Could you introduce Lummus Technology and the company’s presence in Southeast Asia?

Our history in Southeast Asia dates back to about 40 years with the start of the petrochemical industry, following a surge of oil and gas discoveries in the Gulf of Thailand in the 1970s. We grew with the market to provide solutions to the petrochemical complexes, first on gas-to-ethane processing, and then naphtha and mix-grade/ feed (naphtha and LPG) technologies, before moving downstream to butadiene extraction, C3 olefin conversion and all the intermediates. Besides conventional process licensing from gas/oil to petrochemicals, we now also have a wide variety of technologies in the polymer and clean energy space.

Lummus was at the forefront of transitioning to a technology licensing business model. Before that, most technologies came from EPC contractors, but as producers became more sophisticated, you could see a growing trend from the year 2000 onwards of plant owners preferring to select the technology first. Lummus saw an opportunity and brought in the concept of “master licensing.” We have worked on some of the largest and most modern complexes, from Petronas’ RAPID, which is now called PREFChem, in Malaysia to Thai Oil’s clean fuel project in Thailand, where we supplied a hydrocracker and LC-Max integration unit. Our EverGreen™ ethanol-to-ethylene process technology, a Braskem based technology license, was also introduced in this region with Braskem and SCG's new JV in Thailand, called Braskem Siam. 

What are the current demand trends in the Southeast Asian market?

Most of the crackers in the region are naphtha-based, so elevated oil prices have meant very narrow conversions for the players in SEA. Last year some of our customers turned off their plants, and some even preferred to sell the naphtha feedstock in the spot markets rather than converting it to olefins. Polyolefin oversupply from China has reduced prices to such an extent that some clients say it is cheaper to import from China than to produce in-country. Years after the pandemic, plants in the region are yet to return to full capacity. The investment and feedstocks have shifted to the Middle East and India, while Southeast Asia has turned into more of a “dumping ground” for imports. So currently the market is in a state of survival. Producers are not making large investments, but they are looking at ways to modify their plants to make products with better yields. This situation has also challenged us to be more creative and work harder to help our customers re-position themselves and upgrade their products. For instance, if the C3 market is doing very poorly, we can deploy our olefins conversion technology to produce other products. 

The petrochemical sector is busy surviving today, yet there is a longer-lasting force driving this market and that is the energy transition. Lummus has been busy developing and expanding our energy transition portfolio. In 2023 alone, we added 16 new technologies to our portfolio, either through acquisitions, partnerships, or in-house development. These include ethanol to ethylene, plastics pyrolysis, carbon capture, ethanol to jet fuel, digitalization solutions, and many more to come. 

Our customers are also thinking about sustainable solutions; for example, some producers are looking at pyrolysis.  Lummus offers a pyrolysis process that can integrate pyrolysis oil into crackers and refineries. Lummus recently invested in Resynergi, a plastic recycling technology to convert plastic waste into reusable materials much faster than traditional pyrolysis methods. 

Do you see scope for more crude-to-chemical refinery scale-ups? 

The EV revolution and the impending plateauing in gasoline and fuels will drive more crude-to-chemical conversions. And companies are looking at it, but the question is one of scale and competitiveness. It will be difficult for the Southeast Asian players, who fall more on the medium size, to compete at a good conversion-per-ton rate.  Though customers are assessing these possibilities, right now gasoline prices are quite good while olefin prices are not. As a feedstock net importer with a lower scale compared to its global competitors, Southeast Asia will have to diversify to more specialty or value-added products. 

Do you have a final message for our international audience?

Networking, collaborations, and repositioning to more advanced materials will be key.