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
  • Oman announces $790m industrial investment deals

    30 October 2026

    Oman’s Public Authority for Special Economic Zones and Free Zones has signed 28 investment agreements worth more than RO304m ($790m) for new projects and expansions across the country’s special economic zones, free zones and industrial cities.

    The agreements cover more than 2 million square metres (sq m) of land and span industrial manufacturing, food production, logistics, recycling and commercial activities.

    About $383.6m of the investment has been allocated to industrial cities operated by the Public Establishment for Industrial Estates (Madayn). Sohar Free Zone accounted for $152m, followed by the Special Economic Zone at Duqm (Sezad) with $143.1m, Salalah Free Zone with $85.6m and Khazaen Economic City with more than $27m.

    The projects are expected to support Oman’s efforts to diversify its economy, expand industrial production and attract private investment in line with Oman Vision 2040.

    Investment deals

    In Sohar Industrial City, Atlas Steel will invest more than $291.1m in a plant producing iron and steel products on a site of about 440,000 sq m.

    Fujian Mancheng Industries & Investment will invest $52m in a ceramics facility covering more than 241,000 sq m. Other investments in Madayn’s industrial cities include an $18.2m phosphate and nitrogen fertiliser plant planned by Gulf Company for Organic and Biological Fertilisers in Raysut, as well as projects involving structural metal products, paper and corrugated cardboard, and oil and gas equipment and services in Raysut, Ibri and Nizwa.

    In Sohar Free Zone, Sohar Automotive & Advanced Industries Company will invest $98.8m in an automobile assembly complex covering 317,000 sq m. The complex aims to attract vehicle manufacturers, automotive supply-chain companies and advanced-manufacturing businesses.

    Voltamp High Voltage Transformers has announced a $39m investment in a plant that will produce power and electrical-distribution transformers for regional and international markets.

    Lalan Middle East will invest a further $3.9m to expand its medical-device manufacturing facility.

    ALSO READ: Oman’s Madayn prepares $637m investment drive

    In Sezad, Al-Jazir Feed Plant will invest $104m in a shrimp-feed facility to support an integrated shrimp-farming project.

    In Salalah Free Zone, Al-Nawras Industries will invest $50m in a steel-structures manufacturing facility, while Integrated Gypsum Company will invest $20m in gypsum-products production. Marai Dhofar will invest $15.6m in the production of Italian cheeses and other dairy products.

    Projects in Khazaen Economic City include a plant by Aleemit International Services to manufacture electric-vehicle chargers and components, with an investment of more than $8.8m, and a $6.5m facility by Joger Modular Building Technologies to produce precast-concrete building components.

    Additional investments in Khazaen include construction materials, ready-mix concrete, industrial units, logistics facilities and warehouses.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21016368/main.jpg
    Indrajit Sen
  • Sabic swings back to profit in Q3 with $224m net income

    30 October 2026

    Register for MEED’s 14-day trial access 

    Saudi Basic Industries Corporation (Sabic) returned to profitability in the third quarter of the year, reporting adjusted net income of SR840m ($224m) as revenue and earnings improved from the previous quarter.

    The Saudi chemicals giant had posted an adjusted net loss of $100m in the second quarter.

    Revenue increased 14% on a quarter-on-quarter basis to $7.51bn, while adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) climbed 40% to $1.27bn. Adjusted Ebitda surged 434% to $578.67m.

    Sabic’s net debt stood at $808m as of 30 September compared with $728m as of 30 June.

    Adjusted earnings per share rose to SR0.28 ($0.07) from a loss of SR0.13 ($0.03).

    The recovery occurred despite persistent margin pressure across the global petrochemicals sector and heightened geopolitical risk in the Middle East.

    Additionally, Sabic said it achieved $949.33m of its broader portfolio optimisation programme target of $3bn by 2030 in positive recurring Ebitda impact from its transformation efforts.

    During the third quarter, Sabic received its Local Content Certificate for 2025 from the Local Content and Government Procurement Authority, recording a score exceeding 61% – an increase of more than nine percentage points over the prior evaluation period. The company attributed the increase to domestic procurement agreements, including a memorandum of understanding with Lenovo.

    Capital projects

    After several years of subdued project spending, Sabic is beginning to step up investment in new production capacity, with major projects reaching key milestones this year.

    In February, affiliate Petrokemya awarded China National Chemical Engineering Group Corporation the main engineering, procurement and construction (EPC) contract for a new ethylene oxide catalyst production facility. The 4,000-tonne-a-year (t/y) unit at Jubail Industrial City includes catalyst carrier washing, drying facilities and associated utilities.

    Major ammonia-urea complex

    In September, Sabic Agri-Nutrients awarded South Korea’s Samsung E&A a $3.465bn EPC contract for its seventh production complex in Jubail Industrial City (San VII).

    The project will have an annual capacity of approximately 1.2 million metric tonnes of conventional ammonia and 2.6 million tonnes of urea, integrated with a post-combustion carbon-capture unit.

    The Ministry of Energy approved feedstock allocation for the project in March. San VII will expand the company’s total urea capacity by 54%, from approximately 4.8 million t/y to 7.4 million t/y.

    The development reflects a shift in project scope. Originally conceived as San VI – a low-carbon facility designed to yield 1.2 million t/y of blue ammonia alongside specialised nutrients – the scheme was re-engineered as a conventional ammonia and urea plant using carbon-capture systems to manage emissions intensity.

    Construction is scheduled to begin in the fourth quarter of 2026. Commissioning is slated for the third quarter of 2030, with full commercial operation targeted before year-end 2030.

    Sabic Agri-Nutrients positions the project as central to its 2040 strategy to expand export market share and support international supply chains.

    Greenfield methanol plant

    San VII is not the only major project moving forward.

    Also in September, Sabic subsidiary Saudi Methanol Company (Ar-Razi) secured feedstock approval from the Ministry of Energy to build a 1.8 million t/y greenfield methanol plant in Jubail.

    The project aligns with Sabic’s focus on scale in core petrochemical chains and provides intermediate feedstock for expanding domestic downstream manufacturing.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21015944/main2510.jpg
    Indrajit Sen
  • H&H continues to deliver Dubai projects

    29 October 2026

     

    Dubai-based developer H&H has launched Water Gardens, a mixed-use development in Dubai International Financial Centre (DIFC), and expects to award most of the construction contracts for its wider pipeline before summer 2027.

    Water Gardens comprises four buildings designed by UK architect David Chipperfield, arranged around a central garden and pedestrian-friendly public realm. The scheme combines offices, residences, hospitality and retail offerings, including the Four Seasons Private Residences Dubai at DIFC and residences under H&H’s Eden House brand.

    Construction is under way, and the developer says the project is scheduled for completion in 2028. DIFC Investments describes it as one of the final components of the original Gate District masterplan.

    Speaking to MEED at the launch, H&H chairman Shahab Lutfi said the office building and Eden House are due for completion in about 18 months. The Four Seasons residences are scheduled for delivery at the end of 2028, with a five-star hotel following later.

    Water Gardens is one of several projects H&H has under way. The company undertakes a selective portfolio of high-end real estate developments in prime locations in Dubai. These include the Carlyle Residences in DIFC; an Eden Hills villa community in Mohammed Bin Rashid City; and Dubai Peninsula, a waterfront scheme in the Jumeirah area that will include hotels operated by Aman and Rosewood.

    “We are awarding day in, day out,” says Lutfi. “I think we are awarding most of our contracts from now until summer next year.”

    Most of the company’s construction volume is in DIFC and Dubai Peninsula, with the Eden Hills villas accounting for a smaller share. Lutfi says H&H is talking to several of the emirate’s biggest contractors about upcoming packages.

    We are awarding [contracts] day in, day out

    Staged procurement

    H&H is managing cost pressures by splitting up its procurement. It awards main contracts covering concrete works with a large number of provisional sums, then tenders further packages as designs are completed. “We are taking on some of the risk, but we know how to manage the risk instead of just offloading it on the contract,” says Lutfi.

    He does not expect construction costs to fall in the next 12 months. Global inflation, driven by fuel prices and logistics costs, is already factored into the company’s plans. 

    “Waiting and trying to award at a cheaper price is not an option for us,” he says.

    Lutfi says rising costs need not erode margins for developers that keep unsold stock to sell at higher prices later in a project. Developers that sell out early are more exposed. “If you have already sold out two years ago, you are hurting your profitability,” he says.

    H&H is comfortable leaving 15%-20% of a project to sell on completion. The market usually expects developers to sell out before handover. 

    The company has not revised its masterplans or product mix in response to market conditions and continues to focus on large units.

    Supply chains have been a challenge this year, but Lutfi says the company is over that hurdle. H&H has sourced more materials locally and planned logistics further in advance. 

    Materials are reaching Dubai through bonded routes from Oman, Fujairah and Khor Fakkan in the UAE, and Jeddah in Saudi Arabia. 

    “It takes a little bit longer, but at least things are coming in,” he says.

    H&H relies on a relatively small group of contractors that work on most of its projects, and treats them as long-term partners. 

    Lutfi says contractors are attracted by the company’s financial stability and volume of work. “That can keep some people busy for the next five or six years,” he says.

    Lutfi notes that sales in the Dubai market have dropped, although enquiries have picked up since the summer as buyers weigh whether it is the right time to purchase. The distressed sales that some had expected have not materialised.

    “A 5% discount in some units is not really a distress sale,” he says. “It is just someone trying to get a discount because of the region’s situation, which actually builds confidence.”

    For Water Gardens, H&H has sold 85% of Four Seasons Private Residences Dubai at DIFC since sales began in 2024. The company launched sales at the Carlyle Residences before the regional disruption and has since sold units one-to-one to selected clients. More Four Seasons units have been sold in the past two weeks. 

    “Branding makes a big difference,” says Lutfi.

    The company markets its branded residences through a global network of brokers rather than via public campaigns or launch events. Eden Hills, which is aimed mainly at Dubai residents, is marketed more widely.

    Lutfi expects buyers to be more cautious about buying off-plan. H&H is building new sales centres at Dubai Peninsula and in DIFC so that clients can see the product before they commit. 

    “People have to come in, know exactly what they are buying, and they will feel comfortable paying the price – instead of just having a pretty brochure,” he says.

    He expects demand for villas to become more local and regional, while branded residences will continue to attract international buyers. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/21012636/main.gif
    Colin Foreman
  • Riyadh Expo sets November bid deadline for Souq construction

    29 October 2026

     

    Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, has allowed contractors until 11 November to submit bids for a contract to deliver the Souq areas within the Expo site.

    The tender was floated on 30 July, with an initial submission deadline of 9 October.

    The Souq areas are divided into five distinct precincts, with a total development area of about 300,000 square metres (sq m).

    The scope includes the five precincts and their associated vertical elements, infrastructure and public realm works. 

    The precincts comprise:

    • Precinct 1 – The Icon: 41,417 sq m
    • Precinct 2 – Place & Planet: 62,306 sq m 
    • Precinct 3 – Culture of Wisdom: 67,112 sq m  
    • Precinct 4 – Kingdom of Saudi Arabia: 45,967 sq m  
    • Precinct 5 – Adaptation & Innovation: 82,358 sq m

    The package will interface with three public parks. It will also tie into the Natural Corridor, including bridges.

    The Souq areas will form a mixed-use destination at the centre of Expo 2030 Riyadh, connecting the site’s iconic and thematic assets.

    The development will include rented and partnership pavilions, alongside a range of food and beverage, retail and visitor-experience offerings.

    Site progress

    Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

    Earlier this month, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract to build a new metro station serving the Expo 2030 site.

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

    The scope covered 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 covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The masterplan covers 6 square kilometres, making it one of the largest sites ever 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 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.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20998514/main.jpg
    Yasir Iqbal
  • Iraq oilfield water scheme to hit milestone next year

    29 October 2026

     

    China Petroleum Pipeline Engineering (CPP) expects to start laying pipeline for Iraq’s Common Seawater Supply Project (CSSP) in Basra in mid- or late next year, according to industry sources.

    The project is behind schedule, partly because importing sections of pipeline is proving challenging due to disruptions to shipping through the Strait of Hormuz.

    The project is being managed by state-owned Basra Oil Company (BOC), with Australia’s ILF acting as a project management consultant after completing the front-end engineering design (feed).

    Under current plans, the pipelines will be buried, which is expected to make them more secure than if they were installed on the surface.

    Phased development

    The client for the first phase of the CSSP is France’s TotalEnergies in partnership with QatarEnergy and BOC.

    The first phase is split into two packages currently under execution and will ultimately have the capacity to transport 5 million barrels a day (b/d) of water.

    The first package focuses on developing pipelines, and the second on developing a water treatment facility.

    CPP is executing the pipeline package contract.

    It signed a $2.5bn contract with BOC for the package in September last year.

    Also in September 2025, South Korea’s Hyundai announced that it had signed a contract worth 4.39tn won ($3.16bn) for the processing plant package.

    In September this year, MEED reported that early groundworks had started for both packages of the first phase of the CSSP.

    Phase one of the project is scheduled to start up in late 2028 or early 2029.

    Earlier this month, US-headquartered Exxon Mobil signed a memorandum of understanding related to the project’s second phase, which is expected to add 2.5 million b/d of water capacity.

    The CSSP will inject processed water into several of Iraq’s biggest oil fields. These include Rumaila, Zubair, West Qurna 1, West Qurna 2 and Majnoon. Water from the project will also be used in the Maysan and Dhi Qar fields.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20981033/main.jpg
    Wil Crisp