BASF and Adani Add Partners to India Project

18.10.2019 -

German chemical giant BASF and India’s Adani have broadened their vision of a mammoth chemical production complex at Mundra, India, nearly doubling the planned investment sum and signing memoranda of understanding with two additional industrial investors to explore feasibility.

Projected new partners in the project announced in January of this year are Abu Dhabi-based ADNOC, the United Arab Emirates’ national oil group, and its sister company-cum-joint venture partner, Vienna, Austria-based Borealis. The two companies belong to the Abu Dhabi-based Mubadala holding and are partners in the Bourouge joint venture headquartered in the emirate.

The envisioned heart of the complex continues to be a propane dehydrogenation (PDH) unit that would feed an acrylics value chain and polypropylene production. Rather than the originally foreseen €2 billion, however the total cost pegged to run as high as $4 billion.

A joint feasibility study is due to be completed by the end of 2020, with the start of production penciled in for 2024. The original timetable called for the study to be wrapped up by the end of 2019.

As before, the plans foresee plants producing glacial acrylic acid (GAA), Oxo-C4 (butanols and 2-ethylhexanol), butyl acrylate (BA), along with potentially other downstream products as part of the joint venture of BASF and Adani in which the German group holds a majority.

Output of the complex would be earmarked for the Indian market, where it would supply a range of local industries, including construction automotive and coatings. Adani’s owner, billionaire Gautam Adani, said the vision reflects India’s need to reduce its dependence on imports and underscore his company's ’commitment to the government’s “Make in India” initiative.

Under the intended wider cooperation ADNOC would supply propane feedstock for the PDH plant as well as for the PP complex, which would be owned by the Abu Dhabi oil group together with Borealis and would use Borealis’ proprietary Borstar technology. The Indian PP investment would be the first for the Borouge owners overseas.

According to BASF, the parties to the tentative agreement are currently reviewing prospective structures for the partnership that would leverage the technical, financial and operational strength of all four players.

Regarding energy supply, the idea is to operate the site completely from renewable resources, with the prospective partners evaluating co-investment in a wind and solar park. First broached by BASF at year’s begin, the Indian site would house the German group’s –and the world’s – first CO2 neutral production site as well as being BASF’s biggest-ever investment on the Indian subcontinent.

For the emirates’ perspective, Sultan Al Jaber, the UAEs’ minister of state as well as CEO of ADNOC, said the planned collaboration is in line with the national and industrial strategy to foster “mutually beneficial partnerships,” adding that, as the fastest growing global energy market, “India is crucial to our international growth in the downstream sector.”