ADNOC and TAQA Sign 27-Year Utilities Pact to Power Ruwais Chemicals Complex

Abu Dhabi – Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company PJSC (TAQA) have concluded a 27-year Utilities Purchase Agreement that will secure essential energy and water services for the planned TAZIZ Industrial Chemicals Zone in Ruwais Industrial City.

Long-Term Framework Covers Construction and Operations

The agreement spans the entire construction phase and subsequent offtake period for a central utilities platform designed to provide electricity grid connectivity, steam, process cooling, and water and wastewater management. Under the terms, ADNOC and TAQA will jointly develop, finance, and operate the infrastructure, while TAZIZ will create a service management company that becomes the sole offtaker of all utilities generated by the platform.

The 27-year duration offers rare long-range visibility for both developers and future tenants. Reliable access to integrated power, steam, and cooling lowers execution risk for investors and is viewed as critical for large-scale chemical manufacturing, particularly for products such as methanol and low-carbon ammonia that rely on stable, energy-intensive processes.

TAZIZ Targets 4.7 Million Tonnes of Annual Output

TAZIZ, a joint venture between ADNOC and Abu Dhabi holding company ADQ, plans to launch commercial operations in 2028. Once fully commissioned, the zone aims to produce approximately 4.7 million tonnes per year of chemicals, including methanol, low-carbon ammonia, polyvinyl chloride (PVC), ethylene dichloride (EDC), vinyl chloride monomer (VCM), and caustic soda.

The Ruwais location is positioned as a focal point of the United Arab Emirates’ strategy to expand downstream manufacturing and enhance industrial self-reliance. By offering a centralized utilities backbone, the project intends to attract additional downstream investors seeking cost-competitive, energy-secure sites in the Middle East.

TAQA Expands Role Beyond Power Generation

For TAQA, the contract adds a long-duration, demand-stable asset to its growing portfolio. The company’s Generation segment is already advancing several regional initiatives, including the 1 gigawatt Al Dhafra gas turbine project in the UAE and 3.6 gigawatts of high-efficiency capacity in Saudi Arabia through the Rumah 2 and Al Nairyah 2 independent power projects. The Ruwais utilities platform reinforces TAQA’s stated objective to serve as a strategic enabler of industrial development rather than solely a producer of electricity.

ADNOC Deepens Downstream Footprint

ADNOC has made downstream diversification a central pillar of its long-term strategy. By integrating chemicals production with existing upstream and midstream assets, the company intends to leverage low-cost feedstocks and established logistics networks to compete in global markets. The Ruwais initiative aligns with a broader trend among national oil companies to move further into value-added manufacturing as a hedge against potential long-term declines in crude demand. A recent International Energy Agency study highlights similar downstream investments underway across the Gulf region.

Infrastructure Certainty Seen as Competitive Advantage

Centralized utilities are expected to reduce both capital expenditure and ongoing operating costs for future tenants by eliminating the need for individual plants to invest in dedicated power, steam, and water systems. The unified platform also streamlines permitting, simplifies environmental compliance, and concentrates maintenance activities, all factors that can accelerate project timelines.

Electricity supplied through the grid connection will underpin electrolysis and other low-carbon pathways under evaluation for the site. Dedicated steam and cooling services are designed to meet the thermal and process demands of high-temperature reactions, while integrated water and wastewater facilities aim to optimize consumption and recycling rates in line with local sustainability standards.

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Regional Industrial Policy Support

The Ruwais development is one of several industrial clusters promoted by the UAE to stimulate non-oil economic growth, foster technology transfer, and create skilled employment opportunities. Officials have signaled that downstream chemicals, specialty materials, and hydrogen-related products will remain priority segments for new investment.

By anchoring utilities in a single agreement, ADNOC and TAQA provide potential investors with long-term cost visibility, often cited as a decisive factor in site-selection studies for petrochemical and transition-fuel projects. Industry analysts note that financing institutions typically assign lower risk premiums to ventures backed by integrated utility frameworks, further enhancing Ruwais’s attractiveness.

Next Steps

Engineering work on the utilities platform is scheduled to progress in parallel with detailed design of individual chemical units. Final investment decisions for several downstream plants are expected before construction of the utilities network reaches full scale. The agreement stipulates phased commissioning to align with the start-up schedules of TAZIZ tenants, ensuring that services come online as demand builds.

While specific financial terms were not disclosed, both parties indicated that the structure follows a project-finance model, with long-term offtake commitments underpinning external debt. This framework mirrors recent utility-scale power and water projects in the region, where 20- to 30-year contracts have become standard.

Once operational, the Ruwais Chemicals Hub is projected to bolster the UAE’s export profile, supply feedstocks to local manufacturing, and contribute to national objectives targeting increased in-country value. Market observers will monitor progress closely as the venture moves from agreement to execution, positioning the site as one of the Middle East’s largest integrated chemical complexes.

Crédito da imagem: ADNOC