Abu Dhabi's Takreer to Invest $10 Billion to Expand Refineries and Integrate Petrochemical Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Abu Dhabi Oil Refining Company (Takreer), a subsidiary of Abu Dhabi National Oil Company (ADNOC) (Abu Dhabi, United Arab Emirates), is continuing with its strategy of expanding refineries and optimizing the integration of the petrochemical industry by investing $10 billion in three large expansion projects.

ADNOC aims to develop the downstream industry in the United Arab Emirates (UAE) in order to meet future requirements for oil and gas, and these latest projects fit into the expansion framework for the Petroleum Refining Industry.

Takreer is set to invest up to $9.6 billion in the giant Ruwais Refinery Expansion project and has signed agreements with four South Korean companies to expand the refinery's capacity. The agreements cover the five main engineering, procurement, construction (EPC) and commissioning packages for the project.

Private engineering company SK Engineering and Construction Company Limited (Seoul, South Korea) has an agreement to provide the crude oil distillation and associated downstream units, while GS Engineering and Construction Corporation (SEO:006360) (Seoul, South Korea) has been awarded two of the five packages: the residue fluid catalytic cracking unit and the marine facilities package.

Samsung Engineering Company Limited (SEO:028050) (Seoul) will take care of the offsite and utilities package. The tankage and associated interconnecting piping package will be the responsibility of Daewoo Engineering and Construction Company Limited (SEO:047040) (Seoul).

GS Engineering has also been awarded an EPC contract for the inter-refinery pipelines project. The contract, worth $623 million, is aimed at linking the Abu Dhabi refineries with various terminals through 955 kilometers of pipelines ranging in diameter from 10 to 28 inches.

The final project of the three large expansion projects is diversification of the Ruwais refinery to enable the production of both Group II and high-value Group III base oils. The EPC contract for the Group III base oil production facilities has been awarded to Hyundai Engineering and Construction Company (SEO:000720) (Seoul) and is worth a reported $463 million.

ADNOC's integration strategy is aimed at serving three main objectives. First, the company wants to satisfy the growing local demand for high-quality petroleum products and increase its presence in the international marketplace for finished products while meeting strict specifications.

Secondly, ADNOC wishes to integrate the refining processes with the petrochemical industry and supply 1.1 million tons of propylene each year to the Borouge olefin complex at Ruwais. The Abu Dhabi Polymers Company Limited (Borouge) (Abu Dhabi) is a joint venture company of ADNOC (60%) and Borealis AG (Vienna, Austria) (40%).

The propylene supply to Borouge will result in investment and operating cost savings that will benefit both companies.

The third objective for ADNOC is to develop the expertise of UAE citizens in both project development and subsequent plant operations. ADNOC hopes that young local employees will learn techniques and technologies through interaction with the South Korean companies.

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