(WAM) — The Abu Dhabi National Oil Company, ADNOC, and holding company ADQ today signed a joint venture, JV, agreement to create a new investment platform to fund and oversee the development of industrial projects within the planned Ruwais Derivatives Park, a key enabler of ADNOC Downstream’s 2030 smart growth strategy and the UAE’s chemicals and industrial growth strategy.

The agreement was signed by Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, and Mohamed Hassan Alsuwaidi, CEO of ADQ.chemi

Under the terms of the agreement, ADNOC and ADQ will jointly evaluate and invest in anchor chemicals projects. ADNOC will hold a 60 percent majority equity stake in the JV with ADQ holding the remaining 40 percent. ADQ’s extensive portfolio, including local and international logistics and transport, power and water, industrial construction, and other essential infrastructure and enabling services, will complement ADNOC’s strong hydrocarbon feedstock position in Ruwais as well as its longstanding relationships with trusted international partners and investors.

These combined strengths will enhance the overall value proposition of the planned Ruwais Derivatives Park and, in turn, support the long-term growth of the broader Ruwais industrial complex and increased investment in the Emirate of Abu Dhabi.

The JV partners will conduct a comprehensive feasibility study to further develop identified projects in Ruwais and take forward those that show maximum potential for value creation. The JV plans to announce the results of this study before the end of 2020, including specific details on its selected target projects and the range of potential opportunities available for prospective investors and partners.

Dr. Al Jaber said, “The range, scale and calibre of resources ADNOC and ADQ each bring to this new chemicals investment platform underscore Abu Dhabi’s position as a leading global destination for international investors and industrial partners. In line with ADNOC’s commitment to smart, responsible investment in the current market environment, as well as our unwavering focus on stretching the margin of every barrel of oil produced, our partnership with ADQ will expand on existing efforts to maximise the value of our assets in Ruwais, to kickstart the development of the UAE’s downstream derivatives sector, support the transformation of Ruwais into a global hub for industry and attract additional foreign direct investment.”

Alsuwaidi said, “By partnering with ADNOC to faciliate the development of the investment platform in Ruwais Derivatives Park, we will play a key role, together with the public and private sectors, in providing essential infrastructure development services. At ADQ, we are driving value creation and helping to build a prosperous economy for the benefit of Abu Dhabi through our diverse portfolio of the emirate’s leading entities such as Abu Dhabi Ports, Abu Dhabi National Energy Company, Etihad Rail, Emirates Steel, DUCAB and Arkan.”

ADNOC and ADQ both have strong track records of driving private sector growth in Abu Dhabi. At the core of its current plans, ADNOC’s in-country-value, ICV, programme, to date, has driven more than AED44 billion (US$12 billion) back into the UAE economy and created over 1,500 private-sector jobs for UAE nationals since it was launched in 2018. ADQ brings together a range of vital local expertise across power and logistics, industrial fabrication and manufacturing which will support the development of the planned Derivatives Park in Ruwais.

With the required approvals, the JV will be incorporated in Abu Dhabi Global Markets with both companies jointly determining the JV’s management team and board, in line with global corporate governance best practice.

The development of a robust downstream derivatives industry in Ruwais is the cornerstone of ADNOC downstream’s growth strategy, launched at ADNOC’s Downstream Investment Forum in 2018. Since the Forum, ADNOC has attracted significant foreign investment and expanded its downstream partnership base across its refining, fertiliser and pipeline assets. Concurrently, ADNOC has successfully progressed large-scale capital projects in Ruwais to further stretch the margin of each barrel of oil produced, including the Crude Flexibility Project, ADNOC’s flagship refinery upgrade programme, which will enable processing of crudes other than Murban, and, in turn, unlock more robust crude export optionality.

ADNOC’s joint venture with Borealis, Borouge, has also advanced the development of production units at the Borouge 4 complex, a core enabler of the Ruwais Derivatives Park which will support feedstock production capacity for the Park’s anchor projects.

ADNOC continues to deliver on the expansion of its downstream business as part of its 2030 smart growth strategy, which will see the Ruwais industrial complex transformed into a globally competitive chemicals cluster, leveraging the UAE’s close geographic proximity to global growth markets, access to competitive feedstocks, streamlined utilities and services offer, as well as Abu Dhabi’s attractive fiscal and regulatory environment.