The Future of Energy: Sustainable, Affordable, Secure Strategically taking place before COP27, ADIPEC is the global platform for leaders to reinforce commitments that will drive the industry towards reducing emissions, meeting decarbonisation goals, and providing a realistic view on short- and long-term energy outlooks. Supported By 31 October - 3 November 2022 Abu Dhabi, United Arab Emirates Strategic Conference View the Strategic Conference Programme www.adipec.com/strategicprogramme Innovation and the energy transition: pioneering a new era of technology development The road to COP27 and COP28 The long-term impacts of geopolitics on the global economy and energy industry The new management agenda: future workforce and the leaders of tomorrow An industry transitioning: adapting to the new fundamentals of supply, low carbon and new energy solutions • Offshore & Marine Conference • Strategic Conference • Forum for Diversity, Equity & Inclusion Conference • Downstream Technical Conference • Smart Manufacturing Strategic & Technical Conferences • Technical Conference STRATEGIC CONFERENCE THEMES: 8 CONFERENCES AT ADIPEC: • Decarbonisation ConferenceeNEW Gold Sponsors Partners Venue Partner Host City Strategic Insights Partner Technical Conference Organised By Official Hotel Partner ADIPEC Brought To You By Decarbonisation Zone Partner Hydrogen PartnerNEWS 05 Check out all the major action that took place regionally and globally in the downstream industry OPINION 10 How the scale of digitalisation in refineries is getting bigger September 2022 VOLUME 15 / ISSUE 09 NET-ZERO COMMITMENT 24 Fuels produced from plant-based feedstock could satisfy up to 30% of transportation demand by 2030 and may help countries meet environmental goals INDUSTRY OUTLOOK 32 Nine new refinery projects are begining operation or are schedule to come online by 2023 end, and increased supply could put pressure on margins next year PROJECT LISTINGS 39 The major downstream projects taking place across the region REGULARS 32 05 12 24 12 COVER STORY In-depth anlysis on how the global downstream industry is gearing up to counter increasingly sophisticated cyber attacks 20 SPECIAL FEATURE A special feature on how the second half of the current year is going to challenge most downstream companies 20 3 Refi ning & Petrochemicals Middle East September 2022www.refi ningandpetrochemicalsme.com ContentsAugmenting cyber defences Published by and © 2022 ITP MEDIA GROUP FZ-LLC. PO Box 500024, Dubai, UAE Tel: +971 4 444 3000 Web: www.itp.com Offices in Abu Dhabi, Dubai, London & Mumbai ITP Media Group CEO Ali Akawi Managing Director Alex Reeve Deputy Managing Director Nicky Dawson Editorial Group Editor Carla Sertin Editor Deepak Sharma Tel: +971 4 444 3617 email: deepak.sharma@itp.com Art Art Director Amjad Ayche Designer Tofiq Memon Photography Photographer: Julius Garcia Videographer: Muhammad Kaleem Video Editor: Liju Cheruvathur ITP Live General Manager Ahmad Bashour Tel: +971 4 444 3549 email: ahmad.bashour@itp.com Production & Distribution Group Production & Distribution Director Kyle Smith Production Manager Denny Kollannoor Production Coordinator Manoj Mahadevan Senior Image Editor Emmalyn Robles Circulation Circulation Executive Rajesh Pillai Distribution Coordinator Avinash Pereira Marketing Director of Awards & Marketing Daniel Fewtrell ITP Group CEO Ali Akawi CFO Toby Jay Spencer-Davies Subscribe online at www.itp.net/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. Deepak Sharma Editor Refining & Petrochemicals Middle East It has become increasingly evident that the COVID-19 pandemic has fundamentally altered the modus operandi of many organisations and has accelerated digitalisation across all industries including oil & gas. As the whole energy sector (including exploration, production, transportation and refi ning) is becoming increasingly digital to achieve revenue and effi ciency gains, there is a corresponding need to identify cyber threats at their earliest stages, going beyond compliance regulations to secure operations. According to refi ning and petrochemical industry experts, while online attacks are nothing new, what is diff erent now is the scale of the risk and impact, which is directly related to the scale of digital connectivity and the massive ecosystem changes resulting from digitalisation, decentralisation and energy transition. These cyber-attacks are becoming increasingly sophisticated, diffi cult to detect, and devastating. The key stakeholders in the downstream industry are very concerned that these cyber adversaries can not only disrupt the day-to-day operations but they also can bring the whole regional energy ecosystem to a halt. Moreover, the gap between the capabilities of GCC organisations and their adversaries in cyberspace represents a tangible risk, and it is growing steadily. To close this gap, downstream companies need to take a strategic approach to rethink and revamp their cyber-security eff orts. Organisations can better defend their systems by taking a proactive approach and implementing precautionary measures to prevent any breaches from succeeding in the fi rst place. 4 www.refi ningandpetrochemicalsme.com Editor’s Comment Refi ning & Petrochemicals Middle East September 2022For all the latest refining and petrochemical news from the Middle East, visit our website: www.refiningandpetrochemicalsme.com Saudi Aramco sets a new record with $48.4 billion quarterly profi t Petrochemical giant SABIC posts a near 4% rise in Q2 net profi t Driven by a surge in key product prices along with the increased sales volumes, the Middle East’s largest petrochemical company, SABIC, reported a 3.8% increase in its second-quarter net profi t. SABIC’s net profi t after zakat (donations) and taxes for the quarter ended in June 2022, rose to $2.1 billion (Saudi Riyal 7.93 billion), beating analysts’ average estimate of Saudi Riyal 5.9 billion, the petrochemical major said in a statement. Most analysts had forecasted an over 20% decline in the net profi t along with a 25.7% surge in sales to $14.93 billion. The Riyadh-based company attributed the results to higher average selling prices and sales volume, despite an increase in feedstock prices and selling expenses. SABIC said that the average sales prices in the second quarter of 2022 increased by 3% compared with the fi rst quarter of 2022. “Sales volumes also increased by 3% in the second quarter of 2022 compared with the fi rst quarter of 2022. For the fi rst six months of 2022, average sales prices increased by 26% and sales volumes increased by 10% compared with the fi rst six months of 2021,” the statement noted. While declaring the results, Yousef Abdullah Al-Benyan, SABIC’s vice chairman and chief executive offi cer, said: “The second quarter strong fi nancial results demonstrate SABIC’s robust operational performance across the diff erent segments.” He explained, “Our commitment to sustainability and innovation was evident through winning two silver and three bronze awards in the prestigious Edison Awards. These awards also refl ect our commitment to helping achieve our long-term objective of carbon neutrality by 2050”. Saudi oil giant Aramco reported a whopping 90% surge in the second-quarter net income and record half-year results on Sunday, as high oil prices continue to drive historic revenues for Big Oil. The results set a new quarterly earnings record for the company since its initial public off ering in 2019, and were primarily driven by higher crude oil prices and volumes sold, and higher refi ning margins. Aramco achieved a record quarterly and half-year net income of $48.4 billion in the second quarter and $87.9 billion in the fi rst half of 2022, compared to $25.5 billion and $47.2 billion, respectively, for the same periods in 2021. The increase in both periods was primarily driven by higher crude oil prices and volumes sold, as well as strong refi ning margins during the second quarter and higher downstream margins in the fi rst half of 2022. Aramco also declared a dividend of $18.8 billion for the second quarter, to be paid in Q3 2022. In addition, and as previously disclosed in its 2021 annual report, the company distributed bonus shares to shareholders in Q2 2022, at a rate of one share for every 10 shares held. Commenting on results Aramco president & CEO Amin H Nasser, said: “Our record second-quarter results refl ect increasing demand for our products particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry.” He added: “While global market volatility and economic uncertainty remain, events during the fi rst half of this year support our view that ongoing investment in our industry is essential — both to help ensure markets remain well supplied and to facilitate an orderly energy transition. 5 Refi ning & Petrochemicals Middle East September 2022www.refi ningandpetrochemicalsme.com UpdateAnchor selects four global firms for Egypt’s $2 bn industrial project L&T commissions green hydrogen plant in Indian state of Gujarat Anchorage Investments, which develops, implements, and operates industrial projects in the chemicals and blue hydrogen sectors, has shortlisted four international contractors in the second phase of the EPC (engineering, procurement, and construction) tender for the Anchor Benitoite project in Egypt. The $2 billion project comprises a chemicals complex that will be built in the industrial zone of the General Authority for the Suez Canal Economic Zone (SCZONE) in Egypt, Anchorage Investments said in a statement. Indian EPC major, Larsen & Toubro (L&T) commissions a green hydrogen plant at its AM Naik Heavy Engineering Complex in the country’s western state of Gujarat. “The production of green hydrogen based on an alkaline electrolysis process has begun last week,” L&T wrote in a statement. The plant will produce 45 Kg of green hydrogen on a daily basis, which will be used for captive consumption in the company’s Hazira manufacturing complex, the statement noted. As per the company, the green hydrogen plant is designed for an electrolyser capacity of 800 KW comprising both alkaline (380 KW) and PEM (420 KW) technologies. It will be powered by a rooftop solar plant of 990KW peak DC capacity and a 500KW per hour battery energy storage system (BESS). “The plant is spread across 3000 square metres, and the fi rst phase of The four shortlisted companies are Hyundai Engineering & Construction Co (HDEC), Samsung Engineering Co, TECHNIP ENERGIES SpA, and TECNICAS REUNIDAS SA of Spain, the statement noted. Each company is experienced in the applications of propane dehydrogenation (PDH) and polypropylene, Anchorage said while explaining that the fi rms were selected based on a thorough evaluation process which included strict criteria and a scoring system. the project has been installed, tested, and commissioned,” the statement noted. As per the company, the scope involves the generation of high purity green hydrogen (99.99%) and oxygen, and their captive consumption in the manufacturing shops. As per the statement, a blend of 15% hydrogen with natural gas will be used as a fuel, and oxygen will supplement the existing usage in cutting and welding applications. To ensure safe operation and production, the plant design incorporates both active and passive safety systems and will be operated through state-of- the-art control systems with remote monitoring functionality, the company said. Moreover, an integrated data analytics platform “The successful contractor, selected in the fi nal stage of the tender, will be responsible for executing the Front-End Engineering Design (FEED) phase, followed by the full engineering, procurement, construction, commissioning, and launch of operations,” the company said. Scheduled to be completed within three years after the FEED phase, the project aims to contribute to Egypt’s GDP, and increase its chemical exports and foreign direct investments, it added. Commenting on the development Dr Ahmed Moharram, founder and managing director of Anchorage Investments, said: “The international companies that qualifi ed for the second phase are world-class contractors who have proven track records and global experience. “Our selection refl ects how Anchorage Investments is keen to make the Anchor Benitoite project a lighthouse project that meets international standards and delivers for investors who are looking to strengthen their presence in Egypt.” Several Saudi Arabian companies signed agreements in June to invest $7.7 billion in Egypt, with Saudi Arabia expressing its intention to allocate $30 billion of investments in the North African country. designed by L&T will provide insights into the performance of the electrolysers and the overall plant. As part of its ESG commitments, L&T has pledged to achieve water neutrality by 2035 and carbon neutrality by 2040 by making green hydrogen an integral part of its clean fuel adoption policy. 6News Refi ning & Petrochemicals Middle East September 2022www.refi ningandpetrochemicalsme.comIndian refi ners cut crude oil purchases from Russia in July Oman’s NGC plans to exit UAE operations Oman’s National Gas Company (NGC), the leading liquefi ed petroleum gas (LPG) marketer in the Sultanate, is exiting the UAE market on the non-availability of additional supplies coupled with the reduction in margins. “Considering the non-availability of LPG supplies from Oman for exports and the oversupply of gas in the UAE market, causing the continuous reduction in margins, the company has decided to exit its operations in the UAE region,” NGC said in fi ling to the local bourse Muscat Stock Exchange. NGC explains that the decision to exit the UAE market is in tune with its business expansion and continuity of policy and has been taken after closely monitoring the Indian refi ning companies cut down Russia crude purchases in July, the fi rst time since March along with its overall purchase while supplies from Saudi Arabia rebounded for the fi rst in fi ve months, data from trade and industry sources revealed. Indian refi ners lifted more term crude supplies from Saudi Arabia as prices were attractive while prices for Russian supplies have climbed on robust demand, the data showed. “India shipped in 877,400 barrels per day (bpd) oil from Russia in July, a decline of about 7.3% from June, with Moscow continuing as its second-biggest oil supplier after Iraq,” a Reuters report said quoting trade data. Refi ners in India are snapping up discounted Russian oil after some Western countries and companies shunned purchases from Moscow over its late-February confl ict with Ukraine, the report said. Overall India, the world’s third-biggest oil importer and consumer, shipped in 3.2% less oil in July at 4.63 million bpd from June as some refi neries planned maintenance turnaround from August, the data showed. India’s oil imports from Saudi Arabia rose by 25.6% to 824,700 bpd in July, the highest in three months, the data showed, after the producer lowered the offi cial selling price (OSPs) in June and July compared with May. Saudi Arabia stayed at the third spot among India’s crude suppliers. Trade data also showed that the share of Middle East oil in India’s overall imports declined marginally in July as the nation cut purchases from Iraq by 9.3% from June to below the one million bpb mark for the fi rst time in 10 months. market positions year-over-year, where the rebound in the scenario is not expected in the short or medium term. The Sultanate-based company said pursuant to its decision, the company has also decided to shut down its subsidiary NGC Energy and Dubai-based Arabian Oil LLC. The company has investest around AED 0.6 million so far in both companies. According to a report by Muscat Daily newspaper, National Gas operates LPG fi lling plants and is engaged in the marketing and selling of LPG in the Sultanate. National Gas Company’s UAE business has been consistently witnessing dropping realisations despite signifi cant quantity ramp-ups in the wake of tough business conditions, the report said quoting its quarterly fi nancial report. India has raised imports of Russia’s diesel- rich ESPO grade and that could further dent the purchase of similar grades from West Africa. Reuters report said that ESPO is cheaper than Brent-linked Atlantic basin crude as it is sold at a discount to Dubai oil. 7News Refi ning & Petrochemicals Middle East September 2022www.refi ningandpetrochemicalsme.comADNOC Distribution to acquire 50% stake in TotalEnergies’ fuel retail business in Egypt Aramco and Sinopec sign MoU to collaborate on projects in Saudi Arabia State-owned oil giant Saudi Arabian Oil Company (Aramco) has signed a Memorandum of Understanding (MoU) with China Petroleum & Chemical Corporation (Sinopec) covering multiple areas of potential collaboration between the parties in Saudi Arabia. “The MoU outlines pathways for strategic cooperation between Aramco and Sinopec and supports the long-term relationship between the two companies and ADNOC Distribution, the UAE’s largest fuel and retail distributor, has signed an agreement with TotalEnergies Marketing Afrique SAS to acquire a 50% stake in TotalEnergies Marketing Egypt LLC for approximately $186 million, with an additional earn-out of up to $17.3 million subject to certain conditions. “The acquisition marks another important milestone in the delivery of ADNOC Distribution’s expansion plans,” ADNOC wrote in a statement. Explaining the terms of the acquisition, the company said the partnership with TotalEnergies, a leading global multi-energy company with a strong brand and successful track record in Egypt, includes a diversifi ed portfolio comprising 240 fuel retail stations, over 100 convenience stores, and over 250 lube changing stations along with wholesale fuel, aviation fuel, and lubricant operations. “Through this deal, ADNOC Distribution and TotalEnergies will develop future growth opportunities of TotalEnergies Egypt through unlocking value potential and exploring benefi cial synergies in fuel distribution, lubricants and aviation businesses driven by economic growth and post COVID recovery,” the UAE fuel retailer said. Following the acquisition, they will refurbish several stations to have full ADNOC branding, with certain future sites being constructed under the ADNOC brand, off ering a robust foothold in a fast-growing fuel retail market in Egypt, the UAE-based fi rm said.“The acquisition is expected to be completed in Q1 2023 pending satisfaction of certain conditions, including customary their existing joint ventures in China and in the Kingdom,” Aramco wrote in a statement posted on its website. Mohammed Y Al Qahtani, Aramco senior vice president of downstream, said: “We are delighted to be able to extend our relationship with Sinopec and leverage our mutual strength and reach while creating a path to bring our long-standing cooperation in China to our facilities in Saudi Arabia. This latest collaboration will help to further advance our strategic relationship with Sinopec into key areas of mutual benefi t within the Kingdom.” Agreeing with this, Yu Baocai, president of Sinopec Corp, said: “Aramco is a very important partner of Sinopec. The two companies have yielded fruitful collaborations and developed a deep friendship over the years. He explained that the signing of the MoU introduces a new chapter of our partnership in the Kingdom. The two companies will join hands in renewing the vitality and scoring new progress of the Belt and Road Initiative and Vision 2030.” regulatory approvals,” the statement noted. Commenting on the development, Dr Sultan Ahmed Al Jaber, UAE’s minister of industry and advanced technology, managing director and group CEO of ADNOC, said, “This acquisition marks a signifi cant milestone in ADNOC Distribution’s international growth story.” He said the acquisition is also well aligned with the Industrial Partnership for Sustainable Economic Growth between the UAE, Bahrain, Egypt, and Jordan. 8News Refi ning & Petrochemicals Middle East September 2022www.refi ningandpetrochemicalsme.comTHE ULTIMATE UTILITIES SOURCE Utilities-me.com is home to the Middle East’s utilities industry’s top news, analyses, insights and opinions Special Reports Receive monthly reports and analyses on various trending topics pertaining to the utilities industry. Awards Take advantage of early bird access to be first in line for the industry-leading Middle East Energy Awards. 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