The MENA region is both a region in the midst of change and still a major land of growth for the industrial gases industry.
There are significant challenges to be overcome in the near term, however, and market participants need to adjust to a repositioning that’s underway across many countries in the region if that potential is to be truly realised.
Those were the key messages from an intrepid morning of discussion and debate at the MENA Industrial Gases Conference 2019 here in Dubai, UAE, where more than 200 delegates from around the world have gathered for the event.
Held at the Hilton Dubai Al Habtoor City hotel complex, the conference is addressing the theme Business Models Fit for Purpose in the Middle East and North Africa over the course of its 2.5 days exploring the challenges and opportunities facing the region as it moves forward into the next decade, through a series of pointed panel discussions and regional case studies.
The MENA region has experienced huge change in both supply models and actual demand for industrial, medical and special gases over the last decade.
There has been the significant entry of the major gas companies such as Air Products, Air Liquide, Linde, Messer and Praxair, which have focused not only on the major onsite projects that have arisen across the region but also on acquiring positions in the merchant market. There are changes at the customer level, with the large energy companies focusing on downstream oil and natural gas – giving rise to more investment projects at tonnage gas consumption levels, but also impacting demand for merchant gases.
This was reflected on by gasworld Publisher and CEO John Raquet in his official opening of the event. He explained, “The region is facing several challenges – it is clear that many independent companies are starting to feel squeezed.”
“Industrial gas prices have declined in many countries due to the increased competitive environment; but another challenge comes from the rising costs of doing business within the region. So our theme over the next two days – Business Models Fit for Purpose – aims to address some of these challenges you face and hopefully provide some answers.”
“The gasworld team have invited speakers rich in knowledge and experiences to help you address how best to manage and run your businesses,” Raquet added. “We will mainly focus on the merchant gases business within the region and have invited speakers to share some of their experiences in the form of case studies to enhance your thoughts and ideas.”
It was then the turn of Seifi Ghasemi, Air Products’ Chairman, President and CEO, to take to the stage to deliver his eagerly awaited opening keynote titled From The Cradle of Civilisation to Energising the World.
Energising the world
Ghasemi became Chairman, President and CEO of Air Products in July 2014. In this role, he is focused on setting the strategy and policies of the company, developing leadership, and meeting shareholder commitments.
On the gasworld stage in Dubai, Ghasemi passionately described how the Middle East is the region “where human civilisation, as we know it, really began,” adding, “The people of the Middle East should be proud of their past and aspire to reinvent their past glory.”
He also pointed out that the Middle East region has the greatest concentrations of hydrocarbons in the world, and abundant sunshine to be converted into clean electricity and hydrogen fuel. “The Middle East has excellent potential for growth and prosperity,” he emphasised. “That is why we want to significantly expand our presence here.”
Air Products is already in the midst of growing its activities in the Middle East region and the company has built the world’s largest industrial gas complex in Jazan, Saudi Arabi.
Ghasemi noted that Air Products has also established a world-class technology centre in the Dhahran Techno-Valley and is in the final stages of negotiations to acquire, start-up and operate the world’s largest gasification facility from Saudi Aramco.
“We have already committed to invest more than $12bn in industrial gas projects in the region,” Ghasemi said.“We see significant additional opportunities in this region. We are proud to be in this part of the world, and we are committed to perform and create value for our customers.”
Day 1 proceeded thereafter to delve deeper into the challenges and change in the region, with topics including Successful Business Models, Downstream Project Activity in Oil & Gas, The Regional Industrial Gas Landscape and Qatar – Surviving and Repositioning Priorities.
Omar Germouni, General Manager of Air Liquide Al Khafrah Industrial Gases, began in earnest with his presentation of Successful Business Models, drawing upon his two decades of international experience harnessed in North America, Europe and of course the Africa-Middle East.
“I’m going to talk about the business models that I believe are important for the gas companies in this region, and what a successful business model means for our industry, and in this region in particular.”
Germouni proceeded to discuss the importance of a value proposition, and devising that proposition with the customer and not the shareholder in mind, as well as mass markets, niche markets and the threats and opportunities ahead. Uberisation of the industrial gases industry is not to be under-estimated, he noted, while the tipping point for ’beyond oil peak’ was a topical area of discussion for the region. “The growth is not where oil is,” he added, “it is going to be somewhere else.”
It was then over to Nataraj Kuhan, Consulting Director for Middle East & India at IHS Markit Chemical Consulting, to discuss Downstream Project Activity in Oil & Gas.
A seasoned chemical consultant with a total experience of 17 years, Kuhan explained how the outlook in oil and gas markets and petrochemicals is shifting. Though a temporary situation, he explained how security risks remain high after attacks on oil tankers and Saudi Arabia oil facilities, how Saudi Arabia’s real GDP growth has moderated significantly in 2019, and the impact all of these dynamics are having.
Demand for petrochemicals is growing more rapidly than fuels, he added, while COTC (Crude Oil To Chemicals) will become a key area of growth for the petrochemicals industry. “Industrial gases will play a key role in COTC operations,” he said, ”COTC will lead to an increase in the demand for industrial gases.”
“This will be a key enabler for the industrial gases business going forward.”
Rounding off the first session, it was over to gasworld’s own Business Intelligence Manager, Karina Kocha, to present The Regional Industrial Gas Landscape in MENA.
Kocha described how the market has changed significantly over the last decade, with average annual Middle East market growth of 5.9% from 2008-2018, and average annual growth of 5.2% in the GCC region specifically in the same timeframe.
In North Africa, there has been average annual growth of 3.6% in this period (2008-2018) too.
Regional case studies
After a Q&A panel and following coffee break, Session 2 resumed the activity with an exploration of Regional Case Studies, Chaired by Cryostar’s Hassina Rekima.
First up was Frank Brunsdon, General Manager of Buzwair Gases Qatar, a role he has held for the last 12 years. With over 30 years of ‘the most memorable and exciting times’ in the industrial and specialty gases industry and ‘still experiencing new gas applications and technologies with hands on knowledge today’, some of the most frequent questions Brunsdon faces today are about Qatar and its helium and industrial gas developments in recent years.
In his talk, titled Qatar – Surviving and Repositioning Priorities, he gave an honest and gritty assessment of the competitive market that exists in Qatar today, as well as the wider trends shaping the Qatari market/economy and addressing how smaller, local companies can not just survive, but thrive.
“How can local, smaller gas companies survive in the Middle East? Where are we going for the next 10 years? How can we grow?” he asked.
Brunsdon proceeded to show a picture of algae and describe its many versatile applications, as just one example of a new application and investment opportunity that has not only emerged – but Buzwair Gases has taken advantage of. Investment in new applications, together with investing in the re-development of regional countries, environmental compliance opportunities and staying up-to-date with standards and certification were the four factors Brunsdon described as a means of surviving in the industry today.
It was then left to Global Gases Group’s Swapnil Vichare to complete Session 2 with a discussion of Offshore Services.
Having given an introduction to the Global Gases Group, Vichare explained where diving gases and construction gases are used in offshore applications such as below oil rigs or in laying offshore pipelines, or even in hyperbaric and saturation chambers.
Speakers, sponsors, delegates and exhibitors alike are all now enjoying the sumptuous lunch break and networking opportunities provided by Silver Sponsor Dohmeyer.
Director Fabian Van Damme took the opportunity of the MENA conference and the company’s Silver Sponsorship to announce a brand new development with its partner Taylor-Wharton. The two companies, via Dohmeyer, have unveiled a new distribution centre in Jebel Ali which will provide the entire range of Taylor-Wharton products, for the entire GCC region.
Van Damme told gasworld, “I am delighted and inspired by this great new centre, and proud to partner with such a renowned brand as Taylor-Wharton. This is a great step forward in the region.”
A four-hour afternoon booth programme and networking window conclude conference day one, with no less than 40+ key product, equipment and services innovators all showcasing their value-add and building on the strong footfall observed the day prior.
The evening will see an official Conference Dinner and Reception provided by Gold Sponsor Air Products, and featuring an insightful after-dinner speech from Naji Skaf, President of Air Products Middle East, Egypt & Turkey.
Conference day two resumes tomorrow morning with a keynote from SOL Group’s Renato Imeri and with topics ranging from Optimising Cylinder Filling in the Middle East to CO2 Market Dynamics and Driving Safety within the Region.
A keynote from Phil Kornbluth, President of Kornbluth Helium Consulting, will officially close the event tomorrow, a first for gasworld events.
Follow the conference online
Stay up-to-date with all the latest news, views and developments at the MENA Industrial Gases Conference 2019 via the gasworld website, updated throughout the event.
gasworld will also tweet updates during the conference, which you can follow and interact with on Twitter using the hashtag #GWMENA19
A full review of the conference will be published in the January 2020 global edition of gasworld magazine.