Billionaire Gautam Adani-run Adani Group has forged a partnership with UAE's oil firm Adnoc, German chemical giant BASF and Austria's Borealis to study the feasibility of setting up a USD 4 billion chemical complex at Mundra in Gujarat by 2024.
The four firms have signed a memorandum of understanding (MoU) to "engage in a joint feasibility study to further evaluate a collaboration for establishment of a chemical complex in Mundra, Gujarat," the companies said in a statement.
In January this year, Adani Group had announced plans to set up a Rs 16,000 crore chemical factory at Mundra in partnership with BASF.
The present MoU, the statement said, was the next step of the January announcement.
"With the inclusion of Abu Dhabi National Oil Company (Adnoc) and (Europe's second-largest producer of polyethylene and polypropylene) Borealis as potential partners, the parties are examining various structuring options for the chemical complex that will leverage the technical, financial and operational strengths of each company," it said.
The total investment is estimated to be up to USD 4 billion (about Rs 28,400 crore), it added, but did not state which company will hold how much stake.
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The partners aim to finalise the joint feasibility study by the end of Q1 2020. Production is intended to commence in 2024.
"The collaboration includes evaluating a joint world-scale propane dehydrogenation (PDH) plant to produce propylene-based on propane feedstock to be supplied by ADNOC. Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis," it said.
The PP complex will be the first overseas production joint investment by ADNOC and Borealis as part of a strategic framework with their current joint venture Borouge.
Furthermore, propylene will be the key raw material for the previously announced acrylics value chain complex comprising glacial acrylic acid (GAA), Oxo-C4 (butanols and 2-ethyl hexanol), butyl acrylate (BA) and potentially other downstream products as part of a joint venture of BASF and Adani in which BASF holds a majority.
"The designated site is planned at Mundra port in Gujarat, India, and the products are predominantly for the Indian market, serving a wide range of local industries, including construction, automotive and coatings," the statement said.
Besides investing in the chemical factory, the partners will also invest in wind and solar power plant at the site to meet electricity requirement of the unit.
"The partners are evaluating co-investment in a wind and solar park with the plans at an advanced stage of development," it said.
"If realized, this would be the world's first CO2-neutral petrochemical site to be fully powered by renewable energy, fully in line with the partners' commitment to sustainability and energy efficiency."
Commenting on the MoU signing, Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said: "This exciting collaboration is in line with ADNOC's strategy to foster mutually beneficial partnerships. As a value-adding partner, ADNOC will play a crucial role as the propane feedstock supplier to this project."
Adani Group Chairman Gautam Adani stated: "We are very pleased to collaborate with our international partners to establish a chemical manufacturing complex at Mundra Port. We stand committed to the 'Make in India' initiative and serve the larger purpose of aligning growth opportunities with the creation of goodness for the nation."
Alfred Stern, CEO of Borealis, added: "This partnership is a unique opportunity to strengthen our PP presence in India with proprietary Borealis Borstar PP technology and to create value and tangible benefits through innovation for customers across multiple industries."
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