Borouge awards Project Management and Financial Advisory contracts for major expansion in Middle East

The Project Management Consultancy (PMC) and Financial Advisor contract awards linked to a proposed major UAE expansion were announced today by Borouge – Borealis' joint venture with the Abu Dhabi National Oil Company (ADNOC). Borouge has awarded the PMC to Foster Wheeler and the Financial Advisory contract to HSBC. This follows the completion of the feasibility study for a construction project to triple the current production capacity in Ruwais, Abu Dhabi of 600,000 tonnes of polyolefins per year to 2 million tonnes per year.

Henry Sperle, Borealis Executive Vice President Technology and Projects, commented on the latest development by saying, "Borouge has been an unqualified success from the outset. This latest decision was largely driven by healthy market growth outlooks in the Middle East and Asia Pacific as well as continued demand for enhanced polyolefins based on the Borstar® process technology. The new PP products will bring access to new markets and compliment the existing Borealis marketing strategy in key market segments."

With an investment in excess of USD 2.5 billion and completion slated for 2010, Borouge expects to expand its annual production to include an additional 540,000 tonnes per year Borstar® polyethylene plant and two 400,000 tonnes per year Borstar polypropylene (PP) units. The new capacity will primarily address Middle Eastern and Asian markets, targeting demand for high-end, differentiated pipe and enhanced packaging solutions.

The project will now enter the Front End Engineering Design phase. Further details on the proposed expansion project will be announced at a later stage.

In a related announcement last week, on June 30, 2005, Borealis announced a change in its ownership structure underpinning future growth. The International Petroleum Investment Company (IPIC) of Abu Dhabi and OMV Aktiengesellschaft of Austria announced their agreement to purchase Statoil's 50% shareholding in Borealis A/S. As a result, the new Borealis ownership will be 65% IPIC and 35% OMV, with closing of the transaction expected during the fourth quarter once regulatory approvals are received.

Borstar is a registered trademark of Borealis A/S, Denmark.

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