Oil company the Abu Dhabi National Oil Company (ADNOC) earlier this month signed an agreement with methanol producer Proman to develop the United Arab Emirates’ (UAE’s) first world-scale methanol production facility at the TA’ZIZ Industrial Chemicals Zone in Ruwais, Abu Dhabi.

Under the terms of the agreement, chemicals company Abu Dhabi Chemicals Derivatives Company (TA'ZIZ) and Proman will construct a natural gas to methanol facility with an anticipated capacity of up to 1.8-million tons a year.

The facility will meet growing domestic and international demand for this clean and versatile chemical commodity, which is gaining momentum as a lower-emission fuel alongside existing uses spanning industrial products. The project is subject to relevant regulatory approvals.

TA’ZIZ is a joint venture between ADNOC and Abu Dhabi-based investment and holding company ADQ.

The proposed partnership will capitalise upon ADNOC’s attractive value proposition for downstream petrochemicals, ADQ’s diversified portfolio and Proman’s extensive construction and operational expertise as the world’s second largest methanol producer.

“We are pleased to welcome Proman as a strategic partner as we develop the UAE’s first domestic methanol production facility. This world-scale plant advances the TA’ZIZ mission to diversify the UAE’s economy and accelerate industrial development, by enabling local supply chains through the production of new chemicals in the UAE," said UAE Industry and Advanced Technology Minister and ADNOC MD Dr Sultan Ahmed Al Jaber.

“As Proman’s first investment in the UAE, our agreement underscores the continued appeal of the UAE as a highly attractive destination for international capital, supporting long-term industrial growth for Abu Dhabi’s private sector.

We look forward to bringing our full value-chain expertise to this development and expanding Proman’s global footprint to the UAE, in close partnership with ADNOC and ADQ. This will be the first methanol production facility in the UAE and will be one of the most energy efficient and low-emitting plants in the world,” stated Proman CE David Cassidy.

“Growing global interest in methanol as a cleaner fuel, particularly for the shipping sector, is set to drive a significant increase in worldwide methanol demand over the coming decade. As such, this is a particularly opportune time to invest in the UAE’s domestic downstream production capacity. We are excited to help drive forward the ambitious TA’ZIZ industrial development and the UAE’s downstream growth strategy, as well as growing our partnership with TA’ZIZ in the future.”

Production of this versatile chemical in the UAE for the first time supports the Ministry of Industry and Advanced Technology’s mission to diversify the UAE’s economy and accelerate industrial development.

Methanol is a critical chemical building block with a wide range of industrial applications including in fuels, adhesives, solvents, pharmaceuticals and construction materials. Growth is expected to be driven by emerging economies in Africa and Asia, while production of methanol in the UAE will support decreased reliance on imports, enabling local manufacturers to “Make it in the Emirates” and establish greater resiliency among domestic supply chains.

TA’ZIZ comprises of three industrial zones, the first of which is an industrial chemicals zone that will host chemicals production, with seven proposed world-scale projects already in the design phase. The second is the light industrial zone, which will be home to downstream conversion industries that will convert the outputs of the industrial chemicals zone into consumable products. Lastly, an industrial services zone, which will house a variety of companies providing the necessary services required by the TA’ZIZ industrial zones and the wider Ruwais Industrial Complex.

The TA’ZIZ development has received significant interest from local and international investors since its launch in November 2020. Partnership agreements have been signed with Fertiglobe, GS Energy and Mitsui for the proposed development of a low-carbon ammonia production facility and with Reliance Industries for a proposed ethylene dichloride, chlor-alkali, polyvinyl chloride production facility.

Eight UAE-based investors have signed investment agreements with TA’ZIZ, for up to a 20% stake in a portfolio of chemicals projects within the TA’ZIZ Industrial Chemicals Zone, marking the first domestic public-private-partnership in Abu Dhabi’s downstream and petrochemicals sector.