Adnoc and Borealis consider Borouge listing

Abu Dhabi National Oil Company (Adnoc) and Austria’s Borealis AG are considering a potential initial public offering (IPO) of a minority stake in their joint venture business Borouge.

Headquartered in Abu Dhabi, Borouge is a leading provider of innovative, value creating plastics solutions.

“Adnoc and Borealis will provide further material updates as and when appropriate,” according to a statement issued by Adnoc on Tuesday.

Last year, Adnoc listed its drilling business in Abu Dhabi’s largest IPO yet. Fertiglobe, a joint venture between Adnoc and chemical producer OCI, also had a market debut last year and Adnoc floated shares in its distribution business in 2017.

Adnoc’s fourth IPO

The potential IPO of Borouge would be Adnoc’s fourth stake sale of a unit.

The UAE fertilizer company Fertiglobe, in which Adnoc and Netherlands-listed chemicals company OCI have stakes, was listed on the Abu Dhabi Securities Exchange on October 27 after raising more than $795 million in an IPO. On Tuesday, the company reported that its fourth-quarter 2021 revenues increased 138 per cent to $1.184 billion, while adjusted EBITDA grew 347 per cent to $648 million compared to the same quarter of 2020.

“Full year 2021 revenues increased 113 per cent to $3,311 million and adjusted EBITDA increased 242 per cent to $1,551 million compared to 2020. Adjusted net income was $737 million in 2021, compared to $66 million in 2020,” Fertiglobe said on Tuesday.

Adnoc sold an 11 per cent stake in Adnoc Drilling in an IPO that raised $1.1 billion, with the unit starting to trade on the Abu Dhabi Securities Exchange on October 3. It sold a 10 per cent stake in fuel retailer Adnoc Distribution in 2017, raising $851 million.

Since 2019, Adnoc has been monetising its oil and gas assets as it seeks to unlock cash to fund strategic projects, which include increasing oil output capacity to five million barrels per day by 2030 from around the current four million barrels per day.

“Adnoc is forging ahead with an expansion of its hydrocarbons and low-carbon businesses under a plan to spend Dh466 billion ($127 billion) over 2022-26. The last five-year capex plan was for Dh448 billion ($122 billion),” according to S&P Global Platts.

JV on track

Adnoc and Borealis, which is 75 per cent-owned by OMV, have begun construction of a $6.2 billion expansion of the Borouge petrochemical plant, the biggest in the UAE, in the industrial city of Ruwais to produce 1.4 million metric tonnes per year of polyethylene.

“Expected to become operational in 2025, the Borouge 4 project includes construction of a 1.5 million metric tonnes ethane cracker and two polyethylene plants. It will make the site, which already has three units, the world’s largest single-site polyolefin complex at 6.4 million metric tonnes annually, the two companies said in November," according to S&P Global Platts.

Borouge 4 products will be mainly sold in Asia, the Middle East and some parts of Africa. Adnoc will supply feedstock for the Borouge 4 unit.

— muzaffarrizvi@khaleejtimes.com