B4 operations are expected to ramp up progressively throughout 2026
ADNOC and OMV Aktiengesellschaft (OMV) recently announced strong progress towards the formation of Borouge Group International AG, including the signing of an Asset Usage Agreement for the Borouge 4 (B4) production complex.
B4 is a new integrated polyolefins production complex with a 1.5mn tonnes ethane cracker and 1.4mn tonnes of polyethylene capacity, with the first plant expected to start this quarter.
The Agreement enables Borouge Plc, 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 US$ 400mn in cumulative net profit over the next three years, representing approximately 10% annual accretion to Borouge Plc earnings post ramp up.
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 13.6mn tonnes of nameplate production capacity across Europe, the Middle East and North America, positioning the company as the world’s fourth largest polyolefins producer.
Accretion
Borouge Plc shareholders and Borouge Group International AG’s owners, ADNOC and OMV, will benefit from the accretion provided by the Agreement.
Upon completion, ADNOC’s stake in Borouge Group International AG will be transferred to XRG, a wholly owned subsidiary of ADNOC, complementing XRG’s Global Chemicals Platform, and fully supporting its ambition to become a top three global chemicals investor.
Borouge Group International AG will be jointly controlled as an equal partnership between XRG and OMV AG, each holding a 50% stake at completion.
