Mar. 9, 2016

Jasem Ali Al-Sayegh

UAE, Abu Dhabi

Jasem Ali Al-Sayegh


"Refineries are really under pressure as their margins are not nearly as good as those in upstream businesses."


Jasem Ali Al-Sayegh has been the CEO of TAKREER since 2006, having previously worked in several other positions for the firm, as well as for ADNOC. He has a degree in Chemical Engineering from the University of Washington.

TAKREER wants to be recognized as a pace setter in creating sustainable value growth through innovative energy solutions. How are you bringing your energy solutions to market?

TAKREER is trying to be the best in the refining industry and capitalize on the opportunities we have here in Abu Dhabi. The opportunities we have are in our large industrial base, upstream. We have a good supply and we have other downstream industries we can integrate with by providing them with the necessary feedstock or other additives. We not only want to be a provider of transportation fuel, but we also want to maximize the benefits to the country by integrating with local industries and diversifying our production.

Looking at the products that you produce—naphtha, kerosene, gasoline, and diesel fuel—how are these reflecting the market needs here?

Typically, we have been producing transportation fuels and other products that we normally export. However, we are trying to move away from our typical production and basically maximize the benefit of each barrel. With the new expansion, and our heavy oil conversion project called the Carbon Black & Delayed Coker Project-CBDC, we will be moving toward diversifying our production. For example, we will be adding polymer grade propylene, which is the fodder for the petrochemical industry. We will also continue to produce naphtha and export it, but in addition we will make it available for local industries within Abu Dhabi that want to develop other petrochemical industries. Until now, this naphtha has normally been exported, to be used in the same industry, but in foreign markets. In Abu Dhabi now, there are growing numbers of environmental regulations and all the transportation fuels have to meet Euro 5 specifications. In other GCC countries, they call them clean fuels. In the Emirates, we have managed to achieve this standard. For example, in July 2014 legislation came into force here that all diesel has to meet Euro 5 specifications, which means very low sulfur content of less than 10 ppm. This is part of the government's vision to control emissions and ensure sustainable development within the country. We managed to achieve that and were in fact ready earlier than required with the completion of our Green Diesel Project in 2012. With our CBDC project, which is under final construction now, we will also be able to convert all the heavy oil into more valuable products. For example, into calcined coke, which is a specialized material, not a fuel grade, and which will be used in the local aluminum smelting industry. Again this is part of our diversification process and the provision of feedstock to the local industries around us. Another example is base oils, which will be produced by early 2016 after completion of the Group III Base Oil Project to enable us to enter the lubricant market. Group III Base Oils have high viscosity and are more environmentally sustainable as they last longer than the traditional Group I base oils.

How is TAKREER's largest site, the Ruwais Refinery, connecting to large projects and other companies in terms of integration and facilitating business?

We recognize that this industry is a margin-driven industry. Refineries are really under pressure as their margins are not nearly as good as those in upstream businesses. There are three main factors that will enable us to boost our margins and make us more economically robust. One factor is scale, as this allows us to distribute our costs more effectively in terms of dollars per barrel. Complexity is another important factor. You need to have deep conversion of crude oil to extract lighter and more viable products. The third factor is integration. If your refinery has a nearby petrochemical industry this will save capital expenditure and operating costs for both industries. Of course, you also need to expand to cover the local market's requirements in terms of transportation fuels and petrochemical feedstock. When we were looking at our expansion we had these three elements in mind to ensure that we would in fact be in a stronger economic position afterwards. With the new refinery, we managed to achieve all these elements. In terms of scale, we have doubled our capacity by moving from 500,000 to more than 900,000 bpd. The Nelson Complexity Index (NCI) measures refinery complexity and, after our expansion, we will reach a complexity factor of more than 14, which covers highly complex facilities. The higher you get on the scale the better your margins are. In terms of integration we are now connected to Borouge. We produce propylene that goes to Borouge as feedstock and we are importing its by-products in return. This is a saving for both companies in terms of investment and the associated operating costs. Once we stabilize our operations we will see the benefits of all of this.

How does this relate to the wider economy and the mandate to make Abu Dhabi self-sufficient in gasoline, in order to boost income and GDP?

Importing refined products is not particularly wise, especially when you produce crude oil. It does not make sense to import a product when you can make it here with your own facilities and people, and add to the GDP. This new refinery will be self-sufficient in gasoline. We do not import jet fuel or diesel as we were already self-sufficient in these products. As a matter of fact, with the new refinery our exports will increase. When you build a new refinery you do it with the next 30 years in mind, not for the short term. Of course, exports will shrink with growth, which is normal. However, for gasoline we have only designed the operations for the local market and we are not thinking of exporting.