Abu Dhabi, UAE — Abu Dhabi National Oil Company (ADNOC) and Austrian energy group OMV AG have signed a new agreement tied to the Borouge 4 production complex, locking in a deal that is projected to generate $400 million in cumulative net profit over three years and add approximately 10% annually to Borouge Plc earnings after full ramp-up.
The agreement is the latest milestone in the two companies' broader plan to form Borouge Group International AG — a new entity created by combining Borouge Plc and Borealis AG and acquiring Nova Chemicals. That transaction remains on track to close by the end of March 2026, subject to customary conditions.
What the Borouge 4 Agreement Does
The newly signed asset usage agreement grants Borouge Plc — and subsequently Borouge Group International AG — the right to operate and market output from the Borouge 4 complex in exchange for an at-cost utilization fee. The arrangement is expected to remain in place until the new entity formally acquires the Borouge 4 asset, which is not anticipated before 2029.
Borouge 4 is an integrated polyolefins complex currently in its startup phase, featuring:
- A 1.5 million tonnes-per-year ethane cracker
- 1.4 million tonnes of polyethylene capacity
- Borstar technology for the production of high-grade polyethylene
The facility is owned 70% by ADNOC and 30% by OMV. Its first plant is expected to begin operations this quarter, with production ramping up progressively through the rest of 2026.
Scale of the Combined Entity
Once Borouge Group International AG is formed, the combined company 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.
That scale matters for the region's industrial strategy. As the UAE pushes to move up the petrochemical value chain, having a globally significant plastics and chemicals platform anchored in Abu Dhabi strengthens the country's position as more than an oil exporter.
Shareholder and Listing Timeline
For existing Borouge Plc shareholders, the transition involves a planned tender offer in 2027 — converting their Borouge Plc shares into Borouge Group International AG shares. This is subject to market conditions and regulatory approvals. Until then, Borouge Plc will remain listed on the Abu Dhabi Securities Exchange (ADX).
The new entity will remain privately held in the interim, with a planned equity raise tied to the eventual tender offer timing.
On dividends, the companies confirmed that Borouge Plc's intended annual distribution of 16.2 fils per share will be maintained following the transaction, offering continuity for income-focused investors.
Ownership Structure Post-Close
Upon completion, ADNOC's existing stake in the combined entity will transfer to XRG, its wholly owned subsidiary focused on downstream and international energy investment. Both XRG and OMV will each hold a 50% stake in Borouge Group International AG.
The formation of Borouge Group International AG represents one of the most significant energy deals in the region this year, with implications for how the UAE positions its non-oil industrial base for global competition.
