OBG talks to Khadem Al Qubaisi, Managing Director, International Petroleum Investment Company (IPIC)

Interview: Khadem Al Qubaisi

To what extent are IPIC’s investments helping to develop a petrochemicals industry in line with the Abu Dhabi Economic Vision 2030?

KGADEM AL QUBAISI: IPIC is a long-term investor in energy and energy-related assets and undertakes strategic projects on behalf of its shareholder, the Abu Dhabi government. Since its establishment, IPIC has invested in more than 18 active companies and projects in the hydrocarbons value chain across the globe. These investments include exploration and production, midstream activities, crude refining and petrochemicals.

IPIC seeks to engage closely with our portfolio of companies. A good example is our work with OMV ( Austria). Since our initial investment in 1994 we have entered into a partnership with OMV to buy a controlling stake in Borealis (1998) and later to create Borouge (UAE) through a partnership between Borealis and ADNOC. In 2014 Borouge will raise its capacity to 4.5m tonnes per annum (tpa), creating the largest integrated, single-site, polyolefins complex in the world.

In addition, we have utilised Borealis’ resources and expertise to help create ChemaWEyaat, a joint venture established by emiri decree in 2008, to set up petrochemicals complexes in Abu Dhabi with the purpose of utilising liquid feedstocks. ChemaWEyaat plans to build a number of globally leading petrochemicals complexes, the first of which will be Tacaamol Aromatics Plant, a complex producing 1.4m tpa of paraxylene and 600,000 tpa of benzene, respectively.

How will the Abu Dhabi Crude Oil Pipeline (ADCOP) enhance energy security in the region, and what further benefits does the project offer?

AL QUBAISI: The Abu Dhabi government has entrusted IPIC with a mandate to implement this strategically significant project, recognising the IPIC’s expertise in pipeline development and operations through its portfolio of companies, including Pak-Arab Refinery (PARCO), OMV and Compañía Española de Petróleos (CEPSA). Starting at Habshan, which is the current collection point for Abu Dhabi's onshore crude oil production, ADCOP runs through Sharjah and Ras Al Khaimah to the export terminal in Fujairah, and so bypasses the Strait of Hormuz. The 48-inch-diameter pipeline has been designed to transport 1.5m barrels per day (bpd) of crude oil from the Abu Dhabi Company for Onshore Oil Operations’ (ADCO) facilities at Habshan over a distance of 400 km to the terminal in Fujairah, making it the longest pipeline in the UAE as well as one of the longest in the Middle East.

In terms of strengthening energy security in the region, ADCOP ensures that the oil flow from the UAE is not affected in the event of a closure or disruption in the Strait of Hormuz, and guarantees revenues from the export of crude. Further, it boosts global energy security by allowing the uninterrupted flow of Abu Dhabi crude to global markets. Additional benefits include saving up to three days in transportation time, reductions in insurance costs, and freight cost savings owing to the water depth in Fujairah, which allows full loading of very large cruise carriers. ADCOP is being used to export 600,000 bpd of Murban crude and is undergoing final testing and commissioning prior to operating at its full capacity of 1.5m bpd.

In what ways is ADCOP expected to accelerate economic development in Fujairah?

AL QUBAISI: We are confident that our new projects in Fujairah will bring direct economic benefits to the Northern Emirates. IPIC is involved in two other major projects in Fujairah as well. The first, Fujairah Refinery Project, is a 200,000-bpd, grassroots refinery, while the second, Emirates LNG, is a joint venture with Mubadala Petroleum.

Both of these projects will contribute significantly to the economic development of Fujairah through investment in the region of $5bn and the creation of around 1000 new jobs. A significant part of Fujairah Refinery’s production will be aimed at meeting demand for refined products in the Northern Emirates.