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I regularly attend conferences and I was particularly eager to attend GDA this year because it came at an interesting time for the Middle East’s refiners. The energy transition is happening, and there is no avoiding it. This is most apparent in North America and Europe, where asset owners have already started their decarbonisation journeys. But can Middle Eastern refiners take these learnings and plan their pathways to decarbonisation?

Further, what are the critical turning points that they could face? With long-term diesel and gasoline demand set to decline, can they continue to operate as normal, in terms of producing fuels? How will they tackle meaningful decarbonisation? What will future demand for oil-to-chemicals look like? Having attended a number of panels and observed, first-hand, what people were really saying, I drew some key conclusions.

Chemicals will drive the future of oil

From a Middle Eastern perspective, most of the companies in the Gulf have oil and gas reserves that they rely on for revenue streams. Utilisation of these oil reserves aligns well with the projection that the world population is set to grow to 9 or 10 billion by 2050, and that there will be huge demand for energy. With increasing urbanisation, the demand for chemicals will also grow.

An emerging theme here is oil-to-chemicals. At the conference, “chemicals will be driving the future of oil” was a significant, often heard statement. Although interest in this theme cooled during the global COVID-19 pandemic, everyone is again bullish that chemicals are the future for oil. This is more than just talk, and I was genuinely surprised to learn about confirmed projects on the ground. This sector is likely to attract a lot of investment, and further opportunities may surface, so oil-to-chemicals looks set to grow. For me, that was the first key message to emerge from the conference.

I presented at an expert workshop with the theme of “Key pathways for decarbonising refinery and petrochemical assets to accelerate the transition to net-zero emissions”. The discussion focused primarily on increasing operational efficiency, making lower-carbon fuels such as biofuels and hydrogen, and capturing and storing emissions; Shell Energy and Chemicals Park Rotterdam was cited as an example. I sensed a lot of interest from major companies. Shell Catalysts & Technologies is a leading technology provider for CO₂ capture and blue hydrogen production by gasification, which additionally enables residue upgrading to produce syngas and hydrogen. Through syngas we can develop the whole value chain of chemicals, which really is the future.

In contrast to Europe, the Middle East might have to think about different options for producing sustainable fuels owing to the lack of biofeedstock. One option may be to explore co-processing of biofeeds to produce co-processed diesel. I do not see hydrotreated vegetable oil being as important in the Middle East as elsewhere, owing to the feed limitation.

Energy security is a key vision in the region

The belief among refiners in the Middle East is that, today, the most critical issue is energy security, which, perhaps because of the Russia–Ukraine war, has become sharply focused on people’s minds. For refiners, the response is to continue supplying energy products to people inside and outside the region.

It is the refiners’ intention that, while there is a requirement for conventional fuels, they will continue to provide them. Although there is much emphasis on renewables and other energy sources, Middle East refiners are still there to provide conventional fuel sources for as long as they are required, and they are not switching to renewables any time soon.

This is not just an issue for the Gulf context, but an international one. With energy security high on the global agenda, the refiners, as the major resource holders, are concerned about the energy security of others, but the subject is of vital importance to them.

Pathways to decarbonisation

In my view, other industry conferences, such as ERTC in Europe, are no longer purely “refining” conferences, having steadily become “decarbonisation” conferences instead. We need to contemplate the thinking behind this. In Europe, including in the Nordic countries and the �鶹��ý, there is a mindset to move to green technology and to reduce the consumption of hydrocarbon fuels. This has generated societal pressure, and European refiners are now operating in a different space from that found in the Middle East.

There was a lot of discussion at the conference about decarbonisation and what needs to be done to achieve this. In fact, both of my presentations centred around pathways to decarbonisation. For example, when I explained that Shell is already capturing the carbon dioxide from the hydrogen manufacturing units at its Quest project in Canada, it generated much interest and a lot of questions. People were asking specifically about how this can be achieved.

It was apparent that there is widespread acknowledgement of the need to decarbonise in the region. However, the first priority is to optimise assets in terms of energy efficiency, integration and flexibility when considering feedstock and products. After that, there are plans to gear up for decarbonisation in the near future.

For example, in Jubail, where there is a refinery and petrochemical hub, the intention is that local industries will join hands and route all their carbon dioxide emissions into a header for sequestration. In my view, developing carbon dioxide sequestration would be wonderful, so it is reassuring to hear this positive news, and there are further projects planned in the next few years. However, no business can do this alone, and there is widespread recognition that collaboration is crucial. At the same time, governments need to provide the right policies and infrastructure to really enable this transformation.

Conclusion

In conclusion, the GDA conference provided valuable insights into the future of the industry in the region. From the discussions and presentations, it is clear that chemicals will play a crucial role in shaping the industry's future, with energy security being a key driver of development.

And, for me, there was another useful takeaway: with project activity returning to pre-pandemic levels there is a reassuringly positive atmosphere in the region. As the region continues to play an essential role in the global energy market, I look forward to applying these insights to my work and contributing to the region's ongoing success.