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777
FEEDSTOCK FOR THE RUWAIS COMPLEX
بروج
Borouge
Long-term market price-based feedstock contracts ensure Borouge's competitiveness
Supplier
Volume
Ethane
ADNOC Gas Processing
No minimum off-take, no contractual cap
Propylene
~50% from ADNOC Refining
and -50% from internal Borouge sources
No minimum off-take, no contractual cap
Contract
Start Date
Contract
End Date
Contracts entered in October 1998, with amendments to reflect the additional volume requirements
Current Feedstock Supply Agreement until 2057, includes a re-pricing mechanism due to take effect in late November 2027,
(pricing mechanism due to be reviewed again in June 2045)
Pricing
Mechanism
•
Until November 2027
Ethane price formula based on PE and PP
prices with a floor and a cap
From December 2027 onwards
•
Ethane price formula based on PE prices with a
floor and a cap reset upwards
•
Price based on local netback
Key
Observations
on Pricing
Mechanism
.
•
Ethane price effectively capped at the ceiling;
2021A PE and PP prices >20% above the cap
Current ethane price formula positions Borouge
as one of the lowest cost PE producers globally
.
2021A PE price implies an ethane price at the
mid-point of the range
Revised price formula expected to position
Borouge in the first quartile of the PE cost curve
Local netback prices are -25% lower than
market benchmarks
Sources: Company Information
35 Corporate Presentation | April 2022
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