EPC Interview with Bryan Glover, President & CEO, Honeywell UOP

Well thanks Mark. I look forward to seeing you and everyone else in Bahrain. Great to talk today.

Yeah, I think that's a bit of a challenging question. There's no doubt when we look at the distribution of energy use today, as we transition to a lower carbon future, hydrocarbons are going to be with us for quite some time. Certainly the amount of primary energy provided by hydrocarbons today will take some time to be displaced by other energy sources. So in the meantime, it's important that we all do the most we can with the hydrocarbon usage we have today, which really means using hydrocarbons for energy and petrochemicals as efficiently as we possibly can. One way this will come into play is through additional use of natural gas in the future as a transition fuel — a hydrocarbon fuel at the lower end of carbon emissions. The current environment makes increased use of natural gas a little challenging, but I think as we go forward and have a more stable supply situation, we'll continue to see greater reliance on natural gas as that transition fuel. In terms of crude oil, the most important thing is for companies to understand where they are today and what their strategy is in the future — whether to shift more heavily to petrochemicals, change the types of fuels they're producing, or other approaches. First and foremost, everyone needs to understand their future strategy. Then the next thing is to start making slow and steady progress. Like anything, it's as much about starting as finishing. If we don't get started, we know we'll never finish. When we talk with people about a future strategy, it's really identifying those early steps that start on a path to a more sustainable future but are accretive. No one wants to make investments early on that just need to be replaced later. So we focus with people on how to make progressive and accretive steps along the way. Certainly the efficiency of processing hydrocarbons — whether to fuel or petrochemicals — is probably the most impactful thing people can do now. Minimizing energy consumption, water consumption, and capital inputs in processing are all important. One of the other key steps is the efficiency of hydrogen use in the process. We know hydrogen can be a significant contributor to CO2 production in the world, so using hydrogen efficiently in a refinery or petrochemical plant is very important. Having the right technologies to use hydrogen in the most efficient way to transform molecules from crude to the chemicals or fuels customers want is critically important. We find that's where a lot of the initial low-hanging fruit is — in better hydrogen management, either better hydrogen capture, reducing hydrogen consumption by routing different feedstocks in different ways, or using them for different purposes. There's a lot that can be done at the start of the journey to get people towards those first steps of reduction in carbon intensity. In many cases, especially around hydrogen, those can actually have a return given that hydrogen is a valuable commodity and expensive to produce.

Yes, that's right. Sometimes those things are obvious, but other times they're less obvious. What I can say is, when I think about UOP, there's a lot of new technologies and emerging solutions we've been working on that didn't even exist five and ten years ago. What we find is there's not always as much awareness as there could be of some of the new options and technologies available. So I think that's where it's really valuable for someone looking at this journey to sit down with somebody like UOP and talk about the 'could be,' because the 'could be' is different today than it was even ten years ago.

Yeah, I think collaboration is very key today, especially because the problems we're trying to solve are more complex. In many cases the answer can come from a single source or entity, but in other cases it requires more than one organization working together to provide a full, broad-spectrum solution that really gets us where we need to go. As a company, we've always collaborated with other parties to bring new technology to the market, but I think we find today that we're collaborating more than ever in order to bring new solutions to the market — whether in the area of carbon capture, hydrogen production, decarbonization, or new fuels from biosources. In all those cases, the challenge becomes more complex and the speed of change increases, which really increases the opportunity for companies to work together to bring broader solutions to the market.

Yeah, well I think the region in general is well positioned to bring lower carbon solutions to the industry. A few things that are in its advantage: one is that for the most part it's a producing region, so having downstream in combination with production increases opportunities for things like carbon capture and storage. Not all regions can support that, but certainly in much of the MENA region that becomes a very realistic opportunity. There are technologies today that are readily available from UOP and others — technologies like our cryogenic carbon capture or our advanced solvent technology that can be readily applied to capture CO2 both pre- and post-combustion, and then in a region like MENA, there's opportunity for sequestration. Beyond that, there's significant opportunity within the region because it's a significant exporting region to tailor production to the most targeted products — whether petrochemicals or fuels — produced with the lowest potential carbon intensity. The fact that the region in many cases is exporting products gives the region an opportunity to tailor products to things that are lowering carbon intensity and to potentially maximize petrochemical production while minimizing the potential for some of the more carbon-intensive fuels. I think those are some of the main opportunities for the region, but any given operator, refiner, or petrochemical plant can look beyond that because everyone will have specific needs or site-specific opportunities depending on what resources are available on the ground. I think that's one of the important things when we think about long-term sustainability — taking advantage of the asset base you have today. One of the most sustainable things you can do as you transform a plant is to use what you've got and minimize the amount of new infrastructure that needs to be included. Within the region, I think there's good opportunity to look at the asset base and the transformations that make the most sense based on the crude or feedstocks available and the product mix. As I say, being a large exporting region provides additional flexibility in product mix that some regions might not have, and it can allow producers in the region to really target their operations to exactly what they want to accomplish strategically.

Well, I think major investments will continue. Many producers in the region have the advantage of local and relatively low-cost feedstocks, and the region is going to continue to grow because of that — producing for domestic needs but also for export, taking advantage of the rich resources available. But I think it's a balance. It's a balance of adapting assets already available in order to adapt existing plants, as well as building out new facilities and new infrastructure to meet future needs. Examples are things like crude-to-chemicals — we see that as an increasing area of interest and an area where we and others have spent a lot of time. There are new technologies available there that weren't even available two or three years ago that can make these kinds of projects very attractive today at capital intensities much lower than people would expect, through new technologies that really manage the molecules within a crude, manage the amount of hydrogen addition, and can get there very selectively. Technologies like that are probably well used in new facilities, and some of those can be retrofitted in existing facilities. But again, it's about a balance of smart investments in new facilities and then really smart retrofits maximizing the value of existing assets.

Well, I think especially in the transitioning world today, conferences like this are really helpful because they create an environment for what I'll say is challenging conversation. We bring owners of operating assets together with technology providers and others that work in the industry to talk about solutions, so we get new ideas out there. But then conferences like this also lead to interesting, challenging questions — as asset owners pose questions to panels, pose questions to speakers, and have discussions at the breaks. We as a technology provider maybe didn't have before — we hear intriguing and provocative questions. People who are potential customers hear about technologies that maybe they didn't realize were available or didn't understand to be mature. So I think it leads to a lot of good discussion both formally in the sessions and outside the sessions about the 'could be,' and I think that's the really important thing. When we really start together to talk and push each other about the 'could be' state, then we start to identify solutions that maybe weren't apparent to anyone going in, because we either didn't fully understand the situation someone is facing or someone didn't understand the array of opportunities available to them. I think we find that solutions in many cases are closer at hand than we thought, or we get a better idea of what sort of adaptations need to be made either in strategic plans or in technology development to meet those situations. So I think conferences like this move the conversation along at an accelerated pace by bringing people together in one place to talk about problems and challenges and to challenge one another to think about how we can best solve those.

Yeah, I think that's right. Collaboration and conversation are important because until we all understand each other's challenges and each other's opportunities and capabilities, we really don't necessarily get at the full solution to a problem.

Okay, thank you Mark and look forward to seeing you in Bahrain. Thank you.