UAE's Adnoc, China's Wanhua Chemical enter $12bn collaboration
Multiple agreements signed that are set to benefit Adnoc and Wanhua, as well as their end-users in building and construction
The UAE’s Abu Dhabi National Oil Company (Adnoc) has signed a partnership framework agreement (PFA) with China’s Wanhua Chemical Group Co to explore opportunities in the UAE’s downstream sector – with a focus on Ruwais in Abu Dhabi and Yantai, Shadong in China – and a shipping joint venture agreement that builds on the 10-year liquefied petroleum gas supply contract signed between both entities in November 2018 in Shanghai, with the total value of their collaboration estimated at $12bn (AED44bn).
The agreements were signed by UAE Minister of State and Adnoc Group’s chief executive officer, Dr Sultan Ahmed Al Jaber, and Wanhua Chemical’s chairman, Zengtai Liao.
The JV contractual agreement will see Adnoc Logistics and Services establish an LPG shipping joint venture with Wanhua Chemical.
Also included in the JV is the operation of two very-large gas carrier (VLGC) vehicles.
Meanwhile, the PFA will see Adnoc and Wanhua explore and develop JV opportunities in the UAE and China – the Emirati component of the collaboration will focus on the production of downstream derivatives – including polyurethanes value chain chemicals – at Adnoc’s Ruwais integrated refining and petrochemicals complex.
The Chinese part of the JV will focus on exploring areas for development and production of petrochemical and derivatives in Yantai, located in China’s Shadong Province.
Adnoc and Wanhua Chemical’s collaboration is expected to create additional value in the downstream cluster of the new Ruwais Derivatives and Conversions Park.
Moreover, the cooperation – driven by Adnoc’s and Wanhua Chemical’s respective strengths in polyolefins and specialty materials – will also pave the way for both firms to deliver a wider offering to customers in segments such as building and construction, appliances, automotive, electronics, and furnishings.
Commenting on the agreements, Al Jaber said: “Building on our existing cooperation in the LPG space, the shipping JV will see Adnoc capture additional margins and further maximise value across our LPG portfolio.
“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.
“It demonstrates our ongoing commitment to China, and represents another milestone in our journey to grow and diversify Adnoc’s downstream portfolio and establish Ruwais as a global refining and petrochemicals hub,” Al Jaber added, according to UAE state news agency, Wam.