Under a framework agreement, ADNOC and Wanhua Chemical plan to create downstream joint ventures in the UAE and China
Image: ADNOC headquarters in Abu Dhabi. Photo: courtesy of Aidas U./Wikimedia Commons
The Abu Dhabi National Oil Company (ADNOC) and Wanhua Chemical Group have entered into a collaboration worth up to $12bn (£9.65bn) pertaining to the downstream sector in the UAE and China.
In this regard, the companies have signed a partnership framework agreement to form joint ventures for exploring and developing new downstream opportunities in the two countries.
In the UAE, their joint venture will be engaged on producing polyurethanes value chain chemicals and other downstream derivatives at ADNOC’s integrated refining petrochemicals facility in Ruwais, Abu Dhabi.
The Chinese joint venture, on the other hand, will explore investment opportunities for the development and production of petrochemical and derivative products in Yantai, Shandong Province.
ADNOC Group CEO Sultan Ahmed Al Jaber said: “The bilateral nature of our planned joint cooperation into both the UAE and China is unique, as it will allow the combined platforms to benefit from ADNOC’s competitive feedstock availability in Abu Dhabi, as well as capture the promising growth opportunities in China.
“It also serves two key strategic objectives for ADNOC. First it demonstrates our ongoing commitment to China, and second, it represents another milestone in our journey to grow and diversify ADNOC’s downstream portfolio and establish Ruwais as a global refining and petrochemicals hub.”
Joint ventures to boost feedstock supplies from ADNOC to Wanhua
The two joint ventures are expected to produce increased feedstock supplies from ADNOC to Wanhua and further consolidate the existing long-term relationship between the firms. The opportunities will enable the firms to combine and leverage their position in the market and expertise in marketing, technology, and competitive feedstocks.
The combination of ADNOC’s position in the production of polyolefins and Wanhua Chemical’s expertise in specialty materials markets will help the partners to provide a much more diversified offering to customers in various end-application segments.
The two firms also inked a shipping joint venture agreement, which consolidates on the 10-year LPG supply contract signed last November.
As per the terms of the joint venture contractual agreement, ADNOC Logistics & Services (ADNOC L&S) and Wanhua Chemical will set up a LPG shipping joint venture. The JV will be engaged in the operation of two very large gas carriers vessels (VLGC vessels).
ADNOC said that the agreements further demonstrate its goal to expand downstream portfolio and global market access as part of its 2030 growth strategy.