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
  • I Squared eyes $2bn deployment across PIF portfolio

    13 July 2026

    Saudi Arabia's Public Investment Fund (PIF) has signed a memorandum of understanding (MoU) with US infrastructure investor I Squared Capital, under which the firm will pursue the deployment of up to $2bn in real estate and infrastructure assets owned by the sovereign fund and its portfolio companies.

    The non-binding agreement, announced on 13 July, will see the two work with PIF portfolio companies to identify opportunities in digital infrastructure and district cooling, which the parties describe as critical enablers of the real estate sector. I Squared will target allocating up to $1bn in each of the two areas, with the option to scale across additional related business themes.

    The MoU aligns with PIF's 2026-30 strategic objectives to partner with global investors on opportunities within its portfolio and to maximise the value of its portfolio companies. The collaboration is expected to accelerate project delivery and increase the contribution of third-party capital into opportunities across the portfolio.

    Founded in 2012 and headquartered in Miami, I Squared Capital manages $60bn in assets across power and utilities, transport and logistics, digital infrastructure, and environmental and social infrastructure. Its portfolio includes more than 100 companies operating in over 70 countries.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17655682/main2812.png
    Colin Foreman
  • Former emir of Qatar Sheikh Hamad dies aged 74

    13 July 2026

    Sheikh Hamad Bin Khalifa Al-Thani, the former emir who presided over Qatar's transformation into one of the world's richest states and its largest exporter of liquefied natural gas (LNG), has died at the age of 74.

    The Amiri Diwan, Qatar's official administrative office, announced his death on the morning of 12 July, describing him as a great leader and mourning the loss to the nation. The country declared a four-day period of public mourning, with work suspended across ministries, government agencies and public institutions from Monday 13 July until employees resume on Sunday 19 July. Flags are to be flown at half-mast throughout the mourning period. Funeral prayers were held after Maghrib prayer on 12 July at the Imam Muhammad Bin Abdul Wahab Mosque, after which his body was laid to rest in Lusail Cemetery.

    Sheikh Hamad ruled Qatar from 1995 to 2013 and led its modern economic development. When he took power from his father, the country's finances were strained and its oil reserves were declining. Over the following 18 years, he oversaw an era of rapid economic, social and cultural change that established Qatar as a significant global player in energy, finance and diplomacy.

    Gas foundations

    Central to that transformation was the development of Qatar's North Field gas reserves, one of the largest single accumulations of natural gas in the world. Through a series of international partnerships and investments, Sheikh Hamad's government built the infrastructure that turned the country into the world's largest exporter of LNG, a position that underpinned decades of budget surpluses and funded an expansive development programme across construction, infrastructure and social services.

    The wealth generated by gas exports allowed Qatar to invest heavily both at home and abroad. Sheikh Hamad founded the Qatar Investment Authority (QIA), the sovereign wealth fund that acquired stakes in assets ranging from the London department store Harrods to the football club Paris Saint-Germain. The QIA remains one of the most active sovereign investors in the world and a cornerstone of Qatar's economic strategy.

    Born in Doha in 1952, Sheikh Hamad studied at the UK's Royal Military Academy Sandhurst before joining the Qatar Armed Forces and later serving as defence minister. He was named heir apparent in the late 1970s and took power in 1995 while his father was abroad.

    Global profile

    Sheikh Hamad used Qatar's growing wealth to raise its international standing well beyond its size. In 1996, he backed the launch of the Al-Jazeera television network, which grew into one of the most influential media organisations in the region and further afield. His government also pursued an active diplomatic role, hosting negotiations and international events that positioned Doha as a mediation hub.

    The most prominent, and most contested, achievement of his tenure came in 2010, when Qatar won the right to host the 2022 Fifa World Cup. The tournament prompted a multibillion-dollar construction programme, spanning stadiums, transport networks, hotels and wider urban infrastructure, and accelerated the build-out of projects across the country. The bid and the subsequent preparations drew scrutiny over labour conditions and allegations of corruption, of which Qatar was later cleared.

    Sheikh Hamad's rule also brought institutional change, including the promulgation of Qatar's first permanent constitution in 2004 and the introduction of municipal elections in which women were permitted to vote and stand as candidates.

    In 2013, he handed power to his son and heir apparent, Sheikh Tamim Bin Hamad Al-Thani, then 33, in a rare voluntary abdication by a hereditary Gulf ruler. The transition allowed for a managed handover of a state that had been reshaped over the previous two decades.

    Tributes were offered by leaders across the Gulf and beyond, including UAE President Mohamed Bin Zayed Al-Nahyan, Egyptian President Abdel Fattah El-Sisi and the UK's King Charles III, who said Sheikh Hamad had dedicated many years of distinguished service to Qatar.

    Qatar was a British protectorate until 1971, with the Al-Thani family having ruled since 1851. Sheikh Hamad leaves a state whose economic weight, built largely on the gas reserves developed during his reign, continues to shape the wider Gulf economy.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17651433/main.jpg
    Colin Foreman
  • Contractors submit bids for Ras Tanura refinery gas pipeline

    13 July 2026

     

    Register for MEED’s 14-day trial access 

    Contractors have submitted bids to Saudi Aramco for a tender to replace a pipeline in the Gas Line Abqaiq-Ras Tanura (GART) transmission network.

    The GART grid transports associated gas and natural gas liquids (NGL) from the Abqaiq oil processing complex as feedstock, northwards to the Ras Tanura refinery in Saudi Arabia’s Eastern Province.

    The aim of the project is to replace the GART-22 pipeline that connects the Juaymah export terminal on the Gulf coast in the Eastern Province to the Ras Tanura refinery, to ensure reliable fuel gas supply and meet ongoing demand.

    The basic scope of work for the project is to install a new 24-inch pipeline system to replace the GART-22 line and the abandoned GART-24 line. It will cover a distance of 18 kilometres between Juaymah and the Ras Tanura terminal.

    The scope also includes the installation of associated scraper trap facilities (launcher and receiver), pressure control valves, motor-operated valves and gas detection and sampling systems.

    Aramco issued the tender for the project in May, setting an initial deadline of 30 June for contractors to submit proposals, MEED previously reported.

    The Saudi energy giant then extended the deadline until 10 July, and then allowed bidders until 12 July. Contractors submitted their proposals by that final deadline, according to sources.

    The following contractors, among others, are understood to be bidding for the project:

    • ACE Pipeline Arabia
    • Combined Group Contracting Company
    • Gas Arabian Services Company
    • Max Streicher Saudi Arabia
    • National Basics Company
    • Saad Ali Alessa Group
    • Sicim
    • Sinopec Engineering Group Saudi
    • Tecton Engineering & Construction
    Ras Tanura refinery complex

    The Ras Tanura refinery is the oldest, and one of the largest, crude oil refineries in Saudi Arabia. The complex has a refining capacity of 550,000 barrels a day (b/d).

    The facility also has a 305,000 b/d NGL processing facility, a 960,000 b/d crude stabilisation facility, combined steam and gas turbine electrical power generation plants with a summer capacity of 145MW and a winter capacity of 158MW, and a combined 150-pound and 600-pound steam capacity of 6,217 million pounds an hour.

    It has 75 crude oil and products storage tanks with a combined capacity of 5.8 million barrels.

    The Ras Tanura refinery’s major facilities include a 325,000 b/d crude distillation unit, a 225,000 b/d gas condensate distillation unit, a 50,000 b/d hydrocracker and 107,000 b/d of catalytic reforming capacity.

    The facility is Aramco’s only refinery to contain a Visbreaker processing unit, which has a 60,000 b/d capacity.

    The Visbreaker reduces the quantity of residual oil produced in the distillation of crude oil and increases the yield of more valuable middle distillates, heating oil and diesel.

    The refinery complex also produces 17,000 b/d of asphalt, more than any other refinery in Saudi Arabia.

    Ras Tanura receives crude feedstock from the Abqaiq, Safaniya and Manifa oil field developments.

    Crude is typically transferred to Ras Tanura through a pipeline and can also be supplied by ship.

    Most of Ras Tanura’s production is transferred to the Dhahran bulk plant for domestic use, while some products are exported from the nearby Ras Tanura shipping terminal.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17649169/main2152.jpg
    Indrajit Sen
  • AtkinsRealis wins Expo 2030 Riyadh design deal

    13 July 2026

    Canadian engineering firm AtkinsRealis has won a contract to deliver lead design services for the Place & Planet Pavilion at the Expo 2030 Riyadh site.

    The contract was awarded by Expo 2030 Riyadh Company (ERC), which is tasked with delivering the Expo 2030 Riyadh venue.

    AtkinsRealis will deliver the full architectural and engineering design for the pavilion, coordinate all relevant design disciplines and embed sustainable design principles throughout.

    The Place & Planet Pavilion is anticipated to be a key attraction at Expo 2030 Riyadh.

    The latest development follows ERC tendering a contract to build the Saudi Arabia pavilion at the site.

    The pavilion is a major asset located within the KSA District on the eastern side of the Expo 2030 Riyadh masterplan, within the Loop of Nations district.

    The tendering of the pavilion structure followed swift progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covers the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covers about 50 kilometres of integrated infrastructure networks, including internal roads and utilities such as water, sewage, electrical and communication systems and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor
    • Lot 2 includes the northern cluster of the nature corridor
    • Lot 3 comprises the southern cluster of the nature corridor 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport, and will provide direct access to various landmarks within Riyadh.

    The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17642053/main.jpg
    Yasir Iqbal
  • Conflict fails to dent Saudi Arabia’s A+ rating

    13 July 2026

    Ratings agency Fitch has affirmed Saudi Arabia's long-term foreign-currency issuer default rating at A+ with a stable outlook, citing fiscal and external balance sheets that remain significantly stronger than those of similarly rated peers.

    In a rating action published on 10 July, Fitch said the kingdom's economy and public finances had proved resilient to the US-Iran war, supported by significant fiscal buffers in the form of deposits and other public-sector assets. Oil dependence and governance scores had improved but remained weaknesses, while geopolitical risk stayed high.

    A deal allowing a ceasefire and the reopening of the Strait of Hormuz is broadly in place, although Fitch warns that flare-ups highlight risks to its near-term sustainability. The agency says further US or Israeli military action against Iran remains quite likely. It expects the reopening of the strait to return the oil market to oversupply, pulling Brent down to an average of $60 a barrel in 2028 from $87 a barrel in 2026.

    Fitch forecasts real GDP growth will slow to 0.6% in 2026, hit by disruption to trade during the closure of the strait. Flows through the East-West pipeline support oil production during the war, but output at an annual average of 9 million barrels a day will sit below the 2025 level.

    Growth is expected to rebound in 2027 as flows normalise, before easing to 2.9% in 2028, supported by the phased opening of gigaprojects and guidance that sovereign wealth vehicle the Public Investment Fund will keep domestic spending largely unchanged.

    The fiscal deficit is projected to narrow in 2026 as higher oil prices offset lower volumes, before widening to 4.7% in 2027 on a fiscal breakeven oil price of $94 a barrel. Fitch projects government debt will rise to 41.3% of GDP by the end of 2028, from 31.8% at the end of 2025, above the government's guidance of a 40% ceiling.

    The agency describes the external balance sheet as healthy, with sovereign net foreign assets of 38.5% of GDP by the end of 2028. Banks have been resilient to the war, with non-performing loans at 1.1% and a Tier 1 capital ratio of 19.2% at the end of the first quarter of 2026.

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

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17644782/main.gif
    Colin Foreman