ADNOC Distribution and Abu Dhabi Ports have signed a Musataha Agreement (the legal right to build on and retain the building on another person's land for a fixed term of years), which is aimed to strengthen ADNOC Distribution's capacity to develop new projects at Khalifa Industrial Zone, Kizad, and provide logistical support to its existing developments.
Saeed Mubarak Al Rashidi, Acting Chief Executive Officer of ADNOC Distribution and Mana Mohammed Saeed Al Mulla, Chief Executive Officer of Kizad, signed the agreement at ADNOC Distribution's headquarters in Abu Dhabi. The signing of the agreement was witnessed by a number of officials and senior members of both parties.
The agreement will strengthen ADNOC Distribution's efforts to meet the demand for its services and products while meeting the requirements of Abu Dhabi Vision 2030. ADNOC Distribution will begin to implement a plan to set up a lubricant and grease plant, as well as strategic storage warehouses to support product distribution operations in different emirates. The company will commence operations in the new location by the beginning of 2022.
The initial production capacity of the plant will reach 100,000 tonnes per year, with the possibility to boost production up to 200,000 tonnes per year in the future. The main products output from the plant include vehicle lubricants, marine lubricants, industrial lubricants, greases and various specialty fluids.
The storage warehouses will increase ADNOC Distribution's ability to supply Abu Dhabi with different fuel products such as diesel, E Plus-91, and Special 95 using cargo trucks. It will also supply Abu Dhabi International Airport and Al Maktoum International Airport with Jet-A1 fuel as well as Gas-Oil to Al Taweelah Power and Desalination Complex via pipelines.
Commenting on the agreement, Saeed Mubarak Al Rashidi, Acting Chief Executive Officer of ADNOC Distribution, said, "Within ADNOC Distribution's future strategic plan, we have clear direction for expansion, both geographically and qualitatively, in terms of the products, services and facilities we provide. As part of our objective to achieve the best results, we are keen to enter strategic partnerships and implement a range of specialised and targeted studies to search for opportunities that will support our need to meet the growing demand for our products and services.
Al Rashidi added, "Due to our belief in the importance of Abu Dhabi's national economic agenda and in promoting partnership initiatives between different economic and investment bodies, we look at this agreement with Abu Dhabi Ports as a way to achieve the highest levels of economic value for both parties. This will be done through moving some of our operational facilities to the new site and establishing new expansive platforms, and by taking advantage of the high level infrastructures of Kizad, which can support hosted industrial and investment projects of various sectors in the region and globally."
Commenting on the agreement, Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, said, "ADNOC Distribution's decision to be present at Kizad is a substantial and supportive move to Abu Dhabi's economic growth and a vital addition to our strategic partners. We are confident that the strategic geographical location near Khalifa Port, and what Kizad has to offer in terms of logistical services and world-class infrastructure, will support ADNOC Distribution's ability to meet the huge demand for petroleum products, which is one of the most prominent elements of economic and industrial projects."
According to the plans approved by ADNOC Distribution, the storage capacity to be provided by the new warehouse at Kizad will be 545,000 cubic meters, of which 75,000 cubic meters will be dedicated to storage of fuel such as E Plus-91. 105,000 cubic meters will store the Special 95, 180,000 cubic meters will be for diesel fuel, and 180,000 cubic meters will be for fuel for Jet A1 fuel. This repository is expected to serve as a full back-up in case of any disruption of operations at the existing Mussafah Terminal.
Through the agreement, ADNOC Distribution will allocate three logistical shipping lanes of which the first is linked to Khalifa Port, the second parallels the main logistical lane in Kizad, while the third has been allocated to running outside of the industrial zone. The terms of the agreement also include the allocation of a jetty at Khalifa Port to receive shipments of petroleum products from the Ruwais refinery.