Borealis today announced a net profit of EUR 261 million in the second quarter of 2017, compared to EUR 309 million in the second quarter of 2016. According to the quarterly statement of the company, net profit reached a record high first half year result of EUR 574, driven, among other things, by the increased profit contribution from Borouge, the Abu Dhabi-based polyolefin JV between Borealis and Abu Dhabi National Oil Co.
European integrated polyolefin margins were “very healthy, above average” said Borealis CEO Mark Garrett, speaking to Plastics News Europe. The result was “just a little bit softer” than in the second quarter of 2016, he said, mainly due to the five major turnarounds the company needs to get through this year in Europe. “These are bound to have some impact on the result,” he added.
He emphasised that the small movement down in margins notwithstanding, the outlook remains extremely good. Demand remains good and the third quarter is likely to be a continuation of the second. As he described it: “We cannot remain in the stratosphere forever. But the industry is doing well in Europe and the European economy is far better than the last few years. We are extremely satisfied with the solid result we’ve achieved.”
During the quarter under review, the Abu Dhabi National Oil Company (ADNOC) and Borealis signed a framework agreement under which the companies will advance two key projects: construction of the new Borouge 4 complex and the proposed new polypropylene plant based on Borealis’ proprietary Borstar technology, which will be integrated with Borouge 3.
Under the agreement, the Borouge 4 project, said to represent an investment of some € 8.5 bn, will move to the pre-feed (front end engineering and design) stage, comprising a world-scale, mixed feedstock cracker, using existing feedstock available in Abu Dhabi and downstream derivatives units for both polyolefin and non-polyolefin products. The new Borouge 4 complex is slated to come on stream around 2023 and will be integrated with Takreer, ADNOC’s refinery arm.
Additionally, the companies have agreed to commence engineering, procurement & construction tendering for the new PP facility. The plant, which will have a projected capacity of 0.5 million t/y, will utilize surplus propylene from the new propane dehydrogenation unit at Takreer.
The capacity expansion targets the Asian market, where demand for high-grade polymers is forecast to double by 2040, according to the two companies
The framework agreement also calls for ADNOC and Borealis to review an extension of the Borouge JV, founded in 1998, beyond its 30-year lifespan.
“The lifetime of a complex such as Borouge 4 extends far beyond the 30-year period of the JV,” Garrett explained. “When making an investment decision of this magnitude, obviously, those aspects need to be taken into consideration as well.”
“We have recommitted to our long-term engagement in this Joint Venture with ADNOC. We look forward to embarking on the next stage of our journey, with the extension and expansion of Borouge. This will allow us to capitalise on the steep demand growth for polyolefin products in Asian markets.”