Innovation:an imperative for downstream industries

Medhat Tannous, senior R&D director at Honeywell UOP, discusses the role of innovation in shaping and advancing the GCC's downstream sector

Medhat Tannous is senior R&D director at Honeywell UOP.
Medhat Tannous is senior R&D director at Honeywell UOP.

Medhat Tannous, senior R&D director at Honeywell UOP, discusses the role of innovation in shaping and advancing the GCC's downstream sector

What is the role of innovation in the downstream industries in the GCC?

The GCC has continued to grow and develop its refining capacity and also its petrochemical industry making it a major global player in the downstream. What has continued to change in the industry landscape is the need to handle more challenging crude slates, to build more complex refining assets, to effectively integrate refining and petrochemical assets in order to extract more value out of every barrel of crude produced. All of this is also largely driven by the growing domestic demand for fuels and also the drive to diversify economies which now more than ever, is a key priority for the region and specifically the GCC.

We at Honeywell UOP have continued to develop and commercialize new technologies, products, services and ultimately solutions to enable our customers and partners to meet these changes in the market. For example, our new slurry hydrocracking technology Uniflex TM enables operators to convert ~90% of the bottom of the barrel to higher value transportation fuels to meet their domestic and export needs which is a revolutionary change that meets the changes that our industry is witnessing.

At the end of the day, changes in this industry are constant and what we as Honeywell UOP have always done is to stay ahead of the game by anticipating these changes and innovating solutions through rigorous R&D and continuous improvements to meet the needs of our customers in order to make them more successful and competitive in this ever changing market.

How important is sustainability when we talk about innovation?

Sustainability is extremely crucial when it comes to innovation. It is only through senior management commitment, optimal work processes, effective project management and ultimately the people that make innovation sustainable. From an environment perspective, innovation has been a key pillar in driving Green technologies. At Honeywell UOP, we have been successful in launching commercially Honeywell Green Fuels technologies both Jet and Diesel to meet the ever changing industry needs that exist in and out of this region.

This is enabled through Honeywell UOP proprietary Ecofining TM process, that meets or exceeds the most rigorous jet and diesel performance standards, and can be produced from a variety of sustainable feedstocks . We also have several new product introductions to be launched in the near future that will further advance the industry landscape and we hope to continue to cooperate with GCC operators and strategic partners to achieve these goals.

What are some of the key differences between innovation and R&D and why is it important to differentiate between the two?

Innovation is a process to develop and commercialize new technologies. Innovation takes invention and knowledge, and transforms them into a final profitable product that we sell or licence to customers. On the other hand, R&D is the department where research, invention, and development take place. In the R&D department, new hypotheses are tested and new ideas are explored. If the concept is proved to be valid, and the business case is acceptable, then the knowledge gained from this research work becomes input to the innovation process.

Majority of the innovation activities take place within the boundaries of the R&D department. Also, Innovation is not limited to technology and materials. Innovation can also occur in methods, procedures and business models. There are three main types of innovation: Market creating (disruptive and new to market product), sustaining (improve existing), and efficiency driven innovation (productivity – do more with less).

How is this region’s refining/ petrochemical sector faring in terms of investment in innovation?

The region has made significant strides in building its innovation capabilities and that work continues. The good news is that there is still room to grow when compared to other developed markets, but the key advantage here is that companies like Honeywell are now much closer to the customers in terms of resources and R&D capabilities.

Today we have significant presence all over the region with our regional HQ in the UAE as well as having significant presence in the Kingdom with our offices in Dhahran Techno-valley including an R&D lab to support the Kingdom’s initiatives in both gas processing and refining / petrochemicals as well as training capabilities focused on supporting the country’s national resources. We also have a fully equipped lab at KFUPM as well as a collaboration agreement through which we are working on an innovative technology in petrochemicals. We also have presence, activities and footprint in Qatar, Kuwait, Abu Dhabi and Iraq. We now address regional problems with regional solutions.

In your observations, what are some of the gaps in the industry’s understanding when it comes to research and innovation?

Global petrochemicals demand is growing faster than gasoline, and at 1-2 times the percentage rate of world GDP. Tons of excess naphtha are on the same magnitude as the benzene and para-xylene consumption combined, so the amount of excess naphtha is significant for the petrochemical industry. For example, pX demand is growing approximately twice that of GDP. As mentioned earlier, the Middle East is in a position of strength, not only with significant quality naphtha in excess available from within the region but also surplus LPG which is another key resource to drive on-purpose olefins production

The region has made progress in the area of refining and petrochemicals integration but there is still significant room to grow. Innovation and technology are key factors in effectively enabling this integration.
The GCC is rich in naphtha and LPG resources that are important feedstock that enable the integration of refining and petrochemical assets. This integration enables refiners to produce olefins and aromatics which are key to the growth in petrochemical which generates higher value. Today, Honeywell UOP has several offerings in this space including our MaxeneTM technology which enables increased ethylene yield +30% along with the ability to produce gasoline which is a key need given regional shortages. All of these technologies come with revolutionary catalysts, adsorbents and specialty products that achieve optimal yields even in today’s challenging market environment. Also, Honeywell UOP propane de-hydrogenation proprietary technology Oleflex TM which comes along with its respective suite of catalysts, equipment and services, enables several operators in the region effectively convert propane to propylene to capitalize on this growing petrochemical that is needed in our everyday lives in things like packaging, textiles, plastic parts and even automotive components

Is there anything else that you would like to add?

If research and development are the engine of innovation, market demand is the fuel. We never forget that inventions serve no purpose if they don’t meet a present or emerging customer and social need. Remember that invention converts money to knowledge only, while innovation converts knowledge into money. Also need to emphasize that innovation is a business driven process with input from Research, and its output is tailored to market and customer requirements.

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