By:Thenationalnews

The 1.8 million tonnes per annum (mtpa) plant will be the first methanol production facility in the UAE and will advance the Emirates' economic diversification by unlocking new domestic chemical value chains, Ta’ziz said in a statement on Monday.

The new plant, upon completion in 2028, will be powered by clean energy from the grid, making it one of the world’s most energy-efficient methanol plants.

Methanol is among the most promising transition fuels, offering a cleaner alternative to conventional fuels used in power generation, such as coal and diesel. Methanol also serves as an alternative to high-sulphur fuels used in marine transport. Primarily used to produce chemicals such as acetic acid and formaldehyde, methanol is also a clean-burning fuel that produces fewer smog-causing emissions.

The new contract award "is a significant step in realising Ta'ziz’s vision to drive the UAE’s industrial growth by creating a world-scale integrated chemicals ecosystem in Al Dhafra region”, Mashal Al Kindi, chief executive of Ta'ziz, said.

“The plant will enhance the UAE’s position as a leader in sustainable chemicals production and strengthen Ta'ziz’s role in enabling Adnoc’s global ambition to lead the chemicals sector.”

Founded in 2020 as a joint venture between Adnoc and Abu Dhabi's investment and holding company ADQ, Ta'ziz, is a manufacturing, industrial services, logistics and utilities ecosystem that supports the production of chemicals and transition fuels.

In its initial phase, Ta’ziz will produce 4.7 mtpa of chemicals by 2028. That includes methanol, low-carbon ammonia, polyvinyl chloride, ethylene dichloride, vinyl chloride monomer and caustic soda.

Ta'ziz has signed several new deals in the past few years to support industries. These include 31 land reservation agreements with companies for its light industrial area, as well as a deal to develop a low-carbon ammonia plant in Ruwais with the capacity of about one million tonnes a year.

In 2022, the company teamed up with India's largest private petrochemicals company, Reliance Industries, on their joint venture to develop a major chemicals project at the Ta’ziz industrial chemicals zone in Ruwais, worth $2 billion.

In 2023, Ta'ziz was designated as an investment zone to strengthen the business environment in Abu Dhabi's industrial sector.

Methanol production has nearly doubled in the past decade, with about 98 million tonnes produced a year, the International Renewable Energy Agency (Irena) said in a 2021 report. Under current trends, production could rise to 500 million tonnes a year by 2050, it said.

The methanol market is projected to grow at a compound annual rate of more than 4.87 per cent between 2022 and 2027, according to Mordor Intelligence. Over the short term, one of the major factors driving the market is the increasing demand for methanol-based fuel, it said.

"We plan to actively leverage local resources and our network of partners based on our extensive regional experience in the Ruwais industrial complex," Hong Namkoong, president and chief executive of Samsung E&A, said in a separate statement.