Business & Finance Club Magazine - industrial Sector - Abu Dhabi: Abu Dhabi-based polymer producer Borouge said it had awarded three major engineering, procurement and construction (EPC) contracts collectively valued at about $2.6 billion (Dh9.54 billion) for its Borouge III expansion project in Ruwais.

"The contracts signed today will help Borouge process ethylene into polyethylene and propylene into polypropylene," a Borouge spokesperson said.

"By the end of 2013, when the production starts, Borouge will be able to make up to 4.5 million tonnes a year of polyethylene and polypropylene for the Middle East and Asian consumption. Borouge is contributing to the downstream diversification of the UAE economy."

The current capacity of Borouge I plant, which started production in 2001, is 600,000 tonnes of polyethylene. Borouge is currently expanding its capacity to two million tonnes a year under the name of Borouge II, which will enable the company to produce polypropylene as well, from the second half of this year.

With the completion of the multi-billion dollar Borouge II and Borouge III projects, Abu Dhabi is poised to become an important player in the global petrochemical market.

Lump sum

A contract worth $1.255 billion for the construction of two Borstar enhanced polyethylene and two Borstar enhanced polypropylene units, as well as a contract worth $400 million for the construction of a 350,000 tonnes per year low density polyethylene (LDPE) unit, was awarded to the joint venture consortium Tecnimont of Italy and Samsung Engineering of South Korea, on a lump sum turnkey basis. The annual capacity of the polyethylene units is 1.08 million tonnes per year and the polypropylene units 960,000 tonnes per year.

In addition, a contract worth $935 million for the utilities and off-site facilities for the expanded plant was awarded to Hyundai Engineering and Construction of South Korea.

Borouge said these contracts represent an important milestone in the fulfilment of its growth strategy in the Middle East and Asia.

"The investment in LDPE production spearheads the company's ability to manufacture innovative solutions for the global wire and cable market in addition to the pipe, automotive and advanced packaging markets," it added.

Earlier this week, Borouge awarded a $1.075 billion contract to Germany's Linde Engineering for the construction of the Borouge III ethane cracker which will have a capacity to produce 1.5 million tons of ethylene a year. The site preparation is being executed by Al Asab General Transportations and Contracting Establishment.

Borouge is a joint venture between the Abu Dhabi National Oil Company (Adnoc) and Borealis, a leading provider of chemical and innovative plastics solutions.

• 600,000 current polyethylene capacity in tonnes
• 2m tonnes polyethylene and polypropylene
• 4.5m tonnes capacity with Borouge III at end 2013