UAE to build its first methanol production facility in Abu Dhabi

The Abu Dhabi National Oil Company (ADNOC) has signed an agreement with the world’s second-largest methanol producer Proman to develop the UAE’s first methanol production facility.

The facility will be located at the Ta’ziz Industrial Chemicals Zone in Ruwais, Abu Dhabi, and the project is subject to relevant regulatory approvals. Ta’ziz is a joint venture between ADNOC and ADQ, an Abu Dhabi-based investment and holding company.

By way of the agreement, Abu Dhabi Chemicals Derivatives Company (Ta’ziz) and Proman will construct a natural gas to methanol facility with an anticipated annual capacity of up to 1.8 million tons per annum, according to state news agency WAM.

Methanol has several industrial applications, including in fuels, adhesives, solvents, pharmaceuticals and construction materials.

Growth in demand for it is anticipated to be driven by emerging economies in Africa and Asia, with the new methanol production facility in the UAE expected to also support decreased reliance on imports, enabling local manufacturers to “Make it In the Emirates” and establish greater resiliency among domestic supply chains.

“This world-scale plant advances the TA’ZIZ mission to diversify the UAE’s economy and accelerate industrial development, by enabling local supply chains to produce new chemicals in the UAE. As Proman’s first investment in the UAE, our agreement underscores the continued appeal of the UAE as a highly attractive destination for international capital, supporting long-term industrial growth for Abu Dhabi’s private sector,” said Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and managing director and group CEO of ADNOC.

.@AdnocGroup has partnered with Proman, one of the world’s leading producers of methanol, to develop UAE’s first methanol production facility at TA’ZIZ Industrial Chemicals Zone’s in Ruwais, with a capacity of 1.8m tonnes per year, supporting the UAE’s economic diversification. pic.twitter.com/DLzBDQSmyL

— مكتب أبوظبي الإعلامي (@admediaoffice) March 3, 2022

David Cassidy, Proman chief executive added, “This will be the first methanol production facility in the UAE and will be one of the world’s most energy-efficient and low-emitting plants. Growing global interest in methanol as a cleaner fuel, particularly for the shipping sector, is set to drive a significant increase in worldwide methanol demand over the coming decade.”

Ta’ziz comprises of three industrial zones, the first of which is an Industrial Chemicals Zone that will host chemicals production, with seven proposed projects already in the design phase.

The second is the Light Industrial Zone, which will be home to downstream conversion industries that will convert the outputs of the Industrial Chemicals Zone into consumable products. Finally, an Industrial Services Zone, which will house a variety of companies providing the necessary services required by the Ta’ziz industrial zones and the wider Ruwais Industrial Complex.

The Ta’ziz development has received significant interest from local and international investors since its launch in November 2020. Partnership agreements have been signed with Fertiglobe, GS Energy, and Mitsui for the proposed development of a low-carbon ammonia production facility and with Reliance Industries for a proposed ethylene dichloride (EDC) chlor-alkali (CA), polyvinyl chloride (PVC) production facility.

Eight UAE-based investors have signed investment agreements with TA’ZIZ, for up to a 20 percent stake in a portfolio of chemicals projects within the TA’ZIZ Industrial Chemicals Zone, marking the first domestic Public Private Partnership in Abu Dhabi’s downstream and petrochemicals sector. In November last year, ADNOC and ADQ announced that Japan’s Mitsui & Co and the Korea’s GS Energy have partnered with Ta’ziz and Fertiglobe to develop a low-carbon blue ammonia facility in Ruwais.