Rafael Moreno Lahore, Partner and Associate Director, O&G Downstream, Boston Consulting Group moderated an impressive lineup of panellists during our second edition of ESF Europe: Energy and Sustainability Forum, held last March in Berlin: Nicolas Aimard, VP Process, TotalEnergies OneTech, Mike Wailes, Manager, European Strategy, Phillips 66, Miguel Ángel García Carreño, Senior Manager Process Design, Repsol Technology Lab and Duncan Mitchell, Global Decarbonization Business Leader, KBC (A Yokogawa Company).
The discussion kicked off discussing the perhaps counterintuitive, industrial clustering and partnerships. Historically perceived to be competitors in the same space, today the challenge to society is so huge that we must pull all ecosystems together to collaborate and cluster!
The need for industrial clustering and partnerships is somehow counter intuitive
The need for industrial clustering and partnerships is somehow counter intuitive: if we had thought 15-20 years ago that ‘traditional competitors’ were aligned to provide a solution, it would be impossible. Despite being perceived as competitors in the same space, the challenge from society is so huge that we need to move towards this clustering and collaboration.
Phillips 66 shared their experiences of the industrial clusters in the UK with the Humber refinery. The UK government woke up a few years ago to the concept of industrial clusters. Today there are 6-7 around the UK, ranging from two million tonnes to the Humber which has the highest at 40 million tonnes of industrial emissions, within a very small radius. The cluster shares the infrastructure, the commonality, the hydrogen, the carbon capture, and ultimately creates the alignment between the industries and companies in the region.
Creating momentum requires common purpose, which can be difficult with a mix of industries and companies. As such government engagement is critical in helping to find those strategic partners with the same alignment.
Refineries are the natural core of an industrial cluster. Hydrogen is something refineries do today. Anyone who works in a refining uses amine every day so there is a lot of commonalities that puts a refinery at the heart of the cluster, in turn creating a lot of opportunities for that refinery.
Government engagement is critical in helping to find those strategic partners with the same alignment
It was stressed that before looking at collaboration, each company has to define their own strategic approach. Whether driven by economical drivers or society, at the end of the day each company has to make its own choice, which very often is a combination of both.
The conversation moved onto, what’s a cluster? Is it two refineries that share a battery line, is it a steel plant, is it a cement plant? How far apart those individual plants need to be to make it a cluster?
One of the great things about the downstream industry is its competitiveness. Over the last 100 years, it has continued to design efficient systems to make itself competitive and act independent to the service of consumers. Collaboration has allowed for some fascinating discussions such as, how far does collaboration go? And to what point does that collaboration start negatively impacting behaviours and decision making? One of the most exciting things when we talk about clusters is what happens if one refinery or two refineries were to optimise themselves individually, and then collectively. The decarbonisation impact is huge.
Ultimately the idea of industrial clustering is relatively new. Despite historically having industrial sites, this level has never been seen before in our industry. We must foster technology to grow these partnerships. It is complex but very exciting and a great time to be in the industry.