meed-logo

line1 line2 line3
SIGN IN / REGISTER

Lummus targets large contracts in Saudi Arabia

26 September 2023

 

Register for MEED's guest programme 

US-headquartered petrochemicals specialist Lummus Technology is expecting to grow rapidly in Saudi Arabia over the next decade, according to the company’s chief technology officer Ujjal Mukherjee.

Mukherjee is in the process of moving his entire team from the US to Saudi Arabia in order to capitalise on opportunities in the Middle East.

“The Middle East and North Africa are a key focus for us because of the scale of the planned capital expenditure in our industry,” he says.

“Within the region, Saudi Arabia is the most important to us because of the investments in petrochemicals that are planned.

“Qatar is also important because of its plans for natural gas and petrochemicals, but in terms of investment, Saudi Arabia is not just leading the region, but the entire world.”

Lummus is anticipating as many as 10 or 11 ethane crackers to be installed in Saudi Arabia over the next seven to eight years

Project expectations

Lummus says that Saudi Arabia’s plans to develop facilities with the capacity to convert 4 million barrels of crude oil to chemicals represent $100bn-$200bn in investment.

As part of the push to boost crude-to-chemicals production, Mukherjee is expecting at least four or five greenfield complexes to be developed in Saudi Arabia.

On top of this, he says there are several opportunities to upgrade existing facilities in the country, both in the eastern Jubail area and in the west coast’s Yanbu region.

Across all of these greenfield and upgrade projects, Lummus is anticipating as many as 10 or 11 ethane crackers to be installed over the next seven to eight years.

“This is a huge investment – and that is why everyone in the world of petrochemicals is focused on Saudi Arabia,” says Mukherjee.

“Elsewhere, China is slowing slightly and the Russian market is off limits. There are opportunities in Southeast Asia and India specifically, but the GCC nations are the most important.”

In addition to the GCC states, Lummus has significant interest in markets across the Middle East and North Africa (Mena) region, including Egypt and Turkiye.

Turkiye is of particular interest because of its stated aim of becoming self-sufficient in terms of petrochemicals production, according to Fadi Mhaini, Lummus Technology’s managing director for Mena.

Turkiye is also in a financial position that means investments in world-scale petrochemicals plants are feasible.

The investment climate in Egypt is more challenging, but it remains of interest because of its significant reserves of oil and gas, large population and internal demand for petrochemicals products.

“There are 100 million people living in Egypt and there is a great demand for polymers and plastics,” says Mhaini.

Per capita consumption of plastics in Egypt is estimated to be 21.8 kilograms (kg) a year. This is compared to more than 130kg in the US.

Lummus sees this as a potential sign of pent-up demand for plastics and says new facilities that come online in Egypt could see significant success by supplying the local market.

Saudi challenges

While there are big opportunities in Saudi Arabia’s petrochemicals sector, Mukherjee says it remains a market with significant challenges.

“The biggest challenge we have is getting subject matter expertise in the complex technologies that we license, especially with the focus on employing local skilled labour,” he says.

“We have a lot of graduates coming from good universities there, but you need a certain degree of experience in absorbing these complex technologies.”

A key area of focus for Lummus is growing the number of experienced specialists that it employs and accelerating the transfer of knowledge from its experienced workers to the local talent pool in Saudi Arabia, as well as in other markets, including the UAE.

In order to achieve this goal, the company plans to create centres of excellence across the Mena region.

It has already created one in Bahrain, and says that it has proven effective at providing education for local operators in complex technologies and advanced computing tools.

By recruiting locally and relocating experienced staff from around the world, Lummus expects to grow its Saudi Arabia office from an initial size of about 50 employees to more than 200 in the next three to four years, according to Mukherjee.

While the cornerstone of business activities for Lummus is technology licensing, it plans to use its Saudi office to work with local companies to provide a wide range of services, including the provision of engineering work and of spare parts and equipment.

Project acceleration

Since Lummus was spun off by McDermott in a $2.7bn deal in 2020, one of the key strategic changes is a renewed focus on project streamlining and reduced project completion times.

Mukherjee says this has positioned the firm well to win contracts in Saudi Arabia, where the country’s leadership is keen to execute large-scale projects on an accelerated schedule.

“As soon as we learned that we were going to be an independent company, we decided to take advantage of all of the engineering tools that are part of our ecosystem and use them to accelerate the engineering, procurement and construction (EPC) processes,” he says.

“We have used very advanced engineering tools to dramatically reduce the time it takes us to do early engineering and front-end engineering and design work.

“This means that we have to work with very highly skilled engineering contractors and get them started very early on in the procurement cycle.”

As part of Lummus Technology’s new focus on executing projects on an accelerated schedule, it has started to work more closely with several EPC contractors.

“Closer working relationships with these companies are a key way of creating a win-win situation for everyone involved,” he says.

Lummus estimates that the upcoming greenfield oil-to-chemicals projects in Saudi Arabia are each expected to be worth $20bn-$35bn.

“The size of these projects means that there is no EPC contractor in the world that can take them on alone,” says Mukherjee.

Fear of risk

One of the key challenges in Saudi Arabia’s petrochemicals projects sector is that several large international contractors are less keen to take on contracts that use the EPC model due to the potential risks.

Many companies are worried that unpredictable price inflation could mean the EPC contract model would leave them out of pocket if the cost of materials and equipment suddenly increases.

“Even working in consortium, there are very few companies globally that are well equipped to execute complex projects on this scale on an accelerated time schedule,” says Mukherjee. “The technology is there, but there is a risk averseness among many large EPC companies that have been burnt in the past.”

While the projects are difficult and will require close cooperation between different contractors, Mukherjee is confident that his company will play a key role in many of the planned petrochemicals facilities in Saudi Arabia.

He says it is likely that his company will win contracts on many of Saudi Arabia’s upcoming petrochemicals projects, and that the firm is expanding the office so that it can cooperate closely with clients and subcontractors in the country to provide quicker response times to any queries.

“By moving there, we want to make sure that [clients and subcontractors in] Saudi Arabia, Kuwait and the UAE know that they will not have to cross time zones to get immediate responses,” Mukherjee says.


Ujjal Mukherjee, Fadi Mhaini and the Mena team

Market outlook

Lummus is optimistic about how Saudi Arabia’s investment in petrochemicals production will benefit the country’s economy in the long term.

Mukherjee says Saudi Arabia could become an increasingly powerful force in global petrochemicals markets in the coming years if it manages to successfully execute the planned projects to an accelerated schedule.

“What Saudi Arabia has is one of the cheapest raw materials for petrochemicals production. The same is true for Qatar and Abu Dhabi,” he says.

“Very cheap oil and gas gives Saudi Arabia a huge advantage and competitive edge over places like South Korea.”

Mukherjee says that, in the past, South Korea maintained a competitive edge in terms of managing project schedules and costs.

He adds that a petrochemicals project that could be completed in 36-42 months in South Korea would previously have taken 60-72 months in Saudi Arabia.

Now, the difference is being reduced by Saudi Arabia’s plans to execute projects using an accelerated schedule.

“If Saudi Arabia can do it, it will put itself in a position where it will be a dominant force when it comes to manufacturing certain polymers,” he says.

Aligning the scheduled start-up of Saudi Arabia’s new wave of planned petrochemicals projects with trends in the global market is likely to be key to the kingdom's success, according to Mukherjee.

In the past year and half, the prices of key petrochemicals products have been subdued as large projects have come online in China and other locations.

This temporarily created an oversupply in certain chemicals despite global per-capita consumption having increased, Mukherjee says.

He believes global prices will stabilise after 2030 and that demand will outstrip that for both gasoline and diesel.

By the end of this decade, Mukherjee expects that demand for polyethylene in particular will start to grow robustly, as is demand for polypropylene – and that Saudi Arabia will be well positioned to take advantage of this growth.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11170351/main.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egypt approves plans for 869MW wind power plant

    22 June 2026

    Egypt’s Cabinet has approved plans for French renewable energy developer Voltalia to develop an 869MW wind power project.

    The scheme will be built on land allocated by the New & Renewable Energy Authority (NREA), according to a statement posted by the Cabinet following its most recent weekly meeting.

    Voltalia will make an initial investment of $53m and has committed to achieving commercial operations by December 2028.

    Voltalia already operates the 32MW Ra solar plant at the Benban solar complex in Aswan and is expanding its renewable energy portfolio in Egypt.

    Previously, in 2024, it signed a framework agreement with Egypt’s Taqa Arabia to develop a green hydrogen and renewable power cluster near the Ain Sokhna port in the Suez Canal Economic Zone.

    The green hydrogen development is planned in two phases, each centred on a 500MW electrolyser powered by more than 1.3GW of renewable generation capacity. The project, still in its early stages, is expected to produce up to 350,000 tonnes of green ammonia a year.

    Voltalia’s partnership with Taqa Arabia also includes plans for a 3.2GW hybrid wind and solar project to repower the existing 545MW Zafarana wind farm in Suez Governorate. The Cabinet statement did not indicate whether the newly approved 869MW wind project forms part of that proposal.

    Meanwhile, the developer won another contract, earlier this year, to develop a 132MW solar power project in Tunisia’s Gabes region.

    The project, known as Wadi, marked Voltalia’s third major solar award in the country after the Sagdoud and Menzel Habib projects awarded in 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17376730/main.jpg
    Mark Dowdall
  • Local firm signs Jeddah drainage contracts

    22 June 2026

    Local contractor Alkhorayef Water & Power Technologies (AWPT) has announced it has signed two contracts with Jeddah Municipality to operate and maintain stormwater and surface water drainage networks across the city.

    The contracts have a combined value of SR202.06m ($53.9m), and each will run for five years.

    The first contract, valued at SR108.46m ($28.9m), covers the operation and cleaning of stormwater and surface water networks in the South and Al-Malisa sub-municipalities.

    The second contract, worth SR93.59m ($25m), covers similar services for the Airport Sub-Municipality.

    In March, MEED reported that the firm had won a long-term contract to carry out work in the airport’s sub-municipality area. The agreement was signed on 16 June.

    Elsewhere, construction has yet to begin on phases one and two of the King Abdullah Road-Falasteen Road tunnel project, each valued at about $175m.

    According to sources, Jeddah Municipality selected Saudi contractor Thrustboring Construction Company to build the large-diameter stormwater drainage tunnels in 2025. However, an official agreement has yet to be signed.

    The municipality was also previously planning to rehabilitate the existing Al-Zahra pumping station. Prequalification for the project began in 2020; however, it is understood that the main contact tender was cancelled last year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17376097/main.jpg
    Mark Dowdall
  • Saudi firm signs Uzbekistan water treatment PPP

    22 June 2026

    Saudi-listed Miahona has signed a public-private partnership agreement to enhance, operate and maintain Uzbekistan’s Zomin water treatment plant in the country’s Jizzakh region.

    The agreement was signed on 18 June with Uzsuvtaminot, the country’s state-owned water utility, the developer said in a filing with the Saudi stock exchange.

    Miahona will carry out enhancement works and 25 years of operation and maintenance services for the existing plant, which has a design treatment capacity of 50,000 cubic metres a day

    The contract marks the company’s entry into Uzbekistan’s water sector. According to the disclosure, it will enter into force once a project-related governmental decree is issued in accordance with Uzbekistan’s applicable legislation.

    The contract is estimated at $105m (SR395m), with a final value to be confirmed following the issuance of the governmental decree.

    MEED reported earlier this month that Uzbekistan had stepped up its engagement with Middle Eastern investors, including holding talks with Saudi Arabia’s Acwa and Vision Invest on renewable energy, water management, waste recycling, digital infrastructure and urban utility projects.

    The government also recently held discussions with a UAE delegation led by Suhail Mohamed Al-Mazrouei, minister of energy and infrastructure and chairman of Etihad Water & Electricity’s Board of Directors.

    At the Tashkent International Investment Forum, it signed a €197m financing package with Germany’s KfW Development Bank to support drinking water supply and wastewater projects in the Surkhandarya and Fergana regions.

    The projects will cover Termez and several district centres in Surkhandarya region, as well as Kokand and Margilan in Fergana region.

    This includes “the construction and reconstruction of hundreds of kilometres of drinking water and wastewater networks, pumping stations and modern wastewater treatment facilities”, deputy prime minister Jamshid Khodjaev said.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17375811/main.jpg
    Mark Dowdall
  • Qiddiya seeks contractors for indoor arena project

    22 June 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabian gigaproject developer Qiddiya Investment Company (QIC) has invited contractors to prequalify for a contract to build an indoor sports arena within its Qiddiya entertainment city project.

    The invitation was issued on 21 May, with a submission deadline of 28 June.

    The multipurpose arena is designed to International Olympic Committee standards.

    It will be located in District 18, in the Uptown South area of Qiddiya.

    Once completed, the indoor arena will be capable of hosting a wide range of sports, cultural and entertainment events.

    The arena will feature numerous sports courts for basketball, handball, futsal, volleyball, tennis, boxing and gymnastics.

    It will have a seating capacity of 18,000 spectators.

    The project is scheduled for completion by 2030.

    QIC’s other major projects include an e-sports arena, the National Tennis Centre, Prince Mohammed Bin Salman Stadium, a motorsports track, a racecourse, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    QIC opened the Six Flags theme park to the public in December last year.

    The park covers 320,000 square metres and features 28 rides and attractions, including 10 thrill rides and 18 aimed at families and young children.

    The Qiddiya project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17375504/main.jpg
    Yasir Iqbal
  • Egypt signs gas deal with Harbour Energy

    22 June 2026

    Egypt’s Ministry of Petroleum & Mineral Resources has signed a new agreement with London-headquartered Harbour Energy.

    Under the scope of the agreement, Harbour Energy will drill two new exploration wells and carry out maintenance work for one of the existing wells within the Dsouq-1 development contract.

    Harbour Energy committed an initial $6m investment and a $1m signing bonus for the Dsouq concession. Total investment could rise to $18m if commercial discoveries are made.

    The signing was witnessed by Egypt’s Minister of Petroleum, Karim Badawi.

    He said that his ministry is continuing to implement a package of investment measures and incentives aimed at encouraging partners to increase investments and intensify exploration, development and production activities.

    The agreement was signed by Syed Saleem, a member of the executive branch of the state-owned Egyptian Natural Gas Holding Company (EGAS), and Samah Sabry, the executive director of Harbour Energy for the Middle East and North Africa region.

    Harbour Energy drilled two new wells in Egypt during the fiscal year 2025/2026, resulting in the addition of reserves estimated at 35 billion cubic feet of gas.

    The company aims to drill three new exploration wells during the fiscal year 2026/2027.

    Egypt is currently pushing to boost the production of both oil and gas in its territory.

    Earlier this month, Egypt’s Ministry of Petroleum & Mineral Resources announced that it had fully settled all outstanding arrears owed to oil and gas companies.

    Two years ago, in June 2024, the country owed approximately $6.1bn to partners in the oil and gas sector.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17374536/main4731.jpg
    Wil Crisp