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
  • Aramco-backed firm tenders logistics hub expansion

    9 November 2026

     

    Asmo, the logistics joint venture of Saudi Aramco and DHL Supply Chain, has set a 15 November deadline for a contract to expand the logistics complex at King Salman Energy Park (Spark) in Saudi Arabia’s Eastern Province.

    The logistics hub will add over 124,000 square metres (sq m) at Spark.

    Al-Khobar-based engineering firm House of Consulting Office is the project consultant.

    The tender for the expansion works comes shortly after Asmo awarded an estimated SR820m ($218m) contract to build the logistics complex’s first phase in May this year.

    The overall project will feature a 43,000 sq m, temperature-controlled Grade A warehouse; more than 3,000 sq m of offices and staff amenities; 5,300 sq m dedicated to chemicals storage; and an open yard covering about 1.2 million sq m.

    Asmo signed an agreement with Bahrain‑headquartered Arcapita Group Holdings in February to deliver the project at Spark.

    Planned for large-scale industrial use, the site is expected to incorporate advanced warehouse and building management systems, end-to-end digital connectivity, automation and robotics.

    It will also be developed in line with internationally recognised sustainability standards, featuring solar photovoltaic readiness, electric-vehicle charging infrastructure and a target of Leed Gold certification.

    The development aims to support the next stage of Saudi Arabia’s logistics and supply chain expansion.

    Under the deal structure, Arcapita will provide funding and retain ownership of the asset, while Asmo will develop the facility and then lease and operate it under a 22-year occupational lease.

    According to a statement, “the scheme will be executed via a forward-funding model, underscoring a long-term commitment to national infrastructure”.

    Asmo added that this will be its first purpose-built logistics centre and one of four strategic locations planned to anchor its nationwide logistics network, aligned with the National Transport and Logistics Strategy under Saudi Vision 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21267403/main.gif
    Yasir Iqbal
  • Prequalification begins for multibillion-dollar Dubai road

    9 November 2026

     

    Dubai’s Roads & Transport Authority (RTA) has begun prequalifying contractors for a design-and-build contract for a multibillion-dollar new road that will run parallel to Sheikh Zayed Road.

    Contractors have until 30 November to submit their prequalification statements.

    The latest development follows contractors’ expressions of interest for the project on 10 October, as MEED reported.

    The project’s scope covers about 30 kilometres (km) of works. These include about 15km of viaduct along First Al-Khail Street and more than 14.5km of bridge ramps, along with other associated infrastructure works.

    The project is another significant initiative aimed at alleviating pressure on the existing Sheikh Zayed Road section from Hadiqa Street to Hessa Street.

    Dubai has previously explored bold concepts to expand capacity on Sheikh Zayed Road, including proposals to introduce double-decker sections to add extra lanes without widening the existing corridor.

    The idea was discussed in the context of rising congestion and limited right-of-way along one of the city’s busiest arterial roads, with elevated decks potentially carrying through traffic while existing at-grade lanes served local access.

    The plans ultimately became standalone schemes, with subsequent efforts focusing instead on corridor-wide upgrades, interchange improvements and complementary public transport expansions to manage demand more sustainably.

    The latest project aligns with Dubai’s continued investment in upgrading and expanding its road network to keep pace with rapid population growth and rising commuting demand.

    Planning for growth

    Dubai launched the 2040 Urban Master Plan in March 2021, referencing studies indicating that the emirate’s population will reach 5.8 million by 2040, up from 3.3 million in 2020. The daytime population is set to increase from 4.5 million in 2020 to 7.8 million in 2040.

    In December 2022, Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved the 20-Minute City Policy as part of the second phase of the Dubai 2040 Urban Master Plan. 

    In addition to the road projects, the RTA’s Dubai Metro Blue Line extension and Dubai Metro Gold Line form part of Dubai’s plans to improve residents’ quality of life by cutting journey times, as outlined in the policy.

    The policy aims to ensure residents can meet 80% of their daily needs within a 20-minute journey, on foot or by bicycle. This goal will be achieved by developing integrated service centres with all necessary facilities and increasing population density around mass transit stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21266194/main.gif
    Yasir Iqbal
  • Contractor begins early works on Ardara’s AlWadi project

    9 November 2026

    Saudi Arabia’s Shibh Al-Jazira Contracting Company (Sajco) has started early construction works on the first cluster of its AlWadi mixed-use development in Abha.

    Ardara, backed by the sovereign wealth vehicle the Public Investment Fund (PIF), is developing the AlWadi project.

    Sajco will carry out sewerage works, while local engineering firm Dar Al-Riyadh will provide project management and supervision services for the infrastructure works.

    The AlWadi project will cover 2.5 million square metres (sq m) and will be developed around architectural styles informed by the heritage and character of the Aseer region.

    The masterplan has a planned gross floor area of about 2.02 million sq m. It includes 7,306 apartments, 90 villas and townhouses, and 2,783 hotel keys.

    The scheme will also provide 154,082 sq m of retail and food and beverage space, 64,161 sq m of offices, and 59,075 sq m of leisure and entertainment facilities.

    The wider development will comprise five districts and include 16 kilometres of waterfront assets and 17km of walking, cycling and sports tracks. 

    US-based Parsons is the infrastructure designer, while Miami-based OBMI is providing architectural and public realm design services.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21265927/main.jpg
    Yasir Iqbal
  • Syria in talks for refinery project worth $6bn-8bn

    9 November 2026

    Register for MEED’s 14-day trial access 

    Discussions are under way with international companies to develop a refinery in Syria’s Furqlus area, worth $6bn-8bn, according to a senior official at state-owned Syrian Petroleum Company (SPC).

    The project will be “very large” and, after completion, will replace Syria’s Homs refinery, according to SPC’s deputy executive president for refining affairs, Tariq Shalash Al-Abdullah, who spoke to Syria’s state-owned daily newspaper Al-Thawra Al-Souriya.

    He said the international companies currently involved in talks about the planned refinery project specialise in design work, engineering and technical studies.

    He also stated that, for large-scale projects of this type, consortiums are typically formed from a group of companies with complementary interests in study, manufacturing, financing, implementation and operation.

    In June, SPC published an invitation for companies to submit proposals to finance, build and operate the refinery under a build-operate-transfer agreement.

    The tender document published by SPC said the refinery would have the capacity to process 210,000 barrels a day (b/d).

    It also said the facility would be developed with the option to add an “ancillary petrochemical complex”.

    Al-Abdullah said the refinery’s total investment value would depend on the equipment's country of origin, adding that the equipment could potentially be procured from the US, Europe or China.

    Another factor that could alter the project’s value is the technology licences selected for the project, according to Al-Abdullah.

    The refinery project is expected to take around four years to develop from the date of signing the contract and completing other related preparatory activities.

    The project will be developed on a site that covers 400 hectares, according to the document that was published by SPC in June.

    SPC invited companies to submit three separate documents relating to their proposals.

    These were:

    • A package outlining the company’s qualifications and legal documents
    • A technical proposal
    • A financial and investment proposal

    According to the tender document, the scope of the refinery project includes developing:

    • Three independent atmospheric distillation units, each with a capacity of 70,000 b/d
    • Two vacuum distillation units
    • Hydrotreating units
    • Sulphur recovery units
    • A base oil unit
    • Power and steam generation facilities
    • A grid interconnection substation
    • A safe shutdown system
    • An environmental water treatment system
    • A gas recovery system
    • A unit to produce nitrogen and oxygen
    • A fire water network
    • Maintenance and repair workshops
    • Tank farm and storage facilities

    Under the plans outlined in SPC’s tender document, at least 85% of the refinery’s products should meet Euro-5 specifications.

    SPC is also seeking a “plan for the establishment and integration of an advanced petrochemical complex”, which would be connected to the refinery, according to the document.

    Because of this, it said the refinery design must allow diversion of some light and heavy naphtha and liquid petroleum gas (LPG) to be used as feedstock for the future petrochemical complex.

    The petrochemical complex is planned to use 20% to 40% of the naphtha and LPG.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21263584/main.png
    Wil Crisp
  • Three Libya oil and gas projects see developments

    9 November 2026

     

    Three key oil and gas projects in Libya have seen developments amid an uptick in activity in the North African country’s hydrocarbon sector.

    The contract scopes include seismic work, subsea pipeline development and drilling services.

    An invitation to prequalify has been issued for a project to provide two-dimensional (2D) and three-dimensional (3D) offshore seismic surveying services.

    The survey area is the Libyan Offshore Area O1, located in the Sirte Basin.

    The winner of the contract will be responsible for:

    • Acquisition of approximately 6,100 square kilometres (sq km) of 3D full-fold marine seismic data
    • Acquisition of approximately 3,000 sq km of 2D full-fold marine seismic data

    The client on the project is the Italian oil and gas company Eni.

    In a statement posted on the website of Libya’s National Oil Corporation (NOC), it said: “The objective of the survey is to acquire, within the required operational window from September 2027 to March 2028, high-quality broadband seismic data to improve the imaging of Cretaceous reservoir sequences and support future exploration activities.”

    The deadline to submit prequalification documents is 2 December 2026.

    Deadline extended

    Libya’s Mellitah Oil & Gas Company (MOG) has extended the deadline for companies to submit prequalification documents for a major offshore package as part of its Mellitah complex expansion and CO2 management integrated development project, which is estimated to be worth about $8bn.

    The previous deadline of 5 November 2026 has been extended to 3 December 2026.

    MOG, a joint venture of NOC and Eni, is the project client.

    The package, known as WP4B1, focuses on developing offshore pipelines and subsea systems for the E offshore installation and CO2 project.

    The turnkey contract will use the engineering, procurement, installation and commissioning (EPIC) model.

    As part of the Mellitah complex expansion and CO2 management integrated development project, two offshore structures – Structure A and Structure E – will be developed in Libya’s offshore block NC 41.

    Structure A is also known as wellhead production fixed platform A (WHPA) and Structure E is also known as production platform E (PPE).

    Structure A is in the central-western part of the area, about 80 kilometres (km) from the Libyan coast, with a water depth of 95-105 metres.

    Structure E is located in the central-eastern part of the area, about 130km from the Libyan coast, in a water depth of 205-235 metres.

    The scope of the wider project includes:

    • A new production platform installed in about 220 metres of water depth as part of the development of Structure E (Package WP1)
    • A new wellhead platform installed in 96 metres of water as part of the development of Structure A (Package WP2)
    • Modification of the existing Sabratha platform (Package WP3)
    • Sealines and subsea systems extending from the Sabratha platform to Structure A (Package WP4A1)
    • Sealines and subsea systems for Structure E and the CO2 system (Package WP4B1)
    • Supply of seamless carbon steel pipes for CO2 injection from the Mellitah complex to Sabratha platform (Package WP4B2)
    • Subsea Production Systems (SPS) for Structure E and CO2 (Package WP4B3)
    • Upgrading the existing onshore Mellitah complex (WP5)

    The package known as WP4B1 has been broken down into two phases.

    The first phase focuses on the installation of the project’s subsea CO2 pipeline and its related system network.

    The second phase of WP4B1 is focused on the pipeline to structure E and its related subsea system network.

    Monitoring drilling

    MOG has also issued a separate invitation for prequalification relating to a contract to provide hydrogen sulphide monitoring services for offshore drilling.

    The contract focuses on providing H2S monitoring services for 18 offshore development wells as part of the “Structures A&E” project.

    Four of the wells will be subsea wet wells and a further 14 will be dry tree wells.

    The deadline for submitting prequalification documents is 3 December 2026.

    The work will be carried out in the zone known as Area D, Block NC41.

    H2S monitoring in the oil and gas industry involves tracking H2S gas concentrations in the air using electronic sensors and detectors to protect workers, prevent fatal exposures and avoid equipment damage.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21263383/main.jpg
    Wil Crisp