The agreement grants marketing rights, enhances the earnings outlook, and supports future plans for a public listing.
Dubai: Abu Dhabi National Oil Company (ADNOC) and OMV AG announced further progress in establishing Borouge Group International AG, signing an agreement related to the Borouge 4 production complex, which is expected to boost earnings and enhance operational flexibility.
The companies stated that the formation of Borouge Group International AG—through the merger of Borouge Plc and Borealis AG, along with the acquisition of Nova Chemicals—remains on track, with the transaction expected to close by the end of March 2026, subject to customary conditions.
Deal to drive earnings growth
The newly signed asset usage agreement permits Borouge Plc, and subsequently Borouge Group International AG, to operate and market production from the Borouge 4 complex in exchange for an at-cost utilization fee.
The deal is expected to generate approximately $400 million in cumulative net profit over three years and is projected to contribute around 10% annually to Borouge Plc’s earnings once fully ramped up.
The agreement will remain in effect until the new entity acquires the Borouge 4 asset, which is not expected before 2029.
Expansion strengthens production
Borouge 4 is an integrated polyolefins complex featuring:
- A 1.5 million tonnes-per-year ethane cracker
- 1.4 million tonnes of polyethylene capacity
The facility, which employs Borstar technology to produce high-grade polyethylene, is 70% owned by ADNOC and 30% by OMV. The first plant is expected to start up this quarter, with operations ramping up through 2026.
Following the agreement, Borouge Group International AG is expected to have access to 13.6 million tonnes of nameplate production capacity across Europe, the Middle East, and North America, positioning it among the world’s largest polyolefins producers.
Listing tied to future equity raise
ADNOC and OMV noted that the timing of a proposed tender offer—converting Borouge Plc shares into Borouge Group International AG shares—will be coordinated with a future equity raise.
The tender offer is expected in 2027, subject to market conditions and regulatory approval.
Borouge Plc will remain listed on the Abu Dhabi Securities Exchange until that time, while the new entity will remain privately held in the interim.
Borouge Plc’s planned annual dividend of 16.2 fils per share will be maintained after the transaction, supporting shareholder returns.
Upon completion, ADNOC’s stake will transfer to XRG, its wholly owned subsidiary, and XRG will assume ownership within the new structure.
