Co2 based solutions, the game changer in the Middle East
Archived, originally published in April 2016
The hydrocarbon industry is going through an extended cycle of correction and the headwinds not only are putting downwards pressure on the growth and financial metrics all around but also impacting the projects and initiatives that are essential to the long term strategic objectives. The much-needed growth on one hand and the strong drive towards a low carbon industry, on the other hand, are creating a new game-changing space, which demands not only close collaboration but also innovative solutions and that is where Linde Engineering's President & CEO of the Middle East & North Africa, Ali Vezvaei, believes the firm is well-positioned to play a pioneering role and deliver value.
Linde Engineering is the technology and execution arm of Germany's Linde Group, the world's largest gases and engineering company.
“We design and build various plants on turn-key EPC basis ranging from industrial and speciality gases, natural gas processing and LNG facilities all the way to the mega crackers in the petrochemical sector. The broad portfolio is further enhanced by several in-house technologies and vast operational experience thanks to the group's gases operations. This distinguishes us from the other players,” explained Vezvaei.
“We have been present in Middle East for several decades and have had the honour of being involved in a number of flagship projects in the region; to name but a few I can mention Sadara, Borouge's crackers no. 1, 2 & 3 (the world's largest ethane cracker), SABIC's United CO2 plant (the world's largest purification and liquefaction), Shell's Pearl air separation plants and Tasnee Cracker,” he said.
Linde Engineering's primary focus is handling the gases; whether processing, treatment, separation or LNG which are on the cold front or the cracking which is on the other end of the temperature spectrum, the firm has been a technology pioneer in the gases industry for more than a century. These technologies are translated into hundreds of projects from small Adsorption or mini LNG units where the modularisation and speed play a key role all the way to the world-scale projects where the combination of engineering excellence and project management expertise are the main building blocks of a timely and on budget delivery of the projects.
“In parallel to these world-scale projects, we are also focused on smaller yet strategic regional opportunities, such as the one we have just been awarded earlier this year by Borouge; an EPC contract for the new Boil Off Gas (BOG) compressor project at the firm's petrochemical production plant in Ruwais, Abu Dhabi. The project is being managed and executed by our team in Abu Dhabi. This is part of our enhanced customer focus and localisation drive, where we aim to maximise the use of local resources in the country where we execute the projects” added Vezvaei.
CO2 set to take off
The deployment of CO2 in the hydrocarbon sector is not new. As a matter of fact, some of the EOR applications go back a couple of decades, but Vezvaei says that the industry ought to systematically transform the way in which it looks at and handles this precious molecule. “It has become an eco-commercial necessity and no longer just a stand-alone green initiative; this is what we absolutely believe in and are determined to collaborate with our clients and partners across the industry to make it happen; not only technologically but also commercially and this is the key to its sustainability.”
With increasing focus on climate change and the mounting pressure on all industries including the oil & gas sector to significantly curb the CO2 emissions and even in the next step the fugitive methane, Vezvaei believes it is going to be a different drive and surely a solid progress this time around.
“We certainly see interesting opportunities for the introduction and more importantly integration of CO2 technology based solutions that are enabling certain low carbon growth opportunities to emerge and become viable,” he said.
The Kingdom of Saudi Arabia is a prime example where the opportunities for CO2 utilisation in both up and downstream are immense. This, in conjunction with the sheer economy of scale, and the great commitment and efforts by the Ministry of Petroleum, Aramco and SABIC is going to create an unparalleled array of opportunities, according to Vezvaei.
“There is CO2 that comes from existing assets, both operating plants and gas fields. Once you manage to put in place a commercially viable solution to separate, purify and then, if required, liquefy the CO2 streams, you have unlocked the opportunity to use this valuable molecule in a variety of up and downstream applications such as EOR, energised fracking and CO2 to chemicals. This is what we at Linde offer to our partners and clients as an enabler to achieve their objectives in creating value and growth while progressing on their commitments towards a low emission industry,” he said.
Linde has recently designed and built the world's largest purification and liquefaction facility for and in cooperation with United, a SABIC's manufacturing unit in Jubail, the Kingdom of Saudi Arabia. The plant is designed to compress and purify around 1,500 TPD of raw carbon dioxide coming from two nearby ethylene glycol plants. The purified gaseous CO2 will be pipelined through the piping corridor of the Royal Commission of Jubail to three SABIC-affiliated companies for production of other chemicals. The plant will also be capable of producing 200 TPD of liquid CO2 for supply to, amongst others, the food and beverage industries. An estimated 500,000 tons of CO2 emissions will be saved each year.
CO2 is a feedstock in the production of chemicals, such as polycarbonate (PC), methanol and urea methanol is a basic commodity for the chemical industry and urea is used for fertiliser production. In addition, CEO is being used in several upstream applications such as EOR, well stimulation and also low water unconventional production.
“SABIC is creating a commercially attractive path from CO2 to other valuable products and is doing so with what we like to call Green CO2,” Vezvaei noted.
He explained: “On the upstream side, the objective is to reduce the amount of water that is needed for stimulation and fracking tight or unconventional wells through utilisation of CO2. With this we are trying to address two fundamental issues at once; the water and the CO2. And obviously this has a huge relevance to Middle East.”
Linde is one of the front runners when it comes to the CO2 technology, value chain and also the interface with the oil and gas industry that is aimed at enabling multiple applications including the unconventional. The firm is determined to build on and expand this game changing solution also to the Middle East region.
Network of industrial gases, latent synergy and a lot more
Another area that has the potential to create growth and deliver value, in the region in general and in the Kingdom of Saudi Arabia in particular, is in the industrial gases sector. In parallel to the growth of downstream industry, the industrial gases business in the region also expanded. However this gradual growth was more organic and reactive and not systematically optimised. With the current magnitude and spread of the sources and sinks of the industrial gases, for example hydrogen, along with the pressure on optimal and strategic use of natural gas, there is an opportunity for firms like Linde Group to leverage the technology and operational excellence and take the region's industrial gases play to the next level.
“If you look at Saudi, they have developed a vast industrial cluster in Jubail 1 and are in the progress of expanding the Jubail II and Yanub. There are multiple plants that some produce and some consume these gases. Here the integration through a network is very synergetic and operationally prudent; particularly when taking into account the need for optimisation in natural gas consumption which in being consumed to produce for example hydrogen. Imagine what can be done with the natural gas that would be liberated and saved if we could optimise the supply and demand of hydrogen across Jubail industrial cluster,” he said.
For Vezvaei this gives Linde hope because “with the right strategy, commitment and of course right technology and operational expertise, this could unlock some potential that was never tapped into before.”
Furthermore, Linde believes that this approach can be expanded around the region. Perhaps to realise a regional network in the future.
Impact of low oil price
No different from the rest of the industry, Linde Group has also felt the pressure of the low oil price environment but Vezvaei sees it as an opportunity for a transformation. “Never let a good crisis go to waste,” he noted.
“It is of course painful for any industry to cope with such downturns; however the over proportionate impact felt by the hydrocarbon industry is partly due to the fact that cost and productivity have gone the wrong way in the past years. Unnecessary complexity that were added to the projects, multiple norms and un-harmonised processes across the industry that are not necessarily conducive to standardisation and productivity, the much needed elements to make us once again competitive and efficient. These are some of the elements that have been adversely weighing on the industry and it is upon us to use this challenging period as an opportunity to collaborate across on a united purpose; to reinvent ourselves, cut cost and improve the economics. We have done in the past and I am confident we can do it again, together,” he added.