Chemaweyaat Taweelah Chemicals Industrial City

Kathleen Bury, Contax project manager, provides an insight into what will be one of the world's largest integrated complexes, producing olefins, fertilizer and aromatics

Kathleen Bury, Project Manager, Contax
Kathleen Bury, Project Manager, Contax
The project will be one of a number of complexes globally to combine aromatics, olefins and fertilizer.
The project will be one of a number of complexes globally to combine aromatics, olefins and fertilizer.

Kathleen Bury, Contax project manager, provides an insight into what will be one of the world’s largest integrated complexes, producing olefins, fertilizer and aromatics

GCC Context

Despite the current economic climate, the planned GCC energy Capex landscape for 2008 to 2010 continues to exceed the Capex levels experienced during the 2005 – 2007 period, with c.$368bn worth of investments on the table. 

The dominant sectors continue to include the refining and petrochemical sectors, with c.$76bn and c.$72bn respectively already planned for award by the end of 2010.   

UAE supports a project Capex position of c.30% worth of the investment planned within the GCC energy space by 2010.
 
Contax’s recent analysis of the ‘Impact of the Financial Situation on GCC Energy Project Workload’ indicates that the project postponement trend seen during 2007 and the early 2008 looks set to continue into 2009 with a considerable amount of award and execution schedule slippages. 

Nevertheless, given the GCC’s commitment to solidifying its global ‘petrochemical and refining hub’ position and developing its downstream presence, it is anticipated that a number of key projects will be realised in the long run.
 
A major project that is expected to help UAE achieve this downstream expansion goal is the Chemaweyaat Taweelah Chemicals Industrial City, Phase 1 (CTCIC 1).

Background and strategic importance

A JV comprising Borealis and two Abu Dhabi state-linked entities, International Petroleum Investment Corporation (IPIC) and Abu Dhabi Investment Council (ADIC) is planning to develop, as a first phase, one of the world’s largest grassroot integrated Chemical Complexes in the newly planned Chemicals Industrial City at Khalifa Industrial Zone at Taweelah. 

The project will be one of a number of complexes globally to combine aromatics, olefins and fertilizer production. 

 
 
The first phase of this project is expected to have a total project cost of approximately $11-20 billion and produce a total output of 7 million tones per annum (mtpa). 

To achieve this target Basell, Borealis and Asahi Kasei have already been chosen as technology providers for the plant. 

The CTCIC 1 plant, which is expected to begin operations in Q2 2013, will utilise crude-derived naphtha feedstock from Takreer’s Ruwais refinery to produce aromatics, urea, polypropylene, LLDPE, LDPE and naphtha.

However, despite there being strong support for the project from the Abu Dhabi Government, there are a number factors resulting from the current economic climate which could impact the delivery of the project; recession in buyer economies, desire for project owners to take advantage of perceived lower critical input costs and drive down EPC bid prices and lack of available project financing.

Nevertheless, development of the CTCIC 1 project looks set to satisfy a number of key strategic objectives:

1. A key component of the ‘Plan Abu Dhabi 2030’ is the development of the Khalifa Port and Industrial Zone (KPIZ). 

It is anticipated that this initiative and the CTCIC 1 project will significantly help Abu Dhabi to attract investments to and develop its industrial and downstream industries, create a sustainable petrochemical and chemical hub and deliver joint benefits for both the industrial zone and port.

2. To speed up Abu Dhabi’s plans to develop a plastics-based industry for domestic and export purposes. 

3. The CTCIC 1 project will utilise crude-derived naphtha as feedstock rather than ethane. This will free up ethane supplies which are in high demand from the power sector and utilise Abu Dhabi’s more abundant supply of naphtha, thus guaranteeing future feedstock supply.

Scope of work

The exact scope of work and package configuration of the project will be released once the FEED has been completed.  However, at the present moment in time, it is anticipated that the project will include the following units:

• Naphtha cracker
• Aromatics plant
• Cumene unit
• Mono-ethylene glycol unit
• Ethylene oxide unit
• Ammonia plant
• Air separation unit
• LLDPE unit
• Urea plant
• Polypropylene unit
• Hydrogenation plant
• LDPE unit
• Phenol unit
• Bisphenol-A unit
• MTBE unit
• Butene-1 unit
• Polycarbonate unit
• Ethylene acrylic unit
• Melamine unit

Challenges

Current economic and market dynamics are questioning the validity and schedules of many of the energy projects within the GCC.

With the recession in buyer economies, desire for project owners to take advantage of perceived lower critical input costs and drive down EPC bid prices and project financing issues; key projects are being postponed and cancelled on a weekly basis.

Contax’s latest report ‘Impact of the Financial Situation on GCC Energy Project Workload’ looks to provide clarity around which projects have a 70%, between 40-70% and less than 40% probability of proceeding within the current economic climate and thus which sectors and countries will experience the greatest impact. 

Following this analysis and as a result of the factors highlighted above, Contax believes that the CTCIC 1 project has a medium probability of going ahead in the long run.

Contax Opinion:
Likelihood of Project Realisation

• Low
• Medium
• High

Contax offers a unique portfolio of fact based market and project reports which provide in-depth project information and market analysis to help you make informed decisions. For more information and access to these reports, please contact marketing@contaxgroup.com
 

Project activity

Proposed timeline/status

Commencement of FEED

Q2 2009

Completion of FEED

Q2 2009

EPC ITB Issue

Q3 2009

EPC Award

Q4 2009

Completion Date

Q2 2013

 

Key project details:

Project Name:

Chemaweyaat Taweelah Chemicals Industrial City, Phase 1

Project Owners:

Borealis International Petroleum Investment Corporation (IPIC)

Abu Dhabi Investment Council (ADIC)

Status:

Front End Engineering Design (FEED)

Location:

Naphtha

Feedstock:

Heavy marine crude

Contractors

PMS: WorleyParsons

FEED: WorleyParsons

EPC Award Date:

Q4 2009

Completion Date:

Q2 2013

 

 

Source: Contax Market Intelligence, December 2008

Source: Contax Market Intelligence, December 2008

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