Magazine - construction

NEWS, DATA AND ANALYSIS FOR THE REFINING AND PETROCHEMICAL INDUSTRIES OCTOBER 2013An ITP Business Publication

SAI LI NG EAST: %PXOTUSFBNTQFOEJOHSFTVQUISPVHIPVU UIF.JEEMF&BTUBOE&BTUFSONBSLFUTBT&VSPQFBOSFOFSTDPOUJOVFUPTUSVHHMFXJUIFDPOPNJDTUBHOBUJPO

QATAR PROFILE HOW QATAR IS

DIVERSIFYING ITS EXPORT REVENUES TO EMBRACE NEW REALITIES IN THE

GLOBAL MARKET P20

RPME reveals the downstream contractors who scooped the most prestigious deals this year

ALSO INSIDE: OIL&GAS MIDDLE EAST AWARDS - DOWNSTREAM SPENDING HEADS

EAST - DR. SADOUN, GPCA ON THE POWER OF PLASTICS

DownstreamContractors

1Contents

Published by and 2013 ITP Business Publishing, a member of the ITP Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.

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CONTENTS

COMMENT

02-07 Regional Update08-11 Sector Newsround12 Kit We Like16 GPCA Dr. Sadouns Column 20 Qatar Country Focus 24 Top 10 Downstream EPCs 38 Case Study: Asia & The .JEEMF&BTU5IF/FX3FlOJOH

Human Resources and Training Development Downstream Career Development Covered

GPCA PreviewIndustry leaders gather in Dubai for the annual petrochemicals forum

OPEX Preview Region to discuss operational excellence in Abu Dhabi

Top 10 Downstream EPCsA look at the regions most

active EPC Contractors

The Oil&Gas Middle East awards is just around the corner, have you

booked your ticket yet?

Case Study &VSPQFBOSFlOFSTCPXEPXOto the Middle East and Asia

VOLUME 06 Issue 10

FEATURES

UPCOMING FEATURES IN THE NOVEMBER ISSUE

FIND OUT MORE AT: ARABIANOILANDGAS.COM

REGULARS

Going into the fourth and nal quarter of the year is exciting, especially for the regions energy sector. With MEPEC now behind us, and ADIPEC just around the corner, there is always something to keep us busy. Speaking of staying busy, this month we take a look at which of the regions EPC have been most active with our exciting Top 10 Downstream EPC Contractors list. As downstream spending shifts from the West towards the East markets, its no wonder why more and more engineers and service companies are coming our way. Jyotsna Ravishankar, Editor

The downstream sector is being blown forward with an easterly wind

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*URXS6DOHV'LUHFWRU Gary RobinsonTel: +971 4 444 3482 / [email protected] AlloushTel: +971 4 444 3173 / [email protected]$GYHUWLVLQJ

'LUHFWRUPeter Conmy 'LJLWDO3XEOLVKLQJ'LUHFWRU Ahmad BashourTel: 00971 4 444 3549, email: [email protected] B2B Digital Riad RaadTel: 00971 4 444 3319, email: [email protected] 6WXGLR

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&LUFXODWLRQ&XVWRPHU6HUYLFHTel: +971 4 444 3000

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18

For the latest news please visit: www.arabianoilandgas.com

2BUBS$PVOUSZ1SPlMF The Gulf State grows its

downstream investments

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,VXBJUT/BUJPOBM1FUSPMFVN$PPSEFSTTVQQMZGPSIJHIWPMUBHFTVCTUBUJPOTBUSFlOFSJFTSiemens inks $240m KNPC deal

S iemens has been awarded a turnkey contract by the Kuwait

National Petroleum Co., known as KNPC, to supply high-voltage VXEVWDWLRQVDWUHQHULHVsouth of the city of Kuwait.

The project, valued at $240 million, will provide reliable power supply to two of KNPCs biggest UHQHULHV 7KH SURMHFW LVscheduled for completion in December 2015.

Under the contract, one of the largest for the Sie-mens Energy Transmis-sion business in Kuwait, Siemens will supply and install a 132kV substation AHRF C at the Mina Al $KPDGL 5HQHU\ 0$$and a 300/132kV substa-tion MARF W at the 0LQD $EGXOOD 5HQHU\0$% LQFOXGLQJ KLJKvoltage cable connections.7KH ZRUNV ZLOO W LQ

with KNPCs Clean Fu-els Project, which will see a major upgrade and

expansion of the MAA DQG 0$% UHQHULHV WRintegrate the companys 5HQLQJ 6\VWHP LQWR RQH5HQLQJ&RPSOH[

The Clean Fuels Project seeks to make fuel pro-duction in Kuwait more environmentally-friendly.

Siemens is proud to be supplying the latest high-voltage technol-ogy to KNPC, said Adrian Wood, CEO of Siemens EES, the Kuwaiti unit of Siemens AG. This proj-ect will both enhance

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and make sure a reliable power supply is available to help Kuwait meet its future market demand for transport fuels by 2020, as it seeks to increase processing capacity at its UHQHULHV

Prior to this contract, Siemens supplied many industrial steam turbines and compressors to KNPC IRUXVHLQWKHLURLOUHQHU\projects, and implement-ed substation works at a number of downstream facilites in Kuwait.

Siemens is proud to be supplying the latest high-voltage technology to KNPC Adrian Wood, CEO of Siemens, EES

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For the latest news please visit: www.arabianoilandgas.com

News02

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013 www.arabianoilandgas.com

Total has agreed to buy Chevrons Egyptian retail and aviation segments

Total SA, has agreed to buy Chevron Corp.s Egypt retail and aviation business.

The French oil company and Beltone Private Equity managed funds will acquire 66 service stations, two oil depots and aviation fuel operations at the Cairo and Marsa Alam airports. Combined, the operations have an annual sales volume in excess of 1.4 million tons.Once thet two transactions close, Total Egypt will become To-tal Groups biggest marketing and services subsidiary outside of Europe, with annual sales exceeding 3 million tons. It will have an estimaed network share of 14% after its entwork triples in size from 75 to 218 service stations, with a shift towards more urbanised areas and along main road corridors, where purchasing power is higher.

Acquisitions of this type and our recent investment in the new Borg El Arab lubricant blending plant un-derscore the importance of our commitment to Egypt, commented Momar Nguer, senior VP of Africa/Middle East of Total Marketing & Services.

Total SA looks to grow retail presence in Egypt

Due to the rapid urbanisation and mod-ernisation, the plastics industry in the GCC counties is booming with annual production expected to increase from the current 15 million tonnes to 25 million tonnes by 2015. But this has raised concerns about waste pro-duction, about 12 million tonnes of waste are generated in Abu Dhabi every year, says a report by Borouge.

Borouge is currently expanding the annual capacity of its plastics manufacturing plant in Abu Dhabi from 2 to 4.5 million tonnes per year to meet the growing demands of the infrastructure, automotive and advanced packag-ing markets in the Middle East and Asia.

Plastics production grows despite waste increase

RETAIL EXPANSION

ENVIRONMENT

RISING

FALLING

Prince Abdulaziz to deliver inaugural

address at GPCA

Total buys Chevrons

Egyptian and aviation business

GCC plans to increase annual production to 25

million tonnes by 2015

Shell and DMC agree to explore

future of LNG opportunities in

the UAE

Indian imports of Iranian crude

fall 40% over twelve months

Sadara to build Hydrogen

Peroxide plant in KSA

$13 billion downstream

project derailed in China

About 12 million tonnes of waste is generated in Abu

Dhabi per year

Frances Total will acquire 66 service stations from Chevron in Egypt.

The Gulf region will continue to expand its plastics production capacity.

A $13 billion project to EXLOG D UHQHU\ DQGSHWURFKHPLFDOplant in eastern China involving Royal Dutch Shell has been shelved after losing political support, Re-uters has reported.

The plant in the eastern city of 7DL]KRX D WLHXS ZLWK &KLQHVH VWDWHEDFNHG RLO UPChina National Petroleum Corp (CNPC) and Gulf energy JLDQW4DWDU3HWUROHXPZRXOGKDYHUHQHGPLOOLRQtons of crude and produced 1.2 million tons of ethylene a year. Construction had been due to start last year.

The newspaper said the project appeared to have fallen victim to local opposition and politics. It quoted a senior petrochemical executive as saying the Chinese had con-UPHG WKH SURMHFW KDG EHHQ FDQFHOOHG SRVVLEO\ GXH WRland problems.A second source told the newspaper the project would be permanently suspended.

A Shell spokesman told the Telegraph that the com-pany was still conducting a feasibility study into the proj-ect. Shell and CNPC could not be reached for comment. A government probe into corruption at CNPC widened at WKHHQGRI$XJXVWZLWKWKUHHVHQLRURIFLDOVDWWKHHQHUJ\giant being investigated over alleged wrongdoing.

20

$13 bln downstream project blocked in China

5IFSFlOFSZXPVMEhave processed this many million tonnes of crude per annum

PROJECT

News04


GPCA to receive Saudi Prince Abdulaziz for leading GCC petchem growth

ONLINE POLL

50

H . R . H Prince Abdulaziz bin Salman Bin Abdulaziz, Saudi Arabias Deputy Minister of Petroleum and Mineral Resources, will deliver the inaugural address of the 8th Annual GPCA Forum.

Receiving His Royal Highness at our eighth annual gathering will of-fer rare insight into the strategies needed for the sustainable growth of the petrochemicals industry, said Dr. Abdulwahab Al Sadoun, Secretary Gen-eral of the GPCA.

Saudi Arabia accounts for 67 per cent of the GCCs petrochemicals production, with an out-put of 86.4 million tons in 2012, a year-on-year increase of 6 million tons of capacity.

The GCC sector as a whole, saw remarkable growth of 5.5 per cent last year, a marked improve-ment compared with the previous year. It gener-ated sales revenue close to $82 billion, despite the on-going recession in Eu-rope and a slow-down in the Asian economies.

Which country do downstream suppliers want to do business in?

Now online: Which GCC country will see the highest downstream spending for 2013 H2? Visit: www.arabianoilandgas.comIrans investment climate hasnt improved & petchem business takes a hit.

H.R.H. Abdulaziz bin Salman Bin Abdulaziz, KSA Deputy Petroleum Minister.

INAUGURATION

BASF has offered to buy Verenium Corp for approxi-mately $62 million.

BASF has entered into an agree-ment to commence a cash tender offer for all of the outstanding shares of common stock of the bio-technology company Verenium Corporation for $4 per share. Based on all outstanding shares and including DOO QHW QDQFLDO OLDELOLWLHV WKH HQWHUSULVH YDOXH ZRXOGbe approximately $62 million. Combining Vereniums VFLHQWLFDQGWHFKQRORJLFDODVVHWVZLWK%$6)VHQ]\PHactivities will strengthen BASFs footprint in the strate-gic enzyme growth market.

H.R. Abdulaziz to deliver inaugural address at GPCA

BASF to grow enzyme segment with acquisition

per cent stake of Arya Sasol Polymer sold for an undisclosed fee

INVESTMENT

OMAN KSA QATAR UAE

NEWSMAKER

In his new role, Abbott will become a member of the Companys Executive Committee and will take over from Ben van Beur-den who, as previously an-nounced, becomes Chief ([HFXWLYH 2IFHU ZLWK HI-fect from January 1, 2014.

John is a British nation-al and currently Executive VP Manufacturing, re-sponsible for some 30 oil UHQHULHVDQGSHWURFKHPL-cals plants world-wide. He joined Shell in 1981, and has held a variety of management positions in UHQLQJ FKHPLFDOV DQGupstream heavy oil, work-ing in the United King-dom, Singapore, Thailand, the Netherlands, Canada, and the United States. John graduated from Bir-mingham University, UK in 1981 with a degree in Chemical Engineering.

He is a Fellow of the Institute of Chemical En-gineers as well as a Char-tered Engineer and Char-tered Scientist.

Shells DirectorDownstream: John Abbott takes over

05News

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013www.arabianoilandgas.com

In terms of growth projections, key markets like the UAE, Saudi Arabia and Qatar are a priority for us. We are also exploring unmet needs in Iraq and Libya

HOWARD UNGERLEIDER EXEC. VP, DOW

BAPCO is implementing a comprehensive programme to create some of the worlds most sophisticated SFOFSJFTt

EBRAHIM TALIB, DEPUTY CHIEF EXEC. FOR REFINING, BAPCO

A new petchem plant could leave Rosneft short on eastbound obligations

Platts has reported that Rosnefts crude production will likely fall short of its obligations for eastbound supplies by some 3.9 million mt/year by 2020, according to estimates by Russias national oil pipeline RSHUDWRU7UDQVQHIW7KHGHFLWZLOOEHHYHQKLJKHUDWPLOOLRQPW\HDULI5RVQHIWJRHVDKHDGZLWKDSODQQHGUHQHU\DQGSHWURFKHPLFDOFRPSOH[LQWKH)DU(DVW7UDQVQHIWV93$OH[HL6DSVDLVDLGDWDPLQLVWHULDOPHHWLQJ7KRVHHVWLPDWHVDUHEDVHGRQGDWDWKDW5RVQHIWRIFLDOO\SUHVHQWHGWR7UDQVQHIWKHVDLG5RVQHIWVFUXGHSURGXFWLRQGHVWLQHGIRUHDVWZDUGVXSSOLHVLVSURMHFWHGDWPLOOLRQPWin 2020, he said, adding that this estimate did not take into account any production from OLFHQVHGDUHDVKHOGE\WKHFRPSDQ\WKDWDUHLQHDUO\H[SORUDWLRQVWDJHVFXUUHQWO\5RVQHIWLVWRVXSSO\PLOOLRQPW\HDURIFUXGHWRWKH$VLDQPDUNHWVYLDWKHSRUWRI.R]PLQRRQWKH3DFLFFRDVW,IWKHGHFLVLRQLVWDNHQWREXLOGWKH)DU(DVWHUQ3HWURFKHPLFDO&RPSOH[5RVQHIWVWRWDOHDVWERXQGGHOLYHULHVVKRXOGJURZWRPLOOLRQPW\HDUKHVDLG

Rosneft delivery fears

The Oil&Gas Middle East Awards 2013 judging panel has met to pick a win-ner for the 10 judges categories.

The awards lunch and judging afternoon cre-DWHGVRPXFKH[FLWHPHQWstunning and well-written nominations in most cat-egories were an absolute GHOLJKW WR JR RYHU VR WKHjudges agreed.

The elite judges panel spent a good couple of KRXUV SRXULQJ RYHU WKHnominations. The after-noon was spent picking a QDOLVW :KLOH WKH VKRUW-list was a combined de-FLVLRQ HDFK ZLQQHU ZDVchosen by the judges in-dependently and the win-ners will be named at the DZDUGV2FWWK

Judges panel NBLFTlOBMcall on awards

AWARDS

DISTRIBUTION

IN QUOTES

Our second quarter earnings were down from the very strong

level of a year ago

JOHN WATSON, CEO AND CHAIRMAN,

CHEVRON

The regions biggest awards night

Rosneft crude production could be short this many mt/year by 2020.

3.9m

News06


Indian imports of Iranian crude have fallen

RYHUDWZHOYHPRQWKSHULRGGHVSLWHRQHUHQHUUHVXP-ing purchases after a four-month break. Indian intake fell by 40 per cent compared to September, 2012, pushed down by international sanctions against Iran. The sanctions have made it more GLIFXOW WR LQVXUH UHQHULHV DQGships involved in the trade and forced some oil payments to be made in repuees. Indias oil Minister Veerappa Molly says he wants Iranian oil imports up at 260,000 bpd.

Indian imports of Iranian crude drop over year

Iranian crude imports to India hit hard by international sanctions.

Iranian Oil Minister, Bijan Namdar Zanganeh has expressed his goals of doubling the countrys annual petrochemicals output to $40 billion. The minister is also visiting New York with Irans President Hasan Rouhani to invite foreign investment into the countrys ailing industries. (Getty)

Indias intake of Iranian oil is down more than this much from last year

SANCTIONS

40%

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07News

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013www.arabianPJMBOEHBT.com

Carling to become the European centre for polymers

Total has an-nounced plans to spend $211 mil-lion before 2016 on upgrades for its petrochemical platform in Carling, in the Lorraine region of eastern France.

Total plans indeed to develop new activities on the platform in the growing markets for hydro-carbon resins (Cray Valley) and for polymers, while shutting down the acutely loss-making steam cracker in the second half of 2015, the company said in a statement. In this way, Carling will become a leading European center in the hydrocarbon resins and polymers market, it continued.

Total has a project for the fu-ture of the Carling petrochemical platform and the surrounding re-gion, explains Patrick Pouyann, 3UHVLGHQW 5HQLQJ &KHPLFDOVand member of the Executive

Committee of Total.As European markets begin to

recover from the economic crisis, there will be growing demand for UHQHGDQGGRZQVWUHDPSURGXFWVA growing share of this demand is EHLQJPHWE\UHQHUVDQGSHWFKHPcompanies from other regions.

The European petrochemicals market is facing continued overca-pacity and growing international competition. In such context, it is our industrial responsibility to an-ticipate and adapt our production capacities to demand. Our project for Carling will leverage the plat-forms strengths, its industrial ca-pabilities and the expertise of its WHDPVLQRUGHUWRGHYHORSDSURW-able production facility.

By making Carling the Euro-pean center for the hydrocarbon resin business and a leading Eu-ropean polymers plant as part of an extensive investment plan, we DUH FRQUPLQJ RXU ZLOOLQJQHVV WRmaintain sustainable industrial ac-tivities in France while investing in promising markets. Total is bring-ing a new ambition to Carling.

Total signs $211m petchem upgradeNEW CONTRACT

NEW BUILD

$211 mlnTotal will spend this much to upgrade its SFlOFSZJO$BSMJOH-PSSBJOF

Saudi Hydrogen Peroxide Company, a newly created joint venture between Sadara Chemical Com-pany (Sadara) and the Solvay Group (Solvay), has begun constructing one of the worlds largest hydrogen perox-ide (HP) plants in the Kingdom of Saudi Arabia.

The plant will provide a key raw material to Sadara and will strengthen Solvays global leadership position in HP technology and markets.

With a capacity exceeding 300,000 metric tons per year (MT/yr) and a planned start up in 2015, the mega plant is being built at Sadaras chemical complex in Jubail Industrial City II. 7KLVSURMHFWZLOOEHWKHUVW+3IDFLOLW\ LQWKH.LQJ-

dom.Sadara will use output from the plant as a raw mate-

rial for the HP-to-propylene oxide (HPPO) manufactur-ing plant on the site, thereby supporting its propylene oxide (PO) derivative units that produce polyols and propylene glycol.

For Solvay, this will be its third joint venture mega HP plant following the 230,000 MT/yr plant in Antwerp, Belgium, a JV with The Dow Chemical Company (Dow) and BASF, and the 330,000 MT/yr mega plant in Map Ta Phut, Thailand, a JV with Dow.

SADARA JV with Solvay to build HP plant in KSA

BASF opened a new production plant for concrete admixtures in Kazan, Russia. Together with the facility inaugurated in Podolsk near Moscow in 2012, BASF now supplies the Russian construction sec-tor with a broad range of concrete admixtures from two production sites. At its Kazan site, BASF manufactures 20 varieties of concrete admixtures, including latest-generation prod-ucts based on polycarboxylate ether (PCE) technology.

BASF opens Kazan con-crete admixtures plant1BUSJDL1PVZBOO1SFTJEFOU3FlOJOH$IFNJDBMTBOENFNCFSPGUIF&YFDVUJWF$PNNJUUFFGPS5PUBM

#"4'T,B[BOTJUFXJMMNBOVGBDUVSFWBSJFUJFTPGDPODSFUFBENJYUVSFT

PROJECT ONLINE

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013 XXXBSBCJBOoilandgasDPN

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RUNVisit us at GITEX 2013. Mobile, Apps & Content Zone, Hall 6, Stand 16.

Opportunity can appear out of nowhere. With SAP mobile solutions, your people can takeadvantage of serendipity remotely, easily and securely. Use analytics to validate a

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Petrofac enters JV with Linde AG and GS to work on downstream project in Kazakhstan

Petrofac in consortium with Linde AG and GS Engineering & Con-struction Corporation have been engaged by KLPE to provide services in rela-tion to development of its Integrated Petrochemicals Complex and Infrastruc-ture (IPCI) project, situ-ated in Kazakhstan.7KH PLOOLRQ UVW

phase of the contract, valued at approximately $21 million for Petro-facs share, will involve the consortium undertak-ing engineering work on an Open Book Estimate (OBE). Petrofac will lead the consortium for the ex-ecution of the IPCI project and subject to satisfactory conclusion of the OBE and successful contract con-version, it is contemplated

that the IPCI project will move into a second phase, in excess of $3.5 billion, for a polyethylene plant com-prising two streams each producing 400,000 tonnes per annum of product.

The eventual scope for the IPCI petrochemical project will include the EPCC of a gas plant, eth-ane cracker, gas pipelines, polyethylene plants and associated utilities and offsites in the Tengiz and Karabatan areas.

Separately, in July Petrofacs Integrated Ener-gy Services business signed an MOU with KazMunaiGas Exploration Production to explore EOR production options from the mature (PED HOGV RI .0* (3V100 per cent subsidiary EmbaMunaiGas JSC.

Petrofac led consortium win

Petrofac will lead the consortium to execute the IPCA project in Kazakhstan.

NEW CONTRACT

Operations & Maintenance

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013 www.arabianPJMBOEHBT.com

Troubleshooting Condition Based Maintenance Predictive Maintenance Proactive Asset Management

Give your plant maintenance and integrity teams the MIDAS TOUCH to help them with:

Score Diagnostics LimitedIan Davidson BuildingWellbank, PeterheadAberdeenshireAB42 3AESCOTLANDTel: + 44 (0) 1779 480000Fax: + 44 (0) 1779 481100

Score Middle EastPBU - ZG7PO Box 261906JAFZA NorthJebel Ali Free ZoneDubai, UAETel: +971 (0)4 8030000Fax: +971 (0)4 8876829

The MIDAS range of products, designed and developed by Score Group plc, has been developed to give operators and technicians the opportunity to establish valve performance over time from a non-invasive view. This allows customers to view actual valve performance in real time and focus on condition based maintenance. Consistent monitoring over time facilitates a step change to predictive and pro-active

maintenance in the longer term.

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10

$3.4 bln 4.9% 98 mln 20Newly formed DNV GL Group will have revenues of this much per year

Kuwaits trade surplus with Japan narrowed by this much in August

Japan imported this many barrels of crude from Kuwait in 2012

Dubai Maritime World offers this many ship repair parcels

IN NUMBERS

Kuwaits trade surplus with Japan nar-rowed 4.9 per cent in August to $949 million shrink-LQJIRUWKHUVWWLPHLQIRXUPRQWKVDVLPSRUWVJUHZaccording to the countrys Finance Ministry.&UXGHRLOUHQHGSURGXFWVOLTXHHGQDWXUDOJDV

/1*DQGRWKHUQDWXUDOUHVRXUFHVZKLFKDFFRXQWHGIRUSHUFHQWRIWKHUHJLRQVWRWDOH[SRUWVWR-DSDQsoared 21 percent on the year.

Japanese utilities companies have increased fuel LPSRUWV IRU WKHUPDOSRZHUJHQHUDWLRQDVDOORIWKHQDWLRQVQXFOHDUUHDFWRUVKDYHEHHQWDNHQRILQHThe decision to switch away from nuclear power in -DSDQIROORZHGWKHQXFOHDULQFLGHQWLQ0DUFKDW WKH )XNXVKLPD 'DLLFKL QXFOHDU SRZHU SODQWZKLFKZDV FDXVHG E\ DQ HDUWKTXDNH DQG WVXQDPLThe last of Japans nuclear power plants was taken RILQHLQ6HSWHPEHU

-DSDQLVDPDLQPDUNHWIRU.XZDLWLH[SRUWV6WD-tistics showed that the Kuwaiti exports of crude to -DSDQUHDFKHGQHDUO\PLOOLRQEDUUHOVLQ

Kuwait evens trade with JapanSHIPPING

CLEAN FUEL

Following the nuclear meltdown, Japan has sought LNG for power.

Shells MOU with Dubai Maritime City will look to promote cleaner burning fuel for maritime transport.

United Arab Emirates to explore opportunities in emerging LNG for marine transport and power markets

Shell & DMC push for LNG fuel Dubai Maritime City has signed an

MOU with Shell to explore options related to promoting alternative sources of energy such as /LTXHHG1DWXUDO*DV/1*

The primary focus would be explore opportu-QLWLHVWRHQDEOHWKHDGRSWLRQRI/1*DVDIXHOLQmarkets including marine transportation, road transportation, power and industries in the UAE DQGWKH0(1$6$UHJLRQ

The team from Shell including Roger Bounds, *OREDO+HDGRI6KHOO/1*DQG0RXQLU%RXD]L]9LFH 3UHVLGHQW &RPPHUFLDO 1HZ %XVLQHVV'HYHORSPHQWZHUHPHWE\+LV([FHOOHQF\.KD-mis Juma Buamim Chairman Drydocks World 0DULWLPH:RUOG :HDUHSULYLOHJHG WRKDYHreached this understanding with Shell in an area of mutual and topical interest of developing sus-tainable and environment friendly sources of HQHUJ\ LQ WKHPDULWLPH VHFWRU VDLG %XDPLP7KLVLVSDUWRIRXU*UHHQ,QLWLDWLYHZKLFKSUR-PRWHVYLDEOHFOHDQWUDQVSRUWDWLRQIXHOV

DNV GL will be the worlds largest ship and offshore FODVVLFDWLRQVRFLHW\WRWKHPDUL-WLPHLQGXVWU\DSURYLGHURIWHFK-nical assurance and risk man-agement services to the oil & gas industry. 7KH QHZ FRPSDQ\ IRUPDOO\

FDOOHG'19*/*URXSZLOOFRP-SULVH HPSOR\HHV DFURVVVLWHVLQPRUHWKDQFRXQ-WULHVDQGKDYHUHYHQXHVRIELOOLRQ SHU \HDU $OO FHUWLFDWHVand approvals from DNV and GL will remain valid.

DNV GL to be the worlds largest NBSJOFDFSUJlFS

MERGER


Sales & Shipments 11

12

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Equipment & Machinery

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)FBUTFOTPSIFMQTEFUFDUQSPCMFNBSFBTJOTFDPOETGPSGBTUFSSFTQPOTFBOENBJOUFOBODF

The AVEVA Laser Modeller enables rapid conversion of nearly 1,000 laser scans into intelligent, as-built 3D plant models.

As an early adopter of the AVEVA software, Costain, an Engineering Contractor, utilised the technology for a major North Sea oil & gas facility upgrade project.

Chris Bridgland, the head of Engineering Delivery at Costain said, By adopting the best technology for the job, our dedicated team of expert engineers over-came these challenges and achieved the seemingly im-possible by demonstrating impressive time and cost savings. We estimate that

we were 2-3 times quicker for pipework modelling and 4-5 times for steelwork structural engineering.

By adopting a survey to CAD technology approach, Costain was able to reduce risks such as safety, access restrictions and construction accuracy, added Fredy

Ktourza, Senior Vice President Western Europe & Africa, AVEVA. The production of an as-built 3D model of the facility allowed Costain to plan the revamp work very accu-rately, avoiding unexpected on-site PRGLFDWLRQVWKDWFRXOGKDYHUH-sulted in huge delays and costs.

By joining AVEVAs Early Adopter programme, Costain was able to take advantage of this powerful new tech-QRORJ\DKHDGRILWVRIFLDOUHOHDVHLQ2012.

Fluke Corporation introduces the Fluke VT04 Visual IR Thermometer, the latest troubleshoot-ing tool with built-in digital camera and thermal heat map overlay that bridges the gap between traditional IR thermometers and infrared cameras. Building on the extremely popular Fluke VT02, the VT04 adds PyroBlend Plus with a four-times sharper resolu-tion than the VT02 and automatic alarm features. It is the ideal frontline troubleshooting tool for electrical, industrial maintenance, HVAC/R, and automotive applications.

The ultra-compact Fluke VT04 is fully automatic with built-in intelligence, so issues can be detected instantly with no training required. Compact and DIIRUGDEOHHQRXJKWRRXWWDQHQWLUHWHDPWKHVT02 and VT04 are designed to be with you at all times as a frontline troubleshooting tool in the Middle East, said Fluke Business Unit Manager, Jay Choi.

The VT04 includes advanced alarm features for troubleshooting stubborn intermittent issues, including DKLORWHPSHUDWXUHDODUPWKDWDVKHVRQWKHVFUHHQLI

the user-selected temperature goes out of the selected range; a time-lapse image capture that can be set to capture images in 30-second to one-hour intervals; and an auto-monitor alarm that initiates image capture

automatically after a temperature alarm has been triggered, allowing users to automatically capture im-ages even while the VT04 is unattended using the universal tripod mount.

It displays and saves images as full digital, full infrared, or in three blended modes (25, 50, and 75 SHUFHQWZLWKSHUFHQWZLGHUHOGRIYLHZWKDQWKHVT02. Markers pinpoint hot and cold spots indicating the hottest and coldest temperatures on the screen. A temperature reading is provided at the center point.

Images are saved to the included micro-SD card, eliminating the need to write down single or mul-tiple measurements. The VT04 Visual IR Ther-

mometer also has a rechargeable Li-ion battery. Im-ages from the VT04 can be imported into the included SmartView analysis and reporting software, to produce professional reports that document problems detected or repairs made for management and customer review.

KIT WE LIKE...

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Laser-accurate plant design

Finding the Heat

www.wecreatechemistry.com

Most plastics dont biodegrade, but ecovio plastics from BASF disappear completely when composted in a controlled environment. Using compostable bags for collection of organic waste makes disposal more hygienic and convenient. Rather than ending up in landlls, the waste is turned into valuable compost. When the plastic bag you use today can mean a cleaner future for the environment, its because at BASF, we create chemistry.

We create chemistrythat makescompost loveplastic.

Imagine travelling around the world on a plane that powers it-self without a drop of fuel. While WKLV PD\ VRXQG OLNH D LJKW RIfancy to most people, this is the

reality for Bertrand Piccard. This summer, Piccard and business

partner Andre Borschberg, completed WKHLU UVW VRODUSRZHUHG LJKW DFURVVthe United States as part of their Solar Impulse project.

While the plane has the wingspan of a jet, it is as light as a small car, largely because the materials used to build the plane are unique.

The body is made up of polymers, commonly referred to as plastic; the lith-ium batteries that store solar energy are made up of a polymer blend; the cock-pit, wing tips and engine casings largely contain polyethane components, while the windows are made from polycarbon-ate sheets.

If the Solar Impulse aircraft were to have been built with more conventional materials like aluminium, it is quite un-likely that the plane would have taken off. Today, however this project has achieved success simply through of the use of plastics, which illustrates the out-standing capability of this petrochemi-cal product to transform our daily lives.

Recognizing the importance of plas-tics, the Gulf States are increasingly us-ing their oil wealth to manufacture poly-mer products.

In 2012, the GCC produced 20.8

How do plastics make QMBOFT ZXJUIPVUGVFM

million tonnes of polymers, representing an 18% market share of the regions petrochemi-cals portfolio. Over three quarters of GCC poly-mers are exported abroad, generating valuable revenues for the Gulf countries.

Are we, in the GCC, close to developing the materials that make up the Solar Impulse air-craft?

Perhaps, sooner than we think. The most common polymer produced in the Gulf is cur-rently polyethylene the kind of plastic used in food packaging, toys and wire insulation with 16.4 million tonnes produced last year alone. GPCA estimates forecast that polyethyl-ene is a stable product that will grow by at an average of 7% annually till 2018.

In the next few years, GCC governments will realise multi-billion dollar petrochemicals ex-pansion plans. 7KLV ZLOO HQDEOH JUHDWHU GLYHUVLFDWLRQ RI

the regions polymer products portfolio over WKHQH[WYH\HDUVWRLQFOXGHQHDUO\WZRGR]HQpolymer products, and hundreds of polymer grades.

The regions petrochemicals producers will

face challenges ahead analysts predict that the era of cheap gas is coming to an HQG&OHDUO\SURGXFHUVZLOOKDYHWRQGstrategies in every part of their business that will help them reach their potential.

From November 19- 21, the 8th GPCA Annual Forum will be held on the theme of Innovation: The Foundation for Chemical Value Chain Lead-ership. Top executives from leading petrochemical companies will provide their insights on how the industry can evolve in every aspect of their business. His Royal Highness Prince Abdulaziz bin Salman Bin Abdulaziz, Saudi Ara-bias Deputy Minister of Petroleum and Mineral Resources, will deliver the in-augural address of the 8th Annual Gulf Petrochemicals & Chemicals Association (GPCA) Forum.

Right now, the GCC petrochemical industry produces 115.9 million tonnes of products. We predict that this indus-try will grow to produce 134.5 million WRQQHV RI SURGXFWV RYHU WKH QH[W YHyears. There are two aspects to this fu-ture. One, we need to grow the produc-tion and second we need to produce innovative products that stand as a benchmark to the global petrochemical industry.

This industry has potential but we QHHGWRJXUHRXWKRZWRJURZLQDZD\that is inventive, sustainable and re-sponsible. This transformation will not happen overnight, but we do hope that you will join us on this journey.

Lets us not underestimate the power of plastics, it is cre-ating a revolution to the extent of a solar-powered plane

DR ABDULWAHAB AL-SADOUN

Dr Abdulwahab Al-Sadoun is the Secretary General of the Gulf Petrochemicals and Chemicals Association (GPCA). GPCA is a dedicated OPOQSPlUBTTPDJBUJPOTFSWJOHJUTNFNCFSTXJUIJOEVTUSZEBUBBOEJOGPSNBUJPOSFTPVSDFT*UJTUIFlSTUTVDIBTTPDJBUJPOUPSFQSFTFOUUIFJOUFSFTUTPGUIFQFUSPDIFNJDBMTBOEDIFNJDBMTJOEVTUSJFTJOUIF"SBCJBO(VMG

The regions petrochemicals producers will face challenges ahead analysts predict that the era of cheap gas is coming to an end. Clearly, producers will have UPOETUSBUFHJFTJOFWFSZpart of their business that will help them reach their potential

16

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Partner in achieving higher plant performance?

Absolutely.

ABB offers you service and support that will enhance your project from the first concept to commissioning. We as your strategic partner contribute to lasting improvements across your projects life cycle by bringing special expertise to the integrated engineering team, including multi-disciplinary experience and in-depth product and system integration knowledge. We operate locally while drawing support from our vast ABB resources around the globe. Our integrated solutions offer the industrys best availability, quality, risk reduction and information flow. www.abb.com/oilandgas

The Oil&Gas Middle East Award judges met recently to shortlist the nominations and pick winners for the 10 Judges categories. The awards lunch and judging after-

noon created so much excitement; stunning and well-written nominations in most cat-egories were an absolute delight to go over, the judges agreed.

The Oil&Gas Middle East Awards 2013 judges, Khamis bumaim, Dubai Drydocks; Louis Besland, A.T.Kearney; Abhay Bharga-va, Frost&Sullivan and Terry Willis, Energy Industries Council (UK) spent a good couple of hours pouring over the nominations.

Buamim said during the judging session that he was very impressed with the shortlist nominees for the Young Engineer category. If this is the calibre of the young engineers in the industry, I must say that the Middle East oil and gas industry is looking very healthy for years to come, he remarked.

Beslands particular favourite for the awards was the enhanced oil recovery cat-egory which he quite thought had some path-breaking nominees.

The afternoon was spent on deciding the shortlisted three nominees for each of the ten FDWHJRULHVDQGWKHQSLFNLQJWKHQDOZLQQHUWhile the shortlist was a combined decision; each winner was chosen by the judges inde-pendently and the nominee with the majority judges vote will be announced as the winner RQWKHWKRI2FWREHUDWWKH6RWHO+R-tel, Abu Dhabi.

Jyotsna Ravishankar, editor, Oil&Gas Mid-dle East thanked all the judges for taking time RWRFKRVHWKHZLQQHUVDQGPDNLQJWKHMXGJ-ing session so enjoyable and informative. All the judges agreed that the nominations were excellent and that the winner was selected based purely on the quality of the entry.

Oil&Gas Awards Luncheon The elite panel of judges met to discuss the nominations and pick the winners...

Awards Preview18


Riding the gas waveQatar continues to thrive as the world turns towards LNG as a cleaner feedstock option

By Lionel Mok

Driven by large-scale public i n f r a s t r u c t u r e spending, Qa-tars GDP is ex-

pected to grow 6.5 per cent this year, and at an even higher 6.8 per cent in 2014. According to the Qatar Economic Insight report, published by QNB, the countrys current account surplus rose by 32% of GDP spurred by record-high gas and non-oil exports this year.

The same report forecasts that the surplus is expected to remain high as a result of rising manufactured exports, primarily from the countrys downstream sector, such as Gas-to-Liquids, petrochemicals and fertilizers, not to mention that Brent crude oil prices are expected to average $105-a-barrel. Last year, Qatar allo-cated around 66.4 per cent of natural gas production to LNG for export. The report suggests that this proportion will fall slightly going forward, as Qatar

increases production to feed new GTL facilities and to meet domestic industrial and power demand, but even this is good news as GTL products prove to be more valuable on interna-tional markets.

Even with this in mind, Qa-tars LNG export revenues are unlikely to fall by much, espe-cially considering the number of new markets that it has created RYHUWKHSDVWYH\HDUV,QQatargas delivered LNG to only seven countries, but in three years, the company has tripled this number to 21, according to an interview with HE Dr. Mohammed bin Saleh Al Sada, Minister of Energy and Industry for Qatar, published in The Oil & Gas Year Qatar 2013.

Considering that global re-JDVLFDWLRQ IDFLOLWLHV IRUUHFHLY-ing LNG imports had reached a capacity of 668m tonnes by the end of 2012, compared with global LNG production of 282m tonnes, it is no sur-prise that Qatar has managed

WR QG LWV PDUNHWV VR TXLFNO\After all, Qatar alone produces approximately 77.2m tonnes of LNG, roughly 27 per cent of the worlds total.

Being the worlds largest LNG producer, we are demonstrating

Thanks to a robust economic growth and increasing populations, Asian economies are not just demanding more energy, but also DMFBOFSBOENPSFFYJCMFFOFSHZt HE DR. MOHAMMED BIN SALEH AL SADA, MINISTER OF ENERGY AND INDUSTRY FOR QATAR

Despite US shale gas finds, Qatar has not lost its

world dominance in gas sales

66.4%Qatar allocated this much of gas production to LNG

IN NUMBERS one of our fundamental mar-keting principles that Qatargas sells LNG to where it is needed the most, said Khalid Bin Khal-ifa Al-Thani, CEO of Qatargas, last year after the company an-nounced that it would supply over 20 million tonnes of LNG to Japan following the Fuku-shima nuclear disaster in 2011.

According to a keynote speech which the Minister re-cently delivered at the opening of the LNG Producer-Consumer conference in Tokyo, the growth in international demand for

Qatar20


natural gas as an energy source has been driven primarily by economic development in Asia coupled with efforts to mitigate climate change and decrease CO2 emissions.

Thanks to a robust economic growth and increasing popula-tions, Asian economies are not just demanding more energy, EXWDOVRFOHDQHUDQGPRUHH[-ible energy, he said. In 2012, Asia imported an additional 15.6 million tonnes of LNG, rep-resenting a 10 per cent increase over 2011. Asian countries

Qatar pioneered LNG sales and

GTL commericialisation in the gulf

DFFRXQWHGIRUDSSUR[LPDWHO\SHUFHQWRI/1*H[SRUWVLQEXWE\WKH$VLD3DFLFUH-gion represented 63 per cent of /1*H[SRUWV

But as the Minister pointed out, this sharp increase was due primarily to the shutdown of nuclear power plants in Japan following the Fukushima nucle-ar disaster. Now that Japan has shut down the last of its nuclear reactors, (nuclear energy pro-YLGHG DSSUR[LPDWHO\ D WKLUG RIits energy supply) the country will be looking to boost LNG

imports to meet the electricity shortfall.

Japan alone was responsible for over 50 per cent of Asian LNG consumption growth, [in 2012] but that is mostly due to the shutdown of its nuclear re-actors, the minister comment-ed. This has quickly accelerated Japan to becoming Qatars larg-est trading partner, with a total WUDGHYROXPHH[FHHGLQJELO-lion in 2012, he added.

But Qatars LNG tankers are sailing beyond Japan to coun-tries like Indonesia and Malay-sia. Attracted to stronger prices than those offered in Europe as faster economic growth contin-ues to drive demand for energy. The QNB report also highlights

Multi-billion dollar plants are in operation in Qatar turning gas into precious LNG or GTL fuels.

the infrastructure challenges that markets like South Korea has, where the lack of local gas or pipeline imports has forced the country to look towards LNG.

While speaking in Japan, the 0LQLVWHUDOVRH[SUHVVHGWKHYLHZWKDW WKHQH[WYH\HDUVZLOO VHHsome growth in the global LNG supply, thanks to developments in North America and Australia. But, such additions may not be enough to meet the increasing apetite of new emerging mar-kets including the Middle East and South America, along with WKH H[SHFWHG JURZWK LQ JOREDOconsumption by recovering tra-ditional economies, he added.

Qatar has apparently also done well to maintain European markets as destinations for its LNG. Qatargas recently signed DYH\HDUGHDOWRVXSSO\Ptonnes of LNG to Petronas in Britain. Britains falling gas production has begun to take its toll as rising competition for JDVVXSSOLHVEHJLQVWRUHHFW LQprices ahead of the winter. Qa-targas is set to deliver fuel to the Dragon LNG terminal by January when gas demand often peaks in the UK.

So despite what sceptics have been saying about shale gas in North America bringing Qatars glory days to an end, the rest of the world seems ready and willing to continue taking more /1* H[SRUWV IURP WKH $UDELDQstate.

27%Qatar produces this much of the worlds LNG

IN NUMBERS

Being the worlds largest LNG producer, we are demonstrating one of our fundamental marketing principles that Qatargas sells LNG to where it is needed the most KHALID BIN KHALIFA AL-THANI, CEO OF QATARGAS

21Qatar

3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU October 2013XXXBSBCJBOPJMBOEHBT.com

With the Middle East becoming a hub IRU UHQHULHV DQGpetrochemical ex-pansion projects,

contractors who help with the engi-neering and construction of these facil-LWLHVDUHKDYLQJDHOGGD\8QWLOUHFHQW-O\FRQWUDFWLQJZRUNLQWKHGRZQVWUHDPVHFWRURQO\UHIHUUHGWRUHIXUELVKPHQWRIDJHLQJUHQHULHVRUUHSODFHPHQWRIFRU-URGHGSLSHV LQ DQ HWKDQH FUDFNHU%XWtimes have changed, and how! 7KH0LGGOH(DVWPD\ MXVW VKRZ WKH

ZRUOG ZKDW WKH PRGHUQ IDFH RI UHQ-LQJ ZLOO ORRN OLNH 7KH HQWLUH LQGXVWU\agrees that technological innovations DUH KDSSHQLQJ LQ OHDSV DQG ERXQGVThese massive plants are no longer suited for local consumption; the Mid-GOH(DVW WRGD\ZDQWVWRFRPSHWHZLWKUHQHULHVIURP,QGLDDQG&KLQDLQWKHKLJKO\OXFUDWLYH(XURSHDQPDUNHW:LWKKHDYLHURLODVIHHGVWRFNDQGWKH

need to produce cleaner fuels, contrac-tors are designing some cutting edge SODQWV ,Q DGGLWLRQ WR LQFUHDVLQJO\ H[-SHQVLYH SODQWV WKH LQGXVWU\ LV VHHLQJ

strong collaborations between the state and private sectors, and between the (DVWDQGWKH:HVW7KHGD\VRIVPDOO-VFDOH SURMHFWV LV ORQJ JRQH $V RQHFRQWUDFWRU UHFHQWO\ UHPDUNHG :KHQ, ZDV \RXQJ D ELOOLRQ GROODU SURMHFWZDVIURQWSDJHQHZV%XWZLWKVRPDQ\GRZQVWUHDPGLYHUVLFDWLRQSODQVLQWKHUHJLRQHYHU\GD\ZHKHDURIDPXOWLELO-OLRQGROODUSODQWVFRPLQJXS530(WDNHVDORRNDWWKHFRQWUDFWRUV

who bagged the biggest deals in 2012-WRJLYH\RXWKLV\HDUV7RS'RZQ-VWUHDP&RQWUDFWRUVOLVWHQMR\

Top 10DownstreamContractors

Matthew Reid reveals the downstream contractors who scooped the most prestigious deals in the region

Top 10 Contractors24



3FlOJOH1FUSPDIFNJDBMT.JEEMF&BTU0DUPCFS www.arabianoilandgas.com

1 PETROFACThe last year has seen Petrofac in-crease its share in the booming EPC contract market. With an already nu-merous amount of ongoing projects, Petrofac has continued to add to its large portfolio across the region with major contract ac-quisitions. At the end of 2012, Petrofac was DZDUGHG(3&SDFNDJHV IRU WKH-D]DQ5HQ-ery and Terminal by Saudi Arabias Aramco. The total EPC was valued at $1.4 billion. Petrofac has also renewed commitments for a number of older projects: building on the ZRUNGRQHIRU*D]SURP1HIWVHOGVLQ%DGUDIraq, Petrofac has been awarded further EPC ZRUNIRUWKHVDPHHOGRYHUWKHIROORZLQJyears. Other major contract wins for Petro-fac come in the form of the massive Satah $O5D]ERRW SURMHFW 6$5% LQ SDUWLFXODUDQ(3&FRQWUDFWIRU6$5%ZDVDZDUGHGWRPetrofac for $515 million. Petrofac has also EHQHWWHGJUHDWO\IURPLWVMRLQWYHQWXUHZLWKMubadala Petroleum, Petrofac Emirates, with major EPC contracts. One of the major SURMHFWV WR VWDUW R ZHOO IRU 3HWURIDF(PLUDWHVZDVWKH8SSHU=DNXP8=HOG

9DOXHGDWWRWDOELOOLRQ LQDFRQVRUWLXPwith Daewoo Shipbuilding & Marine Engi-neering Co. Ltd., Petrofac was awarded EPC SDFNDJHVIRUDUWLFLDOLVODQGVXUIDFHIDFLOLWLHVtheir share being approximately $2.9 billion. Petrofacs dominance has continued through the year with an addition contract awarded in June by Oman Oil Company Exploration and

3URGXFWLRQ //& 22&(3 7KH PLOOLRQthree-year contract will have Petrofac provid-ing operations and maintenance assistance at two new facilities on behalf of OOCEP. Over-DOO3HWURIDFVFRQWUDFWDFTXLVLWLRQVRYHUhave far exceeded any other competitor in the market, putting the company at the top of this years list.

Overall, Petrofacs contract acquisitions in 2013 have far exceeded any other competitor in the market, putting the company at the top of this years list

25Top 10 Contractors


3 DAELIM INTERNATIONALSouth Koreas Daelim Industrial said it won an order to repair and install sulphur recovery units for the Ku-wait National Petroleum Company. The $517 million project will be an EPC under which Daelim will be responsible for the whole process from engineering to procurement and construction.7KHSURMHFWZLOOWDNHSODFHLQWKH0LQD$KPDGLUHQHU\NLOR-meters south of Kuwait City. The company must engage in the concurrent job of repairing obsolete units while installing new ones in order to expand the recovery capacity up to two million WRQQHVD\HDUIURPFXUUHQWWRQQHVZLWKLQWKUHH\HDUVRIWLPHVDLGDVWDWHPHQW'DHOLP,QGXVWULDOLVFXUUHQWO\ZRUNLQJRQDSURMHFWWREXLOGDSODQWWRSURGXFHHWKDQHSURSDQHDQGbutane in Mina Ahmadi while undertaking another project to install a remote controlling system for gas pipelines in the Port of Shuaiba. The South Korean company is very active through-out Kuwait. 'DHOLPLVDOVRZRUNLQJRQWKH

4 TECHNIPAlthough much of their major contract activity for the last year has been part of their successful JV with NPCC, the French company has landed some major contracts for itself. Being recognized for their engineering expertise throughout down-stream processes, Technip has secured a variety of contracts. Early summer of 2013 saw Technip awarded a substantial contract for a Carbon Black Delayed Coker by Abu Dhabis TAKREER. Utilizing a premium coke processing technologies licensed by Technip, the facil-ity is expect to process up to 700,000 tonnes per annum of superior-quality anode green petroleum coke. Last summer saw Technip secure EPC responsibility for the Halobutyl-2 plant in Jubail Industrial City. Based on their prior FEED work for Iraqs State Company Oil Projects (SCOP) in 2010, Technip was awarded PMC contracting for the EPC SKDVHRIWKH.DUEDOD5HQHU\HVWLPDWHGEHWZHHQWRPLOOLRQTechnip will oversee the primary phase of EPC bidding and contract QDOLVDWLRQ IROORZHGE\ WKH RYHUDOO FRPSOHWLRQRI(3& FRQWUDFWV IRUWKHUHQHU\'HVSLWHWKHLUPLQRULW\VKDUHLQWKH-9ZLWK13&&WKHELOOLRQGROODUFRQWUDFWZLOOVHH7HFKQLSRYHUVHHWKHPDLQHQJL-QHHULQJIXQFWLRQVDVZHOODVXWLOLVDWLRQRIWKHLUEUHDNWKURXJKRDWRYHUWHFKQLTXHIRULQVWDOODWLRQRIIDFLOLWLHVDWWKH8PP/XOXHOG$LPHGDWUHGXFLQJFRVWDQGLQVWDOODWLRQWLPH7HFKQLSVRDWRYHUWHFKQLTXHZLOOLQYROYHWKHEXONRIFRQVWUXFWLRQIRUWKHRVKRUHIDFLOLWLHVWREHGRQHLQ13&&V$EX'KDELFRQVWUXFWLRQ\DUGVDQGWKHQRDWHGWRLWVQDOdestination for installation. This massive joint undertaking is slated for FRPSOHWLRQLQWKHUVWKDOIRI

5 HYUNDAI ENGINEERINGWhile many companies have been able to snatch up a bunch of smaller contracts, Hyun-dai Engineering (HDEC) has come to the fore with a massive contract win. This past April, HDEC an-nounced that it had been awarded the EPC for ADMA-OPCOs SARB-4. Being the centerpiece of the entire 6DWDK$O5D]ERRW HOG WKHPXFK VRXJKWDIWHU RQVKRUHIDFLOLWLHVRI6$5%ZDVDZDUGHGWR+'(&IRUELO-lion. Involved in this massive contract is the construction RIIDFLOLWLHVWRDFFRPPRGDWHRLOIURPZHOOVLQWKH6DWDK$O5D]ERRWRVKRUHRLOHOG ORFDWHGNPQRUWKZHVWof Abu Dhabi. Related to the SARB contract, Hyundai E&C will also construct a facility at nearby Zirku Island to separate crude and gas collected by the SARB complexes DVZHOODVIURPWKH8PP$O/XOXRLOHOGV)DFLOLWLHVFRQ-structed by Hyundai E&C are being designed to handle XSWRESGDQGPLOOLRQFXELFIHHWRIJDV6ODWHGfor completion in April 2017, this massive project will see Hyundai Engineering continue its prominence in the re-gion while it attempts to construct one of the most ad-vanced processing facilities in the entire region. As Hyundai E&C commences work for SARB-4, the FRPSDQ\LVFRQWLQXLQJLWVPLOOLRQZRUNDW4DWDUVBarzan Gas project, scheduled to be completed next year; in addition, work for the Integrated Gas Development Project (IGD) at Abu Dhabis Island has been wrapping XSIUHHLQJUHVRXUFHVIRUWKHELOOLRQ-HGGDK7KHUPDOPower Plant to be built in Saudi Arabia.

While many companies have been able to snatch up a bunch of smaller contracts, Hyundai Engineering has come to the fore with a massive contract win



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This contract is a continuation of Fluors presence in Abu Dhabis growing petrochemical industry and is seen as further solidifying its position as a capable FEED and EPC contractor

h5IFSTURVBSUFSPG2013 saw Fluor pick up a massive contract to complement its ongoing list of projects in the region



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8 JACOBS ENGINEERING GROUPWhile Jacobs Engineering has been more quiet in the sector this year than in 2012 and 2011, the company did manage to take a contract from Saudi Aramco Lubricating Oil Re-QLQJ&R/XEHUHIWRSURYLGHSURMHFWPDQDJHPHQWFRQVXOWLQJ30&VHUYLFHVIRUDQH[SDQVLRQSURMHFWDWLWVOXEHRLOUHQHU\LQ

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9 FOSTER WHEELERThe Swiss-based company, Foster Wheeler continued to maintain its position as a major contractor in the region. Closing out 2012, Foster Wheeler was awarded a substantial PMC contract for Kuwaits Mina Al-Ahmadi and Mina Abdul-ODK UHQHULHV7RWDOOLQJPLOOLRQ)RVWHUWheelers work will aim at increasing the RYHUDOO RXWSXW RI WKH UHQHULHV WR bpd; in addition, the expansion will also in-clude facilities for processing fuel oil into more high-valued products. While much of FWs re-cently awarded contracts have been outside of the Middle East, one of its subsidiaries has been awarded a contract for project consul-tancy work by Apache Khalda. The contract was announced in April of this year, initial EPC phase of the Qasr Compression Project in Egypts Western Desert. The exact value of contract involving the Qasr gas condensate HOGKDVQRWEHHQGLVFORVHGE\DQ\SDUW\KRZever, the contract is to encompass consultancy responsibilities while increasing the compres-sion capabilities of existing facilities.

10 SAIPEMWhile not primarily fo-cused on the Middle East EPC market, Saipem has maintained its presence in the region due to LWVRVKRUHH[SHUWLVH(DUOLHUWKLV\HDU6DLSHPannounced contracts wins for North and West $IULFD WRWDOOLQJELOOLRQ7KHFRQWUDFW LQvolving EPC work at the West Delta Deep Ma-rine Phase Ixa Project, builds directly upon recently completed subsea development by Saipem. The company has already exceeded RI LWVQDQFLDOJRDOV IRU WKH\HDUEDVHGprimarily on an increasing North and West African contracts. Despite the shifting focus towards Africa, Saipem has continued its on-going work within the Middle East, most no-tably nearing completion of Saudi Arabias Al Wasit project. Currently, Saipems ongoing work within Saudi Arabia is nearing a total of ELOOLRQNHHSLQJ LWZLWKLQ WKLV\HDUV WRS10 contractors.

While not primarily focused on the Middle East EPC market, Saipem has maintained its presence in the region EVFUPJUTP TIPSFexpertise



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36


In Photos

Network Night - EIC $IFDLPVUUIFBDUJPOBUUIF&OFSHZ*OEVTUSJFT$PVODJMTBOOVBM'JTIBOE$IJQ4VQQFS/JHIUIFMEMBTUNPOUIJO%VCBJJOUIJTFYDMVTJWFFWFOUHBMMFSZCSPVHIUUPZPVCZRPME

The EIC hosted its 5th Fish and Chip Supper Night at a new and exciting venue, Wheelers of St James Dubai, a stylish revival of the worlds oldest

DQGQHVWVKHDWHU\HVWDEOLVKHGLQWKHKHDUWof London back in 1856.

The evening was a great success with over 80 attendees plus sponsorship from British Airways with whom the EIC has re-cently signed an MOU in London. On the night they very kindly gave away two World Traveller Plus tickets to London to two very

delighted attendees in the free draw. The winners of the tickets were Raphael

Torrano da Conceicao from EIC member company, WEG Middle East and Malin Ad-olfsen from Executive Solutions.

Wheelers also donated a voucher for din-ner at Wheelers to the value of 1000 AED, which was won by a thrilled Richard Bell from EIC member Clyde & Co.

The next EIC event will be the Opportu-nities with ThyssenKrupp (Uhde) luncheon at the Yas Island Rotana on the 23rd Octo-ber, for further information on any of EICs

events, please go to the web site http://www.the-eic.com/Events/FullEventsDiary.aspx

The EIC is still receiving prime sponsor applications to brand its golf tournament which will take place on 20th February 2014, at The Els Club, Dubai. The EIC is the lead-ing Trade Association providing dedicated services to help members understand, iden-tify and pursue business opportunities glob-DOO\ ,W LV DQRWIRUSURW RUJDQLVDWLRQZLWKa membership of over 650 UK-registered companies who deliver goods and services to the energy industries worldwide.

36 In Pictures

H.R.H. Prince Abdulaziz Bin Salman Bin Abdulaziz, Ministry of Petroleum & Mineral Resources, Saudi Arabia

James Gallogly, CEO, LyondellBasell

Daniele Ferrari, Chief Executive Ofcer, Versalis and Chairman, Matrca

Dr. Werner Breuers, Board Member, Lanxess AG

Aloke Lohia, Vice Chairman & CEO, Indorama Ventures

Florian Budde, Global Leader Chemicals Practice, McKinsey & Company

Han-Hong Bang, President and CEO, Hanwha Chemical Corporation and Chairman, Korea Petrochemical Industry Association

Hariolf Kottman, CEO, Clariant

Stephen D. Pryor, President, ExxonMobil, Chemical Company, Vice President, ExxonMobil, Corporation

Mark Garrett, CEO, Borealis

Mr. Shigeo Ohyagi, President & CEO, Teijin Ltd

Mohamed H. Al-Mady, Vice Chairman and Chief Executive Ofcer, Saudi Basic Industries Corporation (SABIC)

James R. Fitterling, Executive Vice President, Dow Chemical

Ramakrishnan Mukundan, Managing Director, Tata Chemicals

John G. Rice, Vice Chairman & CEO, GE Global Growth

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Welcome dinner hosted by ExxonMobil Chemical

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Hear from chemical company CEOs and top executives at the agship petrochemical meeting place in the Middle East.

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Luisa Sykes, a Senior Consultant with Euro Petroleum $POTVMUBOUTFYQMBJOTXIZUIFSFlOJOHTIJGUGSPN8FTUUP&BTUJTUBLJOHQMBDF

ASIA-PACIFIC & MIDDLE EAST, THE NEW GLOBAL REFINING CENTRES

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HQDEOHVWKHQHZO\EXLOWUHQHULHVLQWKHVHUH-gions to process heavier, cheaper crudes and achieve considerably lower costs per barrel of product and at the same time produce a higher yield of greater value products, fur-ther enhancing their competitive advantage. 5HODWLYHO\HDV\DFFHVVWRIXQGLQJIRUUHQHU\projects in the Middle East and Asia are also important factors and help explain the large number of projects currently underway in the whole region.

In Asia, the faster growth in the consump-tion of oil products renders the funding of re-QLQJ SURMHFWV VLJQLFDQWO\ PRUH DSSHDOLQJDQGHDVLHU WRREWDLQ,QFRQWUDVWUHQHUV LQthe West typically struggle to attain suitable QDQFHIRUWKHLUUHQHU\LQYHVWPHQWSURMHFWVZLWKLQ WKH FRQWH[W RI SRRU UHQHU\PDUJLQVand because of a general decline in oil de-mand within the OECD countries.

The situation could not be more different in the East, demand in the Middle East and

accommodate the future forecasted demand.6HYHUDOQHZODUJHUHQHU\SURMHFWVDUHHL-

ther being completed or at various stages of planning and construction in the Middle East and Asia. The question being asked by many LV $UH WKHVH UHQHU\ SURMHFWV DGHTXDWH WRmeet the forecasted demand or are they go-ing to be in excess of requirements?

IMPACT OF NEW CAPACITY INCREASES IN GLOBAL MARKETS7KH ODUJH YROXPH RI QHZ UHQLQJ FDSDFLW\coming on stream in Asia and the Middle East will change the supply and demand balance in the whole region and will make a VLJQLFDQW LPSDFWRQRWKHUUHJLRQV2UJDQL-zation of the Petroleum Exporting Countries OPEC estimates 7.2 million barrels per day of new crude distillation capacity worldwide will be added over the next 4 years.

Two-thirds of the new investment is planned to occur in China, India and Saudi Arabia. As indicated in Figure 1, China will take the lead, with an estimated capacity increase of 2.2 million by 2016 and an addi-tional 2.8 million barrels per day coming on stream by 2020.

India plans to add another one million bar-UHOVSHUGD\RIUHQLQJFDSDFLW\E\DQGat least another one million barrels by 2020. 6HYHUDO ODUJH UHQHU\ DQG SHWURFKHPLFDOprojects are scheduled in Saudi Arabia, Ku-wait and the UAE which would add at least another 3 million barrels per day of capacity over the next 8 years.

Asia has been growing very strongly over the last several years, in particular Saudi Arabia, China and India have average growth rates of 6, 5.6 and 4.4 per cent respectively and the expectation is for this growth rate to continue to be relatively strong but at slightly reduced levels.

It is not surprising that the majority of UHQHU\ H[SDQVLRQV DQG QHZ EXLOGV DUH RF-curring in those countries. According to the International Monetary Fund IMF, Chinas economy is forecast to grow at an average of 8 per cent per annum, between 2013 and 2018, whilst India and Saudi Arabia are fore-cast to grow at a slightly lower but still very impressive rate of 6.55 and 4.3 per cent re-spectively through the same period.

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Europe has shut down at least 1.7 MMb/d of refin-ing capacity in the last five years as the economic recession and new projects in the Middle East and Asia have cut into its traditional export markets.

According to an IEA report, refinery utilisation in Europe is down 75%, and the future does not look much brighter. Since 2008, 15 European refineries, representing 8% of the continents capacity have been closed.

According to a report by The Wall Street Journal, European demand for gasoline has fallen 17 per cent over the past five years. Michel Bnzit, president of Europia, a trade association for Europes refiners, says that the refining sector would need to invest $21 billion.

In a seperate article published by the journal, Pedro Miras, chairman of Spains emergency oil stockholding agency, Cores, and chair of the International Energy Agencys standing committee on oil emergency questions, says the closures could affect security of supply, not

Europes refining sector trudges slowly back towards the dark ages.

today, but in the long term. European concerns came full tilt when Petroplus,

one of the largest independent refiners in Europe, filed for insolvency at the beginning of this year. We were ultimately not able to come to an agreement with our lenders to resolve these issues given the very tight and difficult European credit

and refining markets, said Jean-Paul Vettier, chief executive of Petroplus. The company had committed a total of $1.75 billion of debt that matures from 2014 which it would be unable to pay without lending from European banks. h5IF&VSPQFBOSFlOJOHJOEVTUSZIBTHPOF

through numerous cycles, but this time many of the changes are likely to prove permanent and we expect the current trends of falling demand, rising imports, increasing European legislation, growing competition from emerging markets and eroding margins to continue, says Michiel Soeting, Global and European Head of Energy and Natural Resources at KPMG.

But Soeting also points out that the European downstream sector might have some hope. Petrochemical demand is expected to continue growing in the future, driven by Asian demand, but more interestingly, upgrades and improve-ments are currently inexpensive and could help position a European downstream revival in the long term future.

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Access to feedstock gives the Middle East a competitive advantage. 4BVEJ"SBCJBXJMMMFBEJOUIFFYQBOTJPOPGUIF($$TSFlOJOHBOEQFUSPDIFNJDBMTJOEVTUSZ

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a temporary problem, as long term the fore-casted oil product demand is expected to out-strip the new expected capacity increases.

The serious threat is not a regional im-balance between supply and demand, but a problem of future competition between Gulf UHQHUVDQG,QGLDQUHQHUVIRUDVKDUHRIWKHJOREDO PDUNHWV 0LGGOH (DVW UHQHULHV DUHbeing built to target export markets placing WKHPLQGLUHFWFRPSHWLWLRQZLWK,QGLDQUHQ-ers. 7HPSRUDU\ UHQHU\ RYHUFDSDFLW\ DQG H[-

cess product supply will exacerbate the prob-lem and lead to intense competition between WKHUHQHUVLQWKH*XOIDQG,QGLDDVWKHWZRUHQLQJFHQWUHVIRFXVRQH[SRUWPDUNHWV7KLVZLOODIIHFWSURWPDUJLQVDQGSXWOHVVHIFLHQWUHQHUVXQGHUH[WUHPHQDQFLDOSUHVVXUH*XOIUHQHULHVZLOODOVRKDYHWRORRNIRUQHZ

markets in the Mediterranean basin, USA and $IULFDSODFLQJWKHPVHOYHVLQGLUHFWFRPSHWL-WLRQZLWK(XURSHDQUHQHUV

The system of domestic fuel subsidies cur-rently in operation in many countries of the Middle East and Asia make the domestic PDUNHWVOHVVDSSHDOLQJDQGOHVVSURWDEOHDQGWKHUHIRUH UHQHUV LQ WKH UHJLRQVZLOO WXUQ WRH[SRUWPDUNHWVIRUKLJKHUQDQFLDOUHZDUGV6DXGL$UDELDQ UHQHUV DUH OLNHO\ WR DGRSW

a similar strategy and will be keen to explore DQG XVH WKHLU FRPSHWLWLYH DGYDQWDJH LQ WKHglobal markets. Saudi Aramco strategy to VHHNMRLQWYHQWXUHSDUWQHUVKLSVZLWK,QWHUQD-tional companies as well as Chinese National RLOFRPSDQLHVDSSHDUVWRVHUYHWKDWSXUSRVH,QGLDQ UHQHUV ZLOO DOUHDG\ IHHO XQGHU

threat by the imminent start-up of the new -XEDLO UHQHU\ DV WKH\ IDFH WKH SURVSHFW RIORVLQJDVLJQLFDQWSRUWLRQRIWKH0LGGOH(DVWoil products market and at the same time KDYLQJWRFRPSHWHZLWKDUHQHU\RIVXSHULRUcomplexity in the global markets.

This summer Saudi Arabia will import around 290,000 barrels per day of diesel and 150,000 barrels per day of gasoline and a VLJQLFDQWYROXPHRI WKDWSURGXFWZLOOFRPHIURP,QGLD

The growing competition from global mar-NHWVZLOOEHHUFHDQG,QGLDQUHQHUVZLOOEHIXUWKHU XQGHUPLQHG E\ WKH FRPSHWLWLYH DG-YDQWDJHWKDWWKH*XOIUHQHUVZLOOEHDEOHWRgain from access to cheaper oil through up-VWUHDPLQWHJUDWLRQDQGIDYRXUDEOHJHRJUDSKL-cal location. :KLOH,QGLDQUHQHUVZLOOIHHOXQGHUWKUHDW

IURP*XOIUHQHUV WKHPDUNHWPRVWDIIHFWHGE\WKHVHUHJLRQDOGHYHORSPHQWVZLOOEH:HVW-ern Europe. ,Q WKH FRPLQJ GHFDGHV WKHUHZLOO EH RQH

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COMPETITIVE THREAT FOR EUROPEAN REFINERS7KH(XURSHDQUHQHU\VHFWRULVVWLOOWKHODUJ-est in the world with 23.9 million barrels per GD\UHSUHVHQWLQJSHUFHQWRIZRUOGUHQ-LQJRIFDSDFLW\+RZHYHUWKH(XURSHDQUHQ-ing position is being eroded by poor margins and a major mismatch between supply and GHPDQG5HQHUV LQ(XURSH SURGXFH H[FHVVgasoline which is exported mainly to the USA Atlantic coast. +RZHYHU UHGXFWLRQV LQ 86$ LPSRUW UH-

TXLUHPHQWV DUH SODFLQJ (XURSHDQ UHQHULHVXQGHUPRUH DGGLWLRQDO SUHVVXUH WR QGQHZPDUNHWV (XURSHDQ UHQHUV QRW RQO\ IDFHthe prospect of losing market share in North $PHULFDEXWDOVRIDFHWKHFKDOOHQJHRIKDYLQJWRFRPSHWHZLWK*XOIUHQHUVDQG,QGLDQUH-QHUVIRUPDUNHWVKDUHLQWKHLUDOWHUQDWHPDU-ket of Africa. (XURSHDQ UHQHUV FRPSHWLWLYH SRVLWLRQ

continues to be undermined by reduced ex-ports to the USA, compliance with strict (XURSHDQ HQYLURQPHQWDO UHJXODWLRQV DQGcontinued weak demand for domestic oil SURGXFWV (XURSHDQ UHQHUV DUH VWXFN LQ DYLFLRXV FLUFOHRIQHHGLQJ WR LQYHVW LQERWWRPof the barrel upgrading facilities, but not be-ing able to generate enough returns to justify VXFKLQYHVWPHQWV7KH(XURSHDQUHQLQJLQGXVWU\ZLOOKDYHWR

undergo a period of restructure with poor per-IRUPLQJUHQHULHVEHLQJ IRUFHGWRFORVHDV LWEHFRPHVLQFUHDVLQJO\PRUHGLIFXOWIRUWKHPWR QG WKH LQYHVWPHQWV DQG QDQFHV QHFHV-sary to stay in business. ,Q (XURSH WKH PRVW GHWHUPLQDQW IDFWRUV

FRQWULEXWLQJWRZDUGVUHQHU\VXUYLYDOZLOOEHVFDOHORFDWLRQDQGOHYHORIFRPSOH[LW\(XUR-SHDQ UHQHUV HQMR\LQJ D FRPSHWLWLYH DGYDQ-WDJHEDVHGRQWKHVHIDFWRUVZLOOEHVLJQLFDQW-ly better placed to continue operating in spite RIWKHFXUUHQWZHDNPDUJLQHQYLURQPHQW6PDOODQGORZFRPSOH[LW\DQGORZFRQYHU-

VLRQUHQHULHVZLOOEHDWULVNRIFORVXUHDVWKH\are unable to compete with their much larger competitors and will be unlikely to be able to MXVWLI\FRVWO\XSJUDGLQJLQYHVWPHQWV$VWKH(XURSHDQUHQLQJLQGXVWU\LVGHFOLQ-

ing, Asia and the Middle East is expanding DQGSRVLWLRQLQJWKHPVHOYHVDVSULPHUHQHU\FHQWUHVZLWKDFRPSHWLWLYHHGJHDQGWKHDELO-LW\WRGRPLQDWHWKHJOREDOUHQLQJLQGXVWU\

Russia is also positioning itself to become a prominent exporter of oil products. The Rus-VLDUHQLQJLQGXVWU\LVWKHWKLUGLQWKHZRUOGonly behind China and the US but has for Regional petchem project spending is booming.

1SPEVDU%FNBOE'PSFDBTU743FOFSZ5ISPVHIQVU'PSFDBTU(Thousand of Barrels per Day)

15,000

10,000

5,000

0

Saudi Arabia India China

&TUJNBUFE3FOFSZ5ISPVHIQVU1SPEVDU%FNBOE

Source: OPEC, Oil & Gas Journal, EPC forecast

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many years been undercapitalized. The situation will change in the near future

with major upgrading projects taking place across Russia. Russia will prioritise the ex-port of diesel and heating oil and export lo-gistics are being expanded and improved. The expected increase of diesel exported from the Russia ports will also affect future Asia and 0LGGOH(DVWGLHVHOWUDGHRZWR(XURSH

ROLE OF THE NATIONAL OIL COMPANIES AND JOINT VENTURES IN THE REFINING INDUSTRY7KHUH DUH WZR DVSHFWV RI VLJQLFDQW LQ WKHFRQWH[WRIUHQHU\H[SDQVLRQLQ$VLDDQGLQWKH0LGGOH(DVWUHJLRQVWKHUVWRIWKHVHLVthe role played by the National oil companies (NOCs) and the second is the increasing sig-QLFDQFH WKDW MRLQW YHQWXUHV DUH SOD\LQJ LQUHQHU\SURMHFWV

The NOCs in many countries of the Middle East and in China are responsible for approxi-PDWHO\SHUFHQWRIDOOUHQLQJLQYHVWPHQWbut these NOCs are also frequently seeking partnerships with International oil compa-nies to strengthen their competitive position LQ UHQLQJ PDUNHWV DQG DW WKH VDPH WLPHshare in the risks associated with building such world scale facilities. The joint ventures Saudi Aramco are setting up with Chinese Sinopec and with International companies are perfect examples of strategic alliances to strengthen corporate expansion objectives. ,QWKHUHQLQJVHFWRUWKH6DXGL$UDPFRMRLQWYHQWXUHZLWK7RWDODWWKH-XEDLOUHQHU\DQGthe joint venture with Chinese Sinopec in the

WEDNESDAY 9TH OCTOBER, 2013SOFITEL ABU DHABI CORNICHE

CELEBRATING EXCELLENCE IN OIL & GAS

CORNICFITEL ABBU DHABI

The 4th annual Oil & Gas Middle East Awards brings together the leading companies and top executives from

the energy sector to crown the years top achievements.

www.arabianoi landgas.com/oagawards

Do not miss your chance to associate your brand with the leading industry awards ceremony for the oil & gas community.

Visit www.arabianoilandgas.com/oagawards or contact one of our team today for

further information.

Lionel MokAssistant Editor, Oil & Gas

Tel: +971 4 444 3662Email: [email protected]

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