Borouge Plc, a global leader in providing innovative and differentiated polyolefins solutions, has unveiled an ambitious series of strategic asset expansion projects designed to significantly enhance its production capabilities and drive future growth. These initiatives are projected to contribute an estimated $165 million to $200 million (equivalent to AED 600 million – AED 730 million) in additional EBITDA annually, further cementing status as a powerhouse in the petrochemical industry.
The newly announced expansion projects focus on upgrading and increasing the capacity of second ethane cracker (EU2) and expanding its fourth and fifth polyethylene production units (PE4 and PE5). These efforts align closely with broader strategic growth roadmap, aiming to meet escalating market demands, generate new revenue streams, and consolidate its leadership position in key global markets.
Strategic Contract Awards to Industry Leaders
As part of these expansion efforts, Borouge has awarded two significant contracts to leading engineering firms. The first contract was granted to Linde Engineering, a globally recognized leader in industrial gas and petrochemical plant solutions, for Front-End Engineering Design (FEED) services related to the upgrade of EU2 ethane cracker. This project aims to add an impressive 230,000 tonnes per annum (tpa) of additional capacity to the unit, translating to a 15% increase in nameplate capacity.
The selection of Linde Engineering reflects emphasis on expertise and proven performance. Linde, which also served as the licensor for the original EU2 cracker, brings deep technical knowledge and a strong track record in successful cracker design and execution. The expanded EU2 unit is scheduled for completion in the fourth quarter of 2028, and upon becoming operational, it is expected to deliver significant financial benefits to Borouge’s bottom line.
Crucially, the feedstock for the EU2 cracker — ethane gas — is reliably supplied through Borouge’s strategic partnerships with ADNOC Gas and ADNOC Refining, ensuring a highly integrated and secure supply chain critical for sustainable operations.
In parallel, Borouge has also awarded an Engineering, Procurement, and Construction (EPC) contract to Target Engineering Construction Company for the expansion and refurbishment of the company’s PE4 and PE5 polyethylene units. Following a rigorous competitive bidding process, Target Engineering emerged as the preferred contractor to spearhead this crucial project.
This expansion will enhance each unit’s nameplate capacity from the existing 540,000 tpa to 700,000 tpa. The project will leverage Borealis’ cutting-edge Borstar® polyethylene technology, known for its superior polymer properties and energy-efficient production processes. Completion of the upgrade is targeted for the first quarter of 2027, positioning to better serve burgeoning market segments with high-performance polyethylene solutions.
CEO Perspective: A Future-Focused Growth Strategy
Speaking on the significance of these projects, Hazeem Sultan Al Suwaidi, CEO of Borouge, expressed his enthusiasm and confidence in the company’s strategic direction:
“By increasing production at our EU2, PE4, and PE5 units, as well as delivering the 4 mega project, we are strategically positioned for accelerated growth. The expansions of our ethylene and polyethylene capabilities will enable Borouge to meet growing market demands, unlock new revenue streams, and further strengthen our global market position. These projects demonstrate our commitment to innovation, operational excellence, and sustainable growth.”
Borouge’s growth trajectory is a testament to its ability to anticipate market needs and respond with precision-engineered solutions. This proactive expansion strategy reflects not only confidence in the company’s operational capabilities but also its long-term vision to remain at the forefront of the polyolefin sector.
A Decade of Transformational Growth
Since its establishment in 2001, Borouge has achieved remarkable growth, expanding its annual production capacity tenfold. From an initial capacity of just 450,000 tpa, the company now boasts a production output of 5 million tpa. This impressive expansion has positioned Borouge among the top five producers of polyolefins in the Middle East and Asia Pacific regions.
Looking forward, Borouge’s commitment to operational excellence and capacity-building is unwavering. The completion of the Borouge 4 mega project, coupled with the ongoing EU2, PE4, and PE5 expansions, is expected to increase the company’s total annual polyolefins production capacity to over 6.6 million tonnes by 2028. This will not only enable Borouge to capture a larger share of global markets but also meet the rising demand for high-quality polyolefin products across a wide range of industries, including packaging, infrastructure, automotive, and agriculture.
Moreover, these projects contribute directly to the UAE’s broader economic ambitions through ADNOC’s In-Country Value (ICV) program. By prioritizing local procurement, training, and employment, Borouge’s expansions are actively supporting the growth and diversification of the national economy.
A Transformational Vision: Borouge Group International
In a bold move that underscores its ambition to lead on a global scale, Borouge’s major shareholders, ADNOC and OMV, have proposed the combination of Borouge with Borealis — alongside the acquisition of Nova Chemicals — to form a new entity: Borouge Group International.
This merger and acquisition strategy is poised to create a $60 billion global polyolefins leader, becoming the world’s fourth-largest polyolefin company. The new organization would boast an impressive production capacity of 13.6 million metric tonnes per year, spread across 62 manufacturing plants located in North America, Europe, and the Middle East. This would more than double Borouge’s current production capacity and significantly expand its global footprint.
The formation of Borouge Group International marks a pivotal moment in the company’s evolution, offering enhanced scale, greater operational synergies, expanded innovation capabilities, and broader market access. It will position the company to drive sustainable growth and deliver enhanced shareholder value over the long term.
Importantly, the new entity plans to offer an attractive estimated total dividend of $2.2 billion annually post-closing of the transaction. This is equivalent to a minimum of 16.2 fils per share dividend, assured from 2026 through 2030 — providing a compelling proposition for existing and prospective investors alike.
Commitment to Innovation, Sustainability, and Customer Success
Borouge’s approach to growth is deeply rooted in its unwavering commitment to innovation, sustainability, and customer success. Through strategic investments in advanced technologies like Borealis’ Borstar® process and cutting-edge research and development initiatives, Borouge continues to deliver high-value solutions that meet the evolving needs of industries across the globe.
Moreover, sustainability remains central to Borouge’s business model. By optimizing production processes for energy efficiency, reducing carbon footprints, and promoting circular economy principles through recyclable and lightweight materials, Borouge is actively supporting global climate and sustainability goals.
As Borouge steps confidently into its next phase of expansion and transformation, its focus remains firmly on empowering customers with superior material solutions, contributing to economic prosperity in the UAE and beyond, and shaping the future of the global polyolefins industry.
Borouge’s latest expansion initiatives, along with the planned creation of Borouge Group International, represent a dynamic and strategic leap forward. By strengthening its operational capacity, embracing transformative partnerships, and staying committed to innovation and sustainability, Borouge is not only preparing to meet the demands of tomorrow but also setting new standards for excellence and leadership in the petrochemical industry.
As the company continues to grow its influence and capabilities, stakeholders — from customers and partners to investors and communities — can expect Borouge to remain a driving force for value creation, industrial advancement, and sustainable success on the global stage.
