ADNOC, Borealis join BASF-Adani for $4 billion chemical complex in Gujarat

Mumbai: Abu Dhabi National Oil Company (ADNOC), Borealis AG, BASF SE (BASF) and Adani Group said they have signed an agreement to engage in a joint feasibility study to evaluate a collaboration for a chemical complex at Mundra in Gujarat with an investment of up to $4 billion.

The partners aim to finalise the joint feasibility study by the end of Q1 2020 and production is intended to commence in 2024, a release said on Thursday.

The initial investment of the chemical complex in Mundra is estimated to be up to $4 billion. This memorandum of understanding (MoU) is the next step of BASF's and Adani's investment plans as announced in January 2019, a release said here.

With the inclusion of ADNOC and Borealis as potential partners, the parties are examining various structuring options for the chemical complex that will leverage the technical, financial and operational strengths of each company. The collaboration includes evaluating a joint world- scale propane dehydrogenation (PDH) plant to produce propylene based on propane feedstock to be supplied by ADNOC.

Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis, based on proprietary Borealis Borstar technology.

The PP complex will be the first overseas production joint investment by ADNOC and Borealis as part of a strategic framework with their current joint venture Borouge.

Further, propylene will be the key raw material for the previously announced acrylics value chain complex comprising glacial acrylic acid (GAA), Oxo-C4 (butanols and 2- ethylhexanol), butyl acrylate (BA) and potentially other downstream products as part of a joint venture of BASF and Adani, in which BASF holds a majority.

The products from the chemical complex will mainly be for the Indian market, serving a wide range of local industries, including construction, automotive and coatings.

The chemical complex is intended to be entirely supplied from renewable energy resources and the partners are evaluating co-investment in wind and solar park.

"BASF will play a key role in driving this joint collaboration which is also pioneering in terms of sustainability. We look forward to working together with our partners in establishing a chemical cluster in Mundra and to supplying the Indian market with high-quality downstream products," BASF SE chairman of the board of executive directors Martin Brudermuller said.