Abu Dhabi chemicals maker Borouge has awarded a Dh1.95 billion ($531 million) contract to Adnoc Logistics and Services aimed at streamlining maritime deliveries and boosting the UAE's petrochemical exports.
The 15-year partnership will see Adnoc L&S manage the transportation of up to 70 per cent of Borouge’s annual production, to Khalifa Port in Abu Dhabi and Jebel Ali in Dubai, the companies said on Wednesday.
A minimum of two vessels will be dedicated for the operations, they said.
Borouge's petrochemical output capacity is expected to increase by 1.4 million tonnes per year after the expansion at its Borouge 4 plant is completed, which would make it the world’s largest single-site polyolefin complex, it said.
Polyolefins, known for their flexibility and resistance, are a large group of polymers used in major sectors such as textiles, packaging, automotive, construction and consumer goods.
The partnership will also support the next phase of Borouge's growth strategy, underpinned by a focus on optimising operations, the companies said. The contract is expected to drive more than $50 million in cost savings in the first five years, they added.
The move is the latest in long-standing co-operation between Borouge and Adnoc L&S “that has been instrumental in meeting the evolving needs of our customers in high-growth markets”, said Hazeem Al Suwaidi, chief executive of Borouge.
“It brings significant benefits to Borouge … with the rapid increase in our production capacity, we are advancing our capabilities in delivering differentiated products and solutions efficiently, while keeping pace with rising global demand,” he said.
The energy and industrial sectors are among the key pillars of UAE's economy and companies in the sector have continued to boost investments and partnerships to drive efficiencies and improve their bottom lines.
Abu Dhabi has been at the forefront of this strategy, with its vast resources, stable of companies and commitment to drive economic growth through its various industrial programmes.
The latest collaboration aligns with the Adnoc L&S's strategy to provide “seamless, end-to-end logistics solutions that power the UAE’s industrial growth and export ambitions”, said chief executive Abdulkareem Al Masabi.
“By leveraging our extensive maritime and logistics expertise, we are ensuring that Borouge’s world-class petrochemical products reach global markets efficiently and competitively,” Mr Al Masabi said.
Borouge, a joint venture between UAE state energy company Adnoc and Austrian chemicals producer Boreali, was established in 1998.
In May 2022, Borouge raised $2 billion through an initial public offering and was listed on the Abu Dhabi Securities Exchange. The IPO, which was about 42 times oversubscribed, was the largest listing in Abu Dhabi at the time.
After its listing, Borouge was included in the FTSE Global Equity Index Series, which is used by investors globally to guide asset-allocation decisions and support portfolio construction.
Adnoc L&S delivers dry bulk and energy products to more than 100 customers in about 50 countries through its three business units, including integrated logistics, shipping and marine services.
The company made its debut on the Abu Dhabi bourse in June 2023 after parent company Adnoc raised about Dh2.83 billion from the sale of a 19 per cent stake in the subsidiary.
