Chemical plant engineering: a new landscape

Industry analyses and data from the IEA and Cefic indicate that the majority of new petrochemical investments are being directed towards Asia and the Middle East, with Europe accounting for only a small percentage. At the same time, the focus of projects is shifting. LNG plants are being planned with CO₂ capture; refineries are being expanded into integrated petrochemical complexes; and hydrogen and recycling plants are being scaled up. Engineering processes are also being digitised. Thus, chemical plant engineering remains a key sector in industrial transformation, albeit one that is proceeding in a far more pragmatic manner than many net-zero roadmaps from 2020 and 2021 might have suggested.

The plant engineering association VDMA sums it up: "The transition to climate-neutral technologies is proceeding more slowly than expected."

A glance at the global CAPEX map reveals the extent of this change: the Asia-Pacific region now accounts for nearly two-thirds of petrochemical investments, while the Middle East accounts for around a quarter. China continues to build integrated complex sites, while India is evolving from a future market into a strategic counterweight in the global chemical supply chain. North America accounts for around ten per cent, driven by ethane from shale gas, reindustrialisation, and demand from the semiconductor and AI infrastructure sectors. Europe stands at around five per cent, losing traditional chemical capacity faster than new capacity is being built.

Prominent examples of these developments include BASF’s new integrated site in Zhanjiang, southern China, which has received investment of nearly €9 billion, and INEOS Project ONE in Antwerp, Belgium. The latter project aims to show that significant investment in Europe is possible despite major challenges: around €4 billion is being invested in a modular ethane steam cracker with the lowest possible carbon footprint, achieved through ultra-low-NOx burners, hydrogen firing, CCS options and preparations for future electrification. Nevertheless, INEOS founder and CEO Jim Ratcliffe has expressed concerns about the unsustainable conditions facing the European chemicals industry, citing site closures, lost capacity, and mounting energy and CO₂ costs. Project ONE therefore seems to be more proof of just how difficult it is to realise new, large-scale basic chemicals projects in Europe. The conditions for the new BASF site in Zhanjiang are also currently unfavourable: in the short term, the plant will face a Chinese market characterised by overcapacity and margin pressure, indicating that Europe’s problems cannot be solved simply by relocating to Asia and that location and technology risks are higher there too.

Conflicts and tensions in the Middle East further complicate the shifting CAPEX landscape. This makes it clear that physical security, redundancy, and the insurability of plants are once again key criteria for location and project decisions.

For chemical plant engineering, this means that, alongside the expansion of raw material sites, resilience and the hardening of critical infrastructure are gaining in importance, as are concepts for rapid restart capability and the targeted review of supply chains for critical components such as special alloys, compressors and process valves. The availability of these components is increasingly dependent on geopolitical factors.

What appears to be a regional imbalance on the face of it follows a strict economic logic: new large-scale facilities are built where energy and raw materials will be available in the long term. Qatar Energy is therefore increasing its LNG export capacity from 77 to 142 million tonnes per annum. The North Field West project, which comprises two LNG megatrains, each with a capacity of eight million tonnes per annum, was awarded to a consortium led by Technip Energies. Remarkable not only for its scale, the design incorporates carbon capture and storage (CCS) on a scale of millions of tonnes. Here, CCS is not a climate commitment, but rather a business model requirement. LNG with a lower carbon footprint commands higher prices and strengthens market position in an environment where security of supply and carbon footprint are equally important. For plant engineering, this sends a clear signal that carbon management is moving from the backdrop of production into the specifications of mega-projects.

A similar trend is evident in Saudi Arabia. The Amiral complex in Jubail, which has received around $11 billion in investment, demonstrates how Saudi Aramco and TotalEnergies are systematically expanding the creation of value in the petrochemical sector. This project, like the expansion of the Fadhili gas complex, forms part of a long-term strategy whereby crude oil and natural gas will be refined into chemical products for domestic use as well as being exported.

India is the second major growth story. Its economy is growing faster than that of most other G20 countries, and domestic demand for plastics, fertilisers, and speciality chemicals is rising rapidly. At the same time, the country is massively benefiting from the global 'China-plus-one' strategy: international corporations are actively seeking opportunities to diversify their supply chains and reduce their geopolitical dependence on China, while still accessing the Asian growth market. Government support programmes, competitive labour costs, and a clear political will to establish India as a global counterweight will make the country one of the most important markets for chemical plant engineering in the coming years. The Indian chemical industry is currently worth around $220 billion, and is expected to exceed $1 trillion in the long term.

North America follows a different logic. Shale gas remains a locational advantage, but the new impetus comes from reindustrialisation, semiconductors and artificial intelligence (AI). Data centres require electricity, cooling and grid infrastructure on a scale that is triggering new power plant and utility projects. Semiconductor factories require ultra-pure gases, solvents and chemicals. For plant engineers, this results in contracts that, while perhaps less spectacular than an LNG megatrain, are technologically sophisticated and politically secure.