GENTLY DOWN THE STREAM

Abu Dhabi 2016 | INDUSTRY & AGRICULTURE | FOCUS: DOWNSTREAM

The mantra of the economy is diversification away from reliance on oil revenues, but extending the value added chain within the hydrocarbon sector provides guaranteed feedstock for industry to develop.

The UAE is the world's third-largest exporter of crude oil by value, with the sixth and fifth largest proven reserves of oil and gas respectively, which provide around AED500 billion every year. Hydrocarbons account for 51% of the Emirate's GDP and remain a crucial part of the economic diversification policy. The value chain has been lengthened with the creation and expansion of various ADNOC subsidiaries, in a fairly logical development of the industry due to the huge amount of natural resources and feedstock with which to work.

Perhaps the most interesting development is the Shah gas field under the auspices of the Al Hosn Gas project; although the reserve was located in 1965, production only began in January 2015 due to the high levels of hydrogen sulphide. The plant which now processes 1 billion standard cubic feet per day, with half of that production fit for domestic production of energy. Only half the gas is suitable for use in gas fired power plants because of its sour nature.

As a byproduct, 10,000 tons of sulphur are produced daily which is granulated on site and travels along Stage I of Etihad Rail from the Shah and Habshan fields to Ruwais where it is shipped overseas for industrial uses to East and Southeast Asian markets as well as North Africa, Morocco, and Jordan. Takreer exports around 22,000 tons of sulphur daily, equating to 8Mt annually.

Takreer is a key entity for the downstream sector – which has the capacity to process over 900,000bpd. The company primarily produces jet fuel, naptha and propylene. Naptha has a number of industrial uses, but is primarily used as a feedstock for the petrochemical industries, which has lead to Takreer's increased synergy with Abu Dhabi Polymers Company (Borouge) whose by-products are then re-sold back to Takreer. Synergy is a typical attribute of the Abu Dhabi economy, creating locality and easy transfer of goods, feedstock and supplies between companies. Through this businesses pass on savings to each other while also providing steady revenue.

Along with their recently fully commissioned expansion, which increased production from 500,000bpd, Takreer has introduced their Carbon Black Delayed Coker (CBDC). This has given the company scope to convert heavy oil in to products – calcined coke can be used for the local aluminum smelting, which forms a huge part of the industry sector in the UAE. Base oils can also be made in to lubricants. The facilities now have the ability to reach more than 14 on the Nelson Complexity Index (NCI) which provide Takreer with a leading edge in the market.

After the Year of Innovation in 2015, Borouge lead the way for the UAE market and currently around 15% of their sales come from products that have been developed at their $70 million facility. Over the next five years the company is expected to file 750 patents, while new products will account for 1 million tons, equating to 25% of total sales. Currently they account for around 30% of all patents that have been filed by the UAE over the past few years.

The polyolefin company, which produces a wide array of plastics from crude oil, had production capacity ramped up from 2Mt per annum to 4.5Mt over the course of 2015. This will be realized gradually through 2016. The “innovative plastic solutions" company creates products for the healthcare sector as well as for food packaging. The company is one of the largest customers for Khalifa Port and the two have an agreement for the port to operate a packaging facility for the polymer producer to enhance the supply chain. The Middle East polymers market is forecasted to grow 7.2Mt per year, higher than the 4.9Mt, which is the global average.