ADNOC and OMV have announced strong progress towards the formation of Borouge Group International, including the signing of an Asset Usage Agreement for the Borouge 4 (B4) production complex.
The formation of Borouge Group International, through the combination of Borouge and Borealis, and the acquisition of Nova Chemicals, is progressing according to plan, with the transactions close expected by the end of March 2026, subject to customary conditions.
B4 is a new integrated polyolefins production complex with a 1.5 million tons ethane cracker and 1.4 million tons of polyethylene capacity, with the first plant expected to startup this quarter.
Boasting the latest, proprietary Borstar technology to produce advanced, high-premium polyethylene, B4 is 70 percent owned by ADNOC and 30 percent by OMV, and forms part of the Borouge production site, set to become the world’s largest single-site polyolefins complex.
The Agreement enables Borouge, and subsequently Borouge Group International AG, to operate and market the volumes of B4 in return for an at-cost asset utilization fee. It will provide both entities with financial flexibility while delivering an estimated $400 million in cumulative net profit over the next three years, representing approximately 10 percent annual accretion to Borouge earnings post ramp-up.
It is anticipated that the Agreement for B4 will be maintained until Borouge Group International AG acquires the asset from its current owners, which is currently not expected before 2029, thereby providing flexibility on the timing of future capital outlays.
B4 operations are expected to ramp up progressively throughout 2026, and with the signing of the Agreement, Borouge Group International AG will have access to 13.6 million tons of nameplate production capacity across Europe, the Middle East, and North America, positioning the company as the world’s fourth largest polyolefins producer.
The combined entity is expected to continue delivering a best-in-class margin profile and generate significant synergies, as per the statement.
