exporting Countries (OAPEC).
According to the report, energy projects in the region face many challenges, including rising costs and feedstock supply, mainly natural gas.
In terms of downstream projects, the UAE has not announced very many this year. But earlier this month, International Petroleum Investment Company (IPIC) said it is going ahead with the Fujairah Refinery which will create opportunities in Northern Emirates.
IPIC announced that they are proceeding with the implementation of a 200,000 bpd refinery in Fujairah, at an estimated cost of $3 billion.
MEED reported that Technip has won the FEED contract in August 2012.
The refinery will be located near the new Abu Dhabi crude oil pipeline Main Oil Terminal and
the UAE deep water export terminals in Fujairah, and will be designed to process UAE crudes such as Murban, Upper Zakum and Dubai.
HSBC has been confirmed as the financial adviser on the International Petroleum Investment Company project in Fujairah.
The refinery is expected to create more than 750 job opportunities out of which 375 to 400 will be for UAE Nationals, once it comes into operation.
The Project Management Consultancy (PMC) contract for the front end engineering and design phase of the Fujairah Refinery was awarded to Shaw Stone & Webster in April 2011.
The refinery will have the capability to meet its own power requirements, In addition, power
will be provided to the grid of the Northern Emirates.
Khadem Al Qubaisi commented: “This is an exciting opportunity to combine IPIC’s financial strength and experience of existing portfolio of companies in implementing this project.
The refinery project in addition to being of strategic importance will create social and economic benefits for Fujairah and other Northern Emirates as well as creating employment opportunities during the operational phase in the UAE.”
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With regards to operating refineries, the UAE has three – Ruwais and Um al-Nar operated by Abu Dhabi National Oil Company (ADNOC) subsidiary’s Takreer, and the third one is located in Jebel Ali free zone in Dubai and is operated by Emirates National Oil Company (ENOC).
The emirates of Sharjah and Fujairah also have refineries, each with a potential capacity of 80,000 barrels per day (bpd), but they have never been operational due to financial and technical problems.
Of the Takreer refineries, one is a small, hydro-skimming refinery complex at Umm Al Nar on the outskirts of Abu Dhabi that operates at 85,000-90,000 bpd and does not engage in conversion.
The second refinery is located in Ruwais. It operates at roughly 400,000 bpd. “Putting these together, our total refining capacity is up to 490,000 bpd,” said Jasem Ali Al Sayegh, general manager, Takreer.
The company is undergoing an expansion project to increase its refining capacity of crude oil to 415,000 bpd and nearly double its production of transportation fuels, gasoline, jet fuel and diesel by 2014.
The expansion of its Ruwais facility will boost Takreer’s overall refining capacity to nearly 1 million barrels of refined products per day.
The project is being developed in eight packages, including crude distillation and sulphur recovery facilities, a residue fluidized catalytic cracker, offsites and utilities, storage tanks, infrastructure work, marine works, and two separate packages for the site preparation works.
Essentially the new refinery facilities will process on-shore Murban crude oil.
Bottom of the barrel upgrading will be through a 127,000 bpd Atmospheric Residue Cracker, the world’s largest under design and selected to maximise propylene yields for downstream petrochemical projects. The total cost of the entire project of $10 billion has been financed by ADNOC.
In addition to Takreer in Abu Dhabi, Emirates National Oil Company (ENOC) is running a refinery in Dubai. ENOC owned by the Dubai government, plans to increase capacity at its Jebel Ali refinery by 20,000 barrels per day (bpd) to 140,000 bpd, the company said in June this year.
“The company is in the process of undertaking a refinery debottlenecking project which will increase its refining capacity to 140,000 bbls/day,” ENOC said in a statement. The so-called debottlenecking process involves capacity improvements that improve flow.
Jebel Ali port is Dubai’s main shipping hub, both for general cargo and for oil product shipments. Fuel retailer, ENOC is among the biggest oil storage owners at Jebel Ali, with its 1.2 million cubic meters of storage capacity. While Takreer receives feedstock from its parent company ADNOC, ENOC imports the feedstock it processes.
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Petrochemicals
Abu Dhabi’s vision for the petrochemical sector is to grow a world-class, global, integrated petrochemical base by means of a mixture of targeted acquisitions and organic growth.
In this regard, Abu Dhabi has launched Abu Dhabi National Chemicals Company (ChemaWEyaat), a company which targets the utilisation of LPG and naphtha, in contrast of Ruwais Fertilizer Company (Fertil) which is focusing on natural gas-derived products .
“We are trying to develop the world’s largest integrated petrochemicals complex,” says Ali al-Dhaheri, project co-ordination manager at ChemaWEyaat. “Our goal is to grow our business and to become one of the region’s top chemicals companies,” he added.
Fertil, the fertiliser arm of ADNOC has also embarked on a wave of expansions. It is currently doubling its capacity from 0.8 to 2 million tonness per year of Granulated Urea upon completion by the first quarter of 2013.
Borouge is expanding rapidly with Borouge 3 which will increase the production capacity of the plant to 4.5 million tonnes per year (t/y) by 2013, making it the largest integrated polyolefins site in the world.
Looking outside
The backbone of Abu Dhabi’s international ambition for the petrochemicals industry is the International Petroleum Investment Company (IPIC), which is responsible for all foreign investments in the oil and chemicals sector for Abu Dhabi. It also controls 40% of ChemaWEyat.
IPIC controls major stakes in different international companies, like Borealis. IPIC also acquired Canadian petrochemicals producer Nova Chemicals. These purchases are strategic acquisitions for the UAE petrochemicals industry.
Abu Dhabi has invested heavily in developing its own assets as well acquiring technology from established industry players to build a solid downstream base. There is a huge amount of work happening in the background to achieve self-sufficiency in finished goods and to establish the UAE as a chief petrochemical producer and exporter.
Fertil project on track
Total owns 33.33% of Ruwais Fertilizer Industries (FERTIL), which produces urea. A new project, launched in 2009, was agreed which would see a new granulated urea unit with a capacity of 3,500 tonnes per day, which is around 1.2 million tonnes per year.
According to Fertil, the project schedule outlined when the Process License, Engineering, Procurement and Construction contract was awarded to Samsung Engineering back in 2009 implies Mechanical Completion in November of this year, commercial production in January 2013, and provisional acceptance 26th March 2013.
Speaking with Refining & Petrochemicals Middle East in October, Jean-Luc Guiziou, President – Total UAE confirmed the project had progressed well, and is on schedule for completion in the coming months. “We are on track for the January 2013 target. This project is extremely exciting for us and will more than double the production capacity of Fertil overall,”
Keeping workers safe – Magus International
Magus International, which has successfully been keeping the Middle East workforce, especially in the oil and gas industry safe with protective clothing and equipment for over 30 years now, told Refining and Petrochemicals Middle East that the company enjoys operating out of the UAE.
Beginning with Jeddah Head Office in 1979, the company now have five branches across Saudi Arabia and three branches in the United Arab Emirates. Lisa Harwood, general manager UAE said, “Our UAE logistics and distribution centre allows us to support our other GCC operations.
The political stability, excellent infra structure and the efficient import and export procedures of the UAE enable us to respond quickly to customer demands.”
Harwood also said, with the economic downturn of other markets globally, the focus of Personal Protective Equipment (PPE) manufacturers has recently intensified in the ME region in terms of stock holding, technical support and product development.
This has lead to many of Magus’ suppliers setting up their regional offices in the UAE, enabling the company to benefit from their technical support located right at the doorstep.
