EPC Oil and Gas Companies' Role in Scaling up in Energy Transition
Matthew Harwood, SVP Strategy and Sustainability, McDermott International [NYSE: MDR]
The transformation of the global energy sector must surely involve oil and gas companies as part of the solution. The new challenges and opportunities of the energy transition are also changing the strategy and operations of EPC companies who have served the O&G sector.
Recently, EPC companies focused on the energy transition are undergoing two main changes: First, EPC companies are actively evaluating our own operations. In other words, how do we design, fabricate and construct with a lower impact on the environment, whether that means reducing waste, greenhouse gas emissions, or in the impact that we have locally on communities?
The second, is how EPC companies can adjust to deliver the technologies of tomorrow. How do we deliver low-carbon technologies at scale, at an acceptable cost, that support the decarbonisation of the facility and the energy industry in the long-term?
There are many ways EPC companies can help to provide solutions and support the scaling up of energy transition offerings. Below are a few ways that we can help to accelerate the energy transition:
• EPC companies will need to work with new and established technology companies to scale up the solutions, a key factor to bring down the cost of clean energy alternatives and new technology
• Leverage existing supply chain networks to access global capabilities and collaborate to meet the demand, quality, and cost efficiency requirements needed to at the scale of projects clients are planning for
• EPC experience in fabricating modules for refinery and LNG facilities can be transferrable to large scale renewable projects. Modularization provides better schedule and cost control, reducing risk of delays, and offers opportunities for sustainable production via clean energy investments and waste management in the fabrication process
• Consider embedded carbon in facilities, including the logistics, materials, and equipment that go into a facility and working in partnership with subcontractors and suppliers to deliver low carbon solutions
We recognise the need for EPC companies traditionally focused on oil and gas to get involved in low carbon solutions, both decarbonizing oil and gas operations and entering or integrating renewable projects. Low carbon energy can provide financial stability and growth opportunities for EPC companies. These projects are increasingly complex with large-scale facilities and innovative technology, where EPCs can play a key role in accelerating scale up and commercialization.
“McDermott aims to support our customers with sustainable solutions to deliver their energy transition goals.”
At McDermott, we are developing a proposition called the “Facilities of the Future,” applying sustainable engineering principles and digital solutions, as well as low carbon construction, fabrication, and supply chain engagement, to our product lines such as LNG, petrochemicals, upstream, and refining. We are also expanding to support renewable energy infrastructure, including offshore wind - both in traditional offshore wind that has reached scale and more emerging floating offshore wind technologies – as well green hydrogen and advanced biofuels.
At McDermott, we are developing a proposition called the “Facilities of the Future,” applying sustainable engineering principles and digital solutions, as well as low carbon construction, fabrication, and supply chain engagement,
We are also engaged in carbon capture, utilization and storage (CCUS) projects to support decarbonization of power and other industries. For example, we are doing a lot of internal work on blue hydrogen and leveraging sour CCUS experience in new industries. Our work with Net Power also offers an innovative approach to generate low carbon power from natural gas – which has zero air emissions and has full CO2 capture.
Other emerging technologies we are exploring include early work in the circular economy, including downstream solutions to the plastics lifecycle, which we have a strategic partnership with the Lummus Green Circle. We are also working to reduce our own waste on EPC projects and identify potential linkages between circular economy solutions and our operations. We are continuing to engage and support our customers with sustainable solutions to deliver their energy transition goals.
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