< Previous30 ENERGY TRANSITION oilandgasmiddleeast.com JULY 2023 A mid a global growing population and the deepening climate crisis, the energy sector sits at the heart of the duality of rising energy demands and the urgent need to cut emissions. As preparations for this year’s Conference of the Parties’ summit COP28 ramp up, all eyes will be on the energy industry and its ability to simultaneously address these two challenges. It is estimated that energy now accounts for more than two-thirds of total greenhouse gas emissions (dominated by carbon dioxide) globally . In its latest report , the Intergovernmental Panel on Climate Change (IPCC) brings into sharp focus the losses and damages from global warming-related events such as flooding, extreme heat and droughts. It also makes it clear that taking actions towards decarbonization now could result THE ROAD TO COP28: ENERGY COMPANIES’ INTEGRAL ROLE IN THE GLOBAL CLIMATE FIGHT As COP28 approaches, the energy sector faces the critical challenge of meeting rising energy demands while cutting emissions By: George Bou Mitri, vice president and general manager of MENA, Performance Materials and Technologies, Honeywell in the transformational change essential for a sustainable and equitable world. To help realize that vision, the energy sector must deploy the right technologies to maximize the efficiency of its operations and ensure the resulting efficiency improvements can be accurately measured and reported. At the same time, it needs to find pragmatic solutions for delivering the energy the world needs today, while simultaneously advancing new, environmentally preferable sources of energy at a commercial scale. This can only be achieved with intensive support from the public sector through the right combination of policies, incentives and investments to ensure that the new and emerging technologies charged with delivering this transformation can thrive. SUSTAINABLE ENERGY TRANSITION Until recently, the benefits of Industry 4.0 to the energy sector were predominantly discussed in the context of yield optimization and cost reduction through digitalization. There is, however, also a close synergy between digitalization and sustainability. Connected, digitalized operations represent a ‘ready-now’ solution that can unmask hidden efficiency wins, set ambitious yet achievable energy savings targets and report on performance. Consequently the energy sector, which has historically been heavily reliant on manual, analogue processes, must now accelerate its digitalization journey under a strategy of not only productivity and cost optimization, but of emissions and energy management too. BALANCING ENERGY DEMAND AND SUSTAINABILITY Today’s energy landscape reflects a growing demand for energy, accelerated by the perfect storm of post-pandemic recovery, the fast-growth industrialization of developing nations, a growing population and an energy scramble resulting from continued global political unrest. Demands on the energy sector to provide the energy the world needs continue to increase, alongside the urgent need to meet such demands in new, more efficient ways. Alongside steadily increasing the percentage of renewable and transitional energy sources, the public and private sectors must work together to deploy the right infrastructure to support a more George Bou Mitri, vice president and general manager of MENA, Performance Materials and Technologies, Honeywell31 ENERGY TRANSITION oilandgasmiddleeast.com JULY 2023 that are available, and all parties must work together to ensure they can quickly be brought to market at scale and with the right economics in place. It is therefore imperative that events such as the U.N.’s climate change conferences continue to provide the optimum conditions for the deal-making that can accelerate the mainstream deployment of new energy technologies. THE MIDDLE EAST’S POSITION ON A GLOBAL STAGE For the second year running, the U.N. summit will be held in the Middle East – a region that has a long history of leadership in finding solutions to the world’s energy demands. The Middle East’s energy companies have the domain knowledge and resources to deploy new technologies at scale, alongside environmentally favorable mix — including deployment of grid management and energy storage technologies capable of supporting the peaks and troughs of renewable-derived power. Energy companies can leverage new refining solutions and also convert their existing units to produce alternative products such as Sustainable Aviation Fuel (SAF). They can also take advantage of carbon capture technologies that, in the case of fossil fuel-derived energy, can also produce blue hydrogen as a by-product – an important bridge towards a green hydrogen-based economy. And there is also the extensive carbon reduction impact generated through the adoption of newer refrigeration solutions that offer ultra-low global warming potentials. There are already numerous solutions established international technology partners that have the market understanding to operate effectively in-line with the region’s national visions. They also enjoy the intensive backing of a public sector that has made clear its desire to ensure the potential of these new technologies is fully realized. There is no one silver bullet that represents the future of our energy supply. Energy companies will continue to meet the world’s power requirements, but the mechanisms for how they do it are evolving dramatically. It is through global platforms such as this year’s COP28 that the Middle East’s energy companies have the perfect opportunity to demonstrate their leadership in this evolution, in coordination with the sector’s other private and public stakeholders, to ensure it happens as quickly, sustainably and equitably as possible. 32 ENERGY TRANSITION oilandgasmiddleeast.com JULY 2023 W hile the horrific COVID-19 catastrophe may be what many remember about 2020, it was also a historic year for global energy transition and the advancement of hydrogen technology. In connecting their pandemic response with longer-term aims, many governments announced efforts to utilize hydrogen as a vital energy source. Parallel to this, many nations, cities, and businesses declared net-zero goals for energy-related carbon dioxide emissions, highlighting the need for hydrogen. Hydrogen is grouped into three categories—grey, blue and green— depending on how it is produced. Grey hydrogen is created from natural gas, or methane, using steam methane reformation but without capturing the greenhouse gases made in the process. Blue hydrogen on the other hand is grey hydrogen but with carbon capture and storage (CCS). At the end of the green scale is green hydrogen, produced using clean energy. Energy transition is a process, not a destination. Therefore, the use of current assets should be continued while still reducing Green House Gas (GHG) emissions by retrofitting facilities with CCS. This is a way to manufacture hydrogen with fewer GHG emissions while increasing renewable energy capacity. Blue hydrogen in particular could promote the development of a hydrogen market in the early phases of the energy transition. Notably, industrial activities like steel manufacturing need a constant GREEN HYDROGEN: THE FUTURE IS HERE With growing momentum and falling costs, the future of green hydrogen looks promising, but strategic business models are crucial for equitable global adoption By: Manish Laligam, Managing Director, Protiviti Member Firm, Middle East Region Co-founder, Pimlico Partners flow of hydrogen; blue hydrogen could be a starting point, while producers ramp up production and storage capacity for green hydrogen to satisfy the continuous flow demand. Ultimately, the only type of hydrogen that is suited for an entirely sustainable energy transition is green hydrogen. Water electrolysis, powered by renewable electricity, is the most viable technological alternative for creating green hydrogen in the long term. There are various ways to manufacture hydrogen that rely on renewable energy, but apart from gasification using biogases, all technologies have yet to reach commercial maturity. However, low-cost solar and wind energy and technology advancements are bringing down the price of producing green hydrogen. These factors have boosted interest in green hydrogen produced by water electrolysis. Over the past two years, momentum has grown, with more than 25 nations either adopting or declaring their desire to adopt national hydrogen strategies. By 2026, industry investors anticipate having at least 25 gigawatts of green hydrogen electrolyzer capacity. To achieve aggressive climate objectives and keep the increase in average world temperatures at 1.5 degrees Celsius, much steeper growth is still required in both renewable energy sources and green hydrogen capacity. Within a decade, the cost of the generated green hydrogen might drop to below $1-2 per kilogram, which would be competitive. These pave the way for Manish Laligam, Managing Director, Protiviti Member Firm, Middle East Region33 ENERGY TRANSITION oilandgasmiddleeast.com JULY 2023 future potential. Meanwhile, Germany’s Uniper SE has teamed up with Masdar, one of the Middle East’s biggest renewable- energy firms, to produce green hydrogen in the UAE. The two companies will build a plant that will run on almost 1.3 gigawatts of solar power and is expected to produce hydrogen from 2026. In Saudi Arabia, utility developer ACWA Power last year signed financing agreements for $8.5 billion in investment for a large- scale hydrogen project expected to be commissioned in 2026. Green hydrogen policies should be created to enable comparison with other increased manufacturing capacity, new employment opportunities, and economic expansion. But to get there, it is necessary to choose the best business model, build markets, and optimize the supply chain so that both developed and developing countries benefit equally from switching to a clean, reliable energy system. The GCC has emerged as an epicenter of the global green hydrogen revolution. The UAE will launch its National Hydrogen Strategy next month, establishing a framework to position the country as an exporter of clean fuel and tap into its energy sources, ensure consistency and compatibility with emissions for other commodities, and enables understanding of the impact of this energy carrier by policymakers and end users. Such policies provide the framework for national hydrogen strategies that specify a nation’s ambition for hydrogen and the level of assistance necessary to meet that ambition. They work as a guide for private operators in the hydrogen sector, aiding in the promotion of higher levels of financing. Ultimately, well-defined steps should be taken to increase hydrogen adoption through effective national policies. 34 OPINION oilandgasmiddleeast.com JULY 2023 THE ONLY CHEMISTRY THAT MATTERS FOR A SUSTAINABLE FUTURE Discover how SABIC, the largest petrochemical company in the Middle East, is making a significant impact on humanity through its commitment to sustainable solutions By: SABIC Staff I f you are reading this article on computer, there is a good chance its casing is made from a material manufactured by SABIC, as is your computer screen. Perhaps your hand is resting on a mouse, which historically was made from virgin plastic, but thanks to us, it’s now manufactured from ocean- bound plastic. The ways that we at SABIC are impacting humanity, today and in the future, are many. That is what our mantra ‘Chemistry that Matters’ is all about. And at SABIC, every day we work to find solutions that will tackle problems as diverse as climate 35 OPINION oilandgasmiddleeast.com JULY 2023 education. We are also excited to continue to share our vision for the future, and to demonstrate how our range of products and services are not just changing things in our industry, but for the global community. There are a few notable examples of our work to highlight in these areas. One of the direct consequences of climate change, with the rise in extreme weather patterns and temperature peaks, is food insecurity. At the same time as our ability to produce food is threatened, the number of people we need to feed is growing fast with an expected population of 9.7 billion by 2050. In response we have produced a portfolio of bio-enhanced fertilizers as part of our Agri-Nutrients research and development efforts that are enabling farmers throughout the U.S., Africa, Middle and the Far East to overcome extreme climate conditions. Our solutions are customized to regional and crop-specific needs, and they are resulting in reinvigorated crop yields at this very moment. We understand that it’s no good making a product that drives sustainability if the process of making the product itself is unsustainable. That’s why our Agri- Nutrient portfolio is centered around bio- enhanced fertilizers that have a smaller environmental footprint – meaning fewer air pollutants and less run-off. Plastics play a critical role in our lives, but at the same time, recycling is an area in which we have a responsibility to drive progress. UNESCO estimates plastic waste makes up 80% of all marine pollution and around eight to ten million metric tons of plastic ends up in the ocean each year. It is because of this challenge that we created TRUCIRCLE™, a key element of SABIC’s vision for the future in which plastic never ends up in the environment, landfills, or our oceans, and instead is reused and remade into new products. Since launching, TRUCIRCLE™ products of recycled polymers has transformed packaging and consumer goods across a range of sectors. From the first-ever mass retail, certified carbon-neutral toy line from Mattel to Mars’ KIND® healthy snack bar wrapper to even Microsoft’s computer mouse made with recycled ocean plastics, TRUCIRCLE™ is working closely with change, water conservation and food security. This is the ethos we continue to work toward. Throughout the year, we engage with business leaders, government officials and international organizations to discuss how we can work together to implement sustainable solutions that will have a positive impact on humanity. We at SABIC, the largest petrochemical company in the Middle East, are honored to join with others in our industry to address four priority focus areas where we can drive action on finding needed solutions for the future – AI, healthcare, sustainability, and customers and partners on important initiatives and helping to realize the SABIC vision where plastics are reused and remade into new and useful products. Our commitment to a circular economy for plastics requires a total transformation of the value chain. To that end, SABIC has launched one of the world’s first pilot programs using blockchain technologies to enable the tracking and tracing of materials throughout the recycling process, enabling manufacturers to track plastics sourced from around the world. One of the greatest areas of progress in the coming decades will be in the world’s transition to electric vehicles. We specifically created our BLUEHERO™ initiative to accelerate this transition in support of global goals on climate change, such as the United Nations Sustainable Development Goals. The program is starting by galvanizing the automotive industry’s mission to create better, safer, and more efficient electric vehicles (EVs). SABIC’s emphasis on optimizing key EV components in a cost effective and technologically advanced way is catalysing not only vehicle performance, but also the broader industry’s shift to electrification. Together with our partners and customers, SABIC is more committed than ever at confronting important challenges for the future. At SABIC, we have a responsibly to be more than a chemical producer; we are a solutions provider, and we will continue to make chemistry that matters to people and impacts their lives. SABIC Research Laboratory, Netherlands36 EMISSIONS oilandgasmiddleeast.com JULY 2023 A s some of the world’s largest hydrocarbon producers and exporters, Middle Eastern countries are also amongst the globe’s biggest polluters. According to the World Bank, Qatar had the highest carbon emissions per capita as of last year, followed by Kuwait, Bahrain, the United Arab Emirates and Saudi Arabia. The Gulf states are warning against a quick transition away from hydrocarbons, with the UAE calling for a “mixed energy” approach that minimises emissions without cutting hydrocarbons. This approach sees decarbonisation initiatives gathering pace due to ENERGY ASSESSMENTS DRIVING EMISSIONS AND COST SAVINGS FOR MIDDLE EAST OPERATORS ENERGY ASSESSMENT PROTOCOL To support the global energy industry to take this first step in understanding its baseline, the emissions team at Xodus has developed a unique energy assessment protocol which has been implemented on more than 200 sites globally. What is unique about this approach is that the in house team works collaboratively with end clients to provide tailored solutions to increase the production and export of gas, and the optimisation of maintenance requirements. The assessments take approximately five days. The process involves a site visit by both rotating equipmet and control specialists and assistance from process and electrical Xodus has developed a unique energy assessment protocol that has been implemented on more than 200 sites globally By: Dr. Natasha Howlett, Emissions and Climate Division Manager, Xodus environmental regulations becoming stricter around the world as well as companies vying to be at the forefront of emission-reduction initiatives. To be able to make progress and understand the exact challenge ahead, companies must identify their emissions baseline and review their plant performance in realtion to emissions. Whilst this process helps identify a wide range of improvement opportunities, how best to prioritise these for implementation in order to decarbonise a portfolio of assets requires experience and knowledge on what really is a good return on investment.37 EMISSIONS oilandgasmiddleeast.com JULY 2023 ULTIMATELY, PERFORMING AN ENERGY ASSESSMENT FOR YOUR PLANT WILL PAY FOR ITSELF specialists as required. The emphasis is put on the team physically inspecting the asset and talking to the client’s teams to gain an in-depth understanding of the emissions profile and any optimisation potential. This process usually begins by establishing an asset specific emissions profile followed by a series of workshops to identify emissions reduction opportunities. These findings are then ranked using proprietary software tools to create a ‘master plan’ of potential opportunities and their associated cost and CO2 equivalent savings. Natasha Howlett, Emissions & Climate Division Manager at Xodus said: “A thorough understanding of a company’s current greenhouse gas (GHG) footprint is fundamental in identifying effective emissions-reduction and cost-saving opportunities. This baseline serves as the foundation for planning and ensures consistent tracking of progress moving forward. “Typically, energy saving opportunities of up to 20% are identified during the energy assessments. Our experts then work closely with operational teams through site visits, workshops and ongoing communication to really understand the client’s emissions portfolio and their vision for a net-zero future. A report is then created including a list of recommendations, including both ‘easy fixes’ and longer term solutions. A few examples of the type of opportunities identified are listed below: • Re-map of centrifugal compressor reducing power demand by over 2.5 MW and significantly reducing fuel gas usage • Identified valve passing gas to flare, allowing 17 te/d of gas to be recovered and sold • Process control tuning and configuration, reducing flaring and slugging and allowing increased oil production The opportunities identifed during this unique assessment are listed in terms of their benefits and the likely returns, with the emphasis being on three distinct modes of application for the equipment: • Delivering low-cost solutions that are easily implemented • Adopting easily implemented “smart” software • Major capital expenditures ENERGY ASSESSMENTS IN ACTION Xodus recently completed a GHG emissions baseline and energy efficiency review for a Middle East operator’s fleet of drilling rigs where more than 25 energy, emissions, and cost savings opportunities were identified per asset. These opportunities represented a credible roadmap for a 60% reduction in total CO2 emissions for the operator, with more than 20% of these easily implementable with low or no CAPEX required. The review also outlined potential overall cost savings of up to $28 million per year. The extensive work scope was built upon previous work completed by Xodus and focused on four key elements: a boundary, reporting and legislation review; an emissions baseline assessment; offshore site visits and opportunity identification; and an emissions reduction roadmap development. Natasha added: “We worked collaboratively with the client to deliver a study that has strengthened their understanding of scope 1 emissions and laid the foundations for the development of a robust, achievable, and sustainable GHG emissions and energy efficiency framework to realise their net-zero goals. “Utilizing the Digital Emissions Reduction Action Plan, our proprietary digital solution which is designed to intuitively rank and prioritise emissions reduction opportunities, allowed us to deliver a credible emissions reduction Natasha Howlett, Emissions and Climate Division Manager, Xodus roadmap. This considered interactions and conflicts between reduction opportunities, ensuring that the roadmap is realistic and achievable in order to deliver emissions and cost reductions.” The company has built up a wealth of experience and learnings from developing more than 200 emissions reductions strategies globally and is using these learnings to support Middle East operators as they strive to meet new country-level targets being set. TWO-FOLD SAVINGS Natasha added: “The advantages of an energy assessment are two-fold – both in terms of emissions savings and cost savings, as most gas which is not flared can be sold. “There is also a knock-on effect on production optimisation and efficiency, increasing uptime and, ultimately reducing the need for maintenance. “Ultimately, performing an energy assessment for your plant will pay for itself. If we could develop a commercial model which would allow us to claim even 1% of the cost savings we identify during an energy assessment, we’d have all retired to the Caribbean by the age of 40, that is how confident we are in our methodology. “While the environmental and emissions reduction potential cannot be understated, it simply makes sense from a business perspective. The cost savings are significant and go hand in hand wth immediate emissions reductions.” 38 LAUNCH oilandgasmiddleeast.com JULY 2023 DMS Universe, a strategic online platform designed exclusively for the energy industry, has officially been launched. Created to foster interaction, engagement, and collaboration among millions of engineers globally, DMS Universe aims to revolutionise the way professionals in the energy sector connect and share knowledge. DMS Universe serves as a centralized hub for engineers, end users, EPCs (Engineering, Procurement, and Construction companies), and vendors to come together and thrive in the digital era. The platform offers a wide range of features that cater to the specific needs of industry professionals, while also addressing the challenges faced in today›s disruptive landscape. President and CEO of DMS Universe, Mohammed (Mo) Loch, commented, “At DMS UNIVERSE LAUNCHES REVOLUTIONARY PLATFORM TO CONNECT ENERGY PROFESSIONALS WORLDWIDE professionals from diverse departments within the energy industry, including sales, marketing, business development, engineering, operations, maintenance, projects, HSE, supply chain, and IT. By bridging these departments, DMS Universe provides a collaborative environment where users can access cutting-edge knowledge, engage in fruitful discussions, and form valuable connections.” One of the key features of DMS Universe is the DMS Chat, a communication tool that enables seamless and real-time interaction among industry colleagues. Whether it›s seeking advice, sharing insights, or discussing the latest technologies, DMS Chat facilitates instant and efficient communication, fostering a sense of community within the energy industry. Additionally, the platform offers Virtual Show Rooms, which serve as virtual marketplaces where vendors can showcase their products and services. Engineers and professionals can explore an extensive range of offerings from renowned vendors such as Aveva, MSA Safety, Pepperl+Fuchs, Phoenix Contact, Samson, Schneider, and Vega. With the ability to browse and discover products all in one location, DMS Universe simplifies the procurement process and accelerates business growth. Mo Loch went on to add, “To further enhance collaboration and knowledge sharing, DMS Universe introduces Technical & Procurement Interest Groups. These specialized groups create focused communities for professionals with specific technical or procurement interests. Engaging in these groups allows participants to delve deeper into their areas of expertise, exchange valuable insights, and stay updated on the latest industry trends.” Moreover, DMS Universe will host a series of virtual events and Webinars, bringing together industry experts, thought leaders, and professionals to share their expertise and experiences. As part of its commitment to facilitate industry-wide connectivity, DMS Universe offers free access to end users and EPCs, and invites professionals from national oil companies, service majors, contractors, and other organizations to join the platform. To register and create an account, visit www. dmsuniverse.com and sign up using your company’s email address. President and CEO of DMS Universe, Mohammed (Mo) Loch the core of DMS Universe is the vision to connect projects, HSE, supply ch bridging these departmen provides a collaborativ where users can acce knowledge, engage in fru and form valuable connec key DMS the comm that and inter indus Whe advic insig t t fSocial Virtual Showrooms Technical - Showcase and market your products. - Locate and identify agents who match the needs of your products both globally and locally. ͨėǏñŪĐğėƣğñƛĐłȌşƯğƛƣƯŵȌŪėñŪǖƘƛŵėƷĐƯĎǖ make, company, category & industry standards. - View a vast source of product information, ƣƘğĐňȌĐñƯňŵŪƣ͓śğǖͨƛğşñƯğėǐğĎňŪñƛƣñŪė associated marketing material all at the touch of a button. - Control who can see your material with highly advanced security settings to protect your activity and data – you and you alone dictate and tailor your visibility. TECHNICAL GROUPS - Discuss vital topics of the moment, brainstorm ňėğñƣñŪėȌŪėƣŵşƷƯňŵŪƣǐňƯłĹğşşŵǐňŪėƷƣƯƛǖ professionals. PROCUREMENT GROUPS - Interact and engage with EPC Procurement Teams around the world. - Procurement, Vendor Registration & RFQ’s through the platform is our ultimate vision for the future. BUILD YOUR NETWORK & ADD CONNECTIONS - Connect & interact with industry professionals 24 hours a day, 365 days a year. CREATE YOUR PROFILE - Upload pictures. - Update your status & personalize your news feed. - Share comments and pose questions to your network. - Instant chat & video calling. EVENTS - Extensive archives comprising of both past and upcoming events. - Event gallery, agendas, speakers & presentations. - View past webinar recordings as and when is convenient for you. - Register instantly for upcoming webinars. - Access full list of attendees. A Division of DMS Global WLL Mohammed Loch CONTACT President & CEO - DMS GlobalEmail - mloch@dmsglobal.net UAE Cell & +971 50 3123510 +971 249 161 71 (UAE Office) +973 17 405 590 (Bahrain Office) Exclusive Energy Industry CommunityNext >