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Mark Garrett, Borealis Chief Executive.
Mark Garrett, Borealis Chief Executive.
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Polyolefins specialist Borealis announced a record net profit of €1.107 billion in 2016, a 12% increase compared with €988 million in the previous year.

The improved result over 2016 was driven by overall stronger margins in the polyolefins business and an improved contribution from Borouge, following the successful completion of the Borouge 3 project, according to the company.

The contribution from Base Chemicals was lower compared to 2015 as a result of weak demand and low prices in the fertilizer business.

"2016 was a very strong year for Borealis of which all our people should be proud. Whilst we do not expect to repeat the 2016 result in 2017, we still expect 2017 to be a very solid year, with Borealis remaining in the top echelon of profitable companies," said Mark Garrett, Borealis Chief Executive.

Borouge, Borealis' joint venture with the Abu Dhabi National Oil Company (ADNOC) in Abu Dhabi, United Arab Emirates (UAE), successfully completed its mega project Borouge 3.

After the start-up of its cross linked polyethylene (XLPE) plant, Borouge saw the first XLPE compounds based on Borealis' proprietary Borlink technology being manufactured at the Borouge 3 expansion plant in Ruwais, UAE.

Next steps for Borouge include optimizing Borouge 1, 2 and 3 and building another polypropylene (PP) plant, PP5. Pending approval of the project in 2017, PP5 could be up and running by around 2020.

"During 2017 we expect significant capacities to start coming on stream in North America. North America will become a significant net exporter in the coming years and it would be naïve to think that this won't affect us; it's simply the nature of our cyclical business. Our challenge at Borealis is to invest intelligently in a counter cyclical manner as we did in Borouge 3. 2017 will also be more challenging for Borealis due to the intensive turn-around schedule, involving five locations," commented Garrett.

Borouge said it will find more ways to create values by stretching the oil barrel. This means the cracking of naphtha and perhaps of other mixed feeds, and converting these to downstream products.

Cracking could be done in a facility called Borouge 4. If the Borouge 4 project meets the approval of shareholders, it would be by far the most ambitious and challenging petrochemicals project that it has ever undertaken, according to the company.

In September 2016, Borealis announced the feasibility study for a new, world-scale propane dehydrogenation (PDH) plant. The plant would be located at the existing Borealis production site in Kallo, Belgium.

The final investment decision is expected to be taken in the third quarter of 2018, while the potential start-up of the plant is scheduled for the second half of 2021. The new PDH plant would have a targeted annual production capacity of 740 kilo tons per calendar year.

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