ADNOC, OMV advance formation of Borouge Group International

ADNOC and OMV Aktiengesellschaft signed an asset usage agreement for the Borouge 4 (B4) production complex, advancing the duo’s formation of Borouge Group International AG.

The formation of Borouge Group International AG, through the combination of Borouge Plc and Borealis, and acquisition of Nova Chemicals, is progressing according to plan, ADNOC said in a release Mar. 19. The deal is expected to close by the end of this month, subject to customary conditions.

B4 is a new integrated polyolefins production complex in Ruwais, about 250 km west of Abu Dhabi City, UAE, with a 1.5-million tonnes ethane cracker and 1.4 million tonnes of polyethylene capacity. The first plant is expected to start up this quarter.

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, ADNOC said.

The usage agreement enables Borouge Plc, and subsequently Borouge Group International AG, to operate and market the volumes of B4 in return for an at-cost asset utilization fee. It is expected to deliver an estimated US$400 million in cumulative net profit over the next 3 years, representing about 10% annual accretion to Borouge Plc earnings post ramp up.

The companies expect 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.

 B4 operations are expected to ramp up 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.