What customer services does Linde provide in Abu Dhabi?
The majority of the business segments that we are engaged in can be clustered primarily into: Linde Engineering, which is the technology and execution arm of the group; Linde Gas, one of the world's leading industrial gasses suppliers with a considerable contribution to the group's revenue; and the Healthcare, a relatively new and very exciting field that has been augmented through a major acquisition in the US. Linde Engineering's business model is basically a technology-based EPC, meaning a comprehensive value proposition around our broad range of in-house technologies from upstream gas treatment, to midstream LNG, all the way to downstream in petrochemicals and chemicals. With its own specific market cycles, Linde Engineering has grown steadily over the past decade to revenues of between €3.5 to 4 billion. On the upstream side, we do natural gas treatment based on in-house and also external partnerships. Along that line comes nitrogen rejection units, sulfur recovery, and of course LPG extraction, which has been booming in the US thanks to the shale gas revolution. In the midstream segment, Linde is one of main players in the field of LNG technology. In this field and in addition to mega projects, we focus on midsize and smaller-scale opportunities that have their own momentum fueled by the era of distributed energy and enhanced monetization of the gas reserves. Downstream petrochemicals are also a focus market segment for Linde Engineering, built around several in-house patented technologies and innovative solutions that are aimed at adding value to our customers' operations. There are several flagship projects to mention here, but a lighthouse accomplishment in Abu Dhabi is Borouge III, the world's largest ethane cracker. It is undergoing the final steps of completion with a significant track record of safety and execution. I believe the relationship here has been very successful and transformative and we are proud to have been working closely with Borouge and ADNOC on this prestigious project. The strategic partnership between Linde and ADNOC goes beyond, whereby an industrial gases joint venture, the Elixier, was established. It has been a considerable size of capital investment—around $1 billion—and a manifestation of the strong and trustful partnership.
What are the main opportunities feedstock diversity offers to the industry in Abu Dhabi?
It is absolutely significant. It could potentially become an opportunity. This is where we believe technology leadership and collaboration is key to the challenges ahead. The gas shortage became a reality in the region. The ability to manage heavier feedstock, in particular liquids like Naphtha, is the bridge. The most interesting takeaway here is that technology not only enables also aims to make ventures more economically attractive. Linde is a leading player in this domain, on one side due to the decades of experience and excellence in liquid cracking and on the other side with new enhancing technologies and solutions. What we call it “value cracking" is a game-changing solution whereby optimization of the streams and derivatives in a liquid cracker creates more value that then enhances the economics of the system. There are other well-established trends, including the integration of the refinery and petrochemicals, which basically builds on feedstock synergies, scope, optimization, and, of course, cost synergies. In an ideal scenario, Takreer and Chemaweyaat may have an opportunity to build on these synergies.
What is your strategy in terms of R&D?
R&D is beyond a priority for us in the hydrocarbon industry; it is more like a necessity to remain in the game. To be honest, this is not just a strategy for Linde Engineering, but for any technology-based company in this industry. If you want to lead the game, then you need to have a different game plan, or a combination of several initiatives. You have to build around existing developments to improve what you have and push the boundaries to make more out of the same. The second is disruptive innovation, whereby you go beyond by creating a solution for a challenge that previously had no solution. The third aspect is a hybrid of the two, whereby an evolution of an existing technology becomes a solution to a challenge.
How would you assess your relationship with ADNOC?
The industry has become so complex and volatile that, without trustful and successful partnerships, business ideas become more of a theory than a reality. Without a proper partnership, it is impossible to create value, to grow, and of course to succeed. When looking at ADNOC group, you see a very interesting and broad mix of opportunities, from upstream gas and LNG terminals all the way to downstream and petrochemicals. There is solid opportunity for collaboration and partnership, as we at Linde has attained, given its harmonized leadership, financial excellence, transparent strategy, and rich human resources. What Linde offers is the advanced technology, execution excellence, and know-how development. As part of our commitment to make ADNOC able to achieve its Emiratization targets, we have been training Emiratis and young talent and we are proud to see them growing into the next generation of leaders and experts. Our olefins academy has been a solid platform for this development and we are committed to continue with this.
What does Abu Dhabi represent for Linde Engineering as a location?
First and foremost, it is a stable business environment, with well-established infrastructure and systematically developed processes. It is easy to operate, and access to the human resources that you need is easy and also attracting the right people possible given what the country offers as a safe environment for people and their families to live in, which is a very important factor.
What is your vision for the future of the EPC sector in the Middle East and the growth of Linde Engineering within that?
I believe a new cycle has just started. It is associated with successful completion and coming on stream of megaprojects, enhancements in brown fields in the context of efficiency, sustainability, and process optimization, and, of course, operational excellence. On the other hand, technology-based developments such as oil to chemical, downstream integration, hydrogen networks and CO2 capture, and EOR free up natural gas and will likely gain more momentum. On the third-front comes an acceleration in the development of human capital. We are excited to be part of this journey. We are determined to continue our efforts in being a trusted technology partner to the industry. And we are well committed to contributing to the success of our customers and partners in developing their sustainable further development and expansion of their human capital in different parts of this region.
© The Business Year - January 2015