New Delhi: Billionaire Mukesh Ambani's Reliance Industries has signed a pact to invest an undisclosed amount in a giant petrochemical hub being built in the UAE. The oil-to-telecom conglomerate will join the recently-formed Ta'ziz joint venture of Abu Dhabi state energy giant Adnoc and state holding company ADQ for developing the Ruwais Derivatives Park in western Abu Dhabi.
A company statement said an agreement has been signed for Reliance to invest in the project but did not give details. Unconfirmed reports put the investment at about USD 1.5 billion.
Ta'ziz is in discussions with potential partners at the park, which is slated to start operations in 2025. It is hoping to attract around USD 5 billion into Ruwais. Abu Dhabi National Oil Co (Adnoc), which pumps most of the UAE's 3 million barrels per day of crude oil, plans to spend USD 45 billion with partners to develop its downstream operations in Ruwais. These projects include adding refining and petrochemical capacity.
The oil refinery planned at Ruwais is being designed to be integrated with the petrochemical project. "Adnoc today announced that Reliance has signed an agreement to join a new world-scale Chlor-alkali, ethylene dichloride and polyvinyl chloride (PVC) production facility at Ta'ziz in Ruwais, Abu Dhabi," the statement said.
The agreement, it said, capitalises on the growing demand for these critical industrial raw materials and leverages the strengths of the two firms as global industrial and energy leaders. Reliance operates the world's largest refining complex at Jamnagar in Gujarat. It also has petrochemical plants. Besides producing oil, Adnoc too has similar operations.
Under the terms of the agreement, Ta'ziz and Reliance will construct an integrated plant with a capacity to produce 940,000 tonnes of Chlor-alkali, 1.1 million tonnes of ethylene dichloride and 360,000 tonnes of PVC annually. While Chlor-alkali is used in water treatment and in the manufacturing of textiles and metals, ethylene dichloride (EDC) is used for producing polyvinyl chloride (PVC).
PVC is commonly used in pipes, fittings, profiles, tubes, windows, doors, sidings, wire, cable, film, sheet, and flooring. Ambani had last week said a deal to sell 20 per cent stake in Reliance's oil-to-chemical business to Saudi Aramco is likely to conclude by year-end. And as a precursor to the deal, Aramco Chairman Yasir Al-Rumayyan will join Reliance's board as an independent director.
"His joining our board is also the beginning of internationalization of Reliance," Ambani had said at the company's annual shareholders meeting. "You will hear more about our international plans in the times to come." The company on Tuesday said the pact continues the momentum of Adnoc's downstream and industry growth plans in line with its 2030 strategy. Petrochemical, refining and gas growth projects are currently under construction, with a number of projects also recently completed across the downstream and industry portfolio.
"Adnoc is gearing up for growth with Ta'ziz, the world-scale chemicals production hub and industrial ecosystem based in Ruwais, with investment in excess of AED 18 billion and a number of further growth projects in the downstream and industry sector," the statement said. Since 2018, Adnoc has attracted significant foreign direct investment from international partners in the downstream business, including refining, fertilisers and gas pipelines.
Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO, said: "We are delighted to attract an investor of Reliance's caliber to partner with ADNOC and ADQ in accelerating growth at Ta'ziz. This agreement is a significant milestone, as we continue to grow a globally competitive industrial ecosystem and highly attractive investor value proposition." In line with the 2030 strategy, "we look forward to creating further opportunities across the entire Ta'ziz ecosystem for the next generation of local industry. The domestic production of critical industrial raw materials strengthens our supply chains, drives In-Country Value and accelerates the UAE's economic diversification," he said. Welcoming this initiative, Reliance Chairman and Managing Director Mukesh Ambani, said: "This important milestone further bolsters our long-standing relationship with Adnoc." "The project will manufacture ethylene dichloride, a key building block for the production of PVC in India," he said. "This is a significant step in globalizing Reliance's operations, and we are proud to partner with Adnoc in this important project for the region." .
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