Borouge Plc and ADNOC Logistics & Services Plc said they have entered into a 15-year strategic partnership that will support a significant increase in the production and export of petrochemicals from the United Arab Emirates.
The service agreement will deliver a minimum guaranteed value of $531 million (AED 1.95 billion), “supporting the next phase of Borouge’s accelerated growth plans, driving operational cost savings over the full contract term, realizing more than $50 million in cost savings and efficiencies in the first five years, and enhancing the company’s supply chain network,” the two companies said in a news release.
The agreement covers port management, container handling, and feeder container ship services for the Borouge Container Terminal in Al Ruwais Industrial City, Abu Dhabi, according to the news release.
ADNOC L&S will manage the transportation of up to 70 percent of Borouge’s annual production, which will increase significantly following the completion of the Borouge 4 plant expansion. ADNOC L&S will deploy a minimum of two dedicated container feeder ships to transport Borouge’s products from Al Ruwais to the deepwater ports of Jebel Ali in Dubai and Khalifa Port in Abu Dhabi, the release said.
Borouge CEO Hazeem Sultan Al Suwaidi said, “This agreement builds on our longstanding collaboration with ADNOC L&S, a partnership that has been instrumental in meeting the evolving needs of our customers in high-growth markets. It brings significant benefits to Borouge; driving substantial operational cost savings and enhancing our Logistics Variable Cost, as well as complementing our existing rail operations and expanding the flexibility of our supply chain network”.
“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,” Al Suwaidi added.
With Borouge planning to ramp up production capacity by 1.4 million metric tons per annum by the end of 2026 through its Borouge 4 mega project, the company said it will become the world’s largest single-site polyolefin complex.
The partnership “will further enhance Borouge’s supply chain efficiency as well as reinforcing ADNOC L&S’ commitment to delivering innovative, integrated supply chain solutions that enhance trade, strengthen industrial resilience, and support the UAE’s vision for economic diversification and global leadership,” according to the release.
ADNOC L&S CEO Abdulkareem Al Masabi said, “This comprehensive container terminal agreement marks a major milestone in our successful partnership with Borouge, delivering on ADNOC L&S’ strategy to provide seamless, end-to-end logistics solutions that power the UAE’s industrial growth and export ambitions. By leveraging our extensive maritime and logistics expertise, we are ensuring that Borouge’s world-class petrochemical products reach global markets efficiently and competitively”.
ADNOC L&S said its integrated logistics capabilities include managing container terminal operations, feeder services, and logistics solutions to meet increasing global demand. The agreement comes as ADNOC L&S continues to grow its international presence, providing comprehensive logistics solutions for global customers across various sectors.
Borouge was established in 1998 through a strategic partnership between ADNOC and Borealis. The company was formed to build and operate a petrochemical complex in Al Ruwais Industrial City, United Arab Emirates, with a sales and marketing business in Singapore, according to the company’s website.
To contact the author, email rocky.teodoro@rigzone.com
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