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Petrochemistry and oil refining

Schneider Electric: Advanced Solutions for Kazakhstan❜s Oil Refining and Gas Processing

Yevgeniy Gritsenko, Director of Key Market Segments in Kazakhstan and Central Asia, Schneider Electric, answers questions from Petroleum.

– Recently, Kazakhstan's oil refining and gas processing have gained significant momentum. What products and solutions does Schneider Electric offer for this sector?

– Schneider Electric is undoubtedly a leader in power distribution and industrial automation solutions for oil and gas processing. I should note that we have implemented and are currently implementing many projects worldwide. These are not just product deliveries, like switches, controllers, and other components, but comprehensive solutions, including digital ones.

In oil and gas processing, Schneider Electric focuses on projects involving the digitalization and electrification of processes to make enterprises as energy-efficient and process-efficient as possible.

– Several gas processing projects, such as the Gas Separation Complex at Tengiz, the Polyethylene Project, and the Butadiene Project, will soon commence in the country. Is Schneider Electric involved in these projects?

– Yes, we are involved in the Gas Separation Complex and the polyethylene production plant projects. We already have experience collaborating with the stakeholders of these projects, where we have implemented comprehensive industrial automation and power distribution solutions. I am confident in the success of these projects and, most importantly, in the efficiency of their technological processes due to the integration of the best solutions in the industry.

– What other oil and gas projects are you participating in within Kazakhstan?

– The oil and gas market in Kazakhstan, as is no secret, is divided among four main players. These are KazMunayGas, Tengizchevroil, the Karachaganak gas condensate field operator, and NCOC, the operator of the Kashagan field. We successfully work with all these enterprises. For example, we are deeply involved in all major KazMunayGas projects, primarily in refining – referring to the Pavlodar Petrochemical Plant, Atyrau Refinery, and Shymkent Refinery.

Schneider Electric participates in all these facilities to varying degrees. Sometimes, we provide equipment or solutions for the overall plant operations, and sometimes, we integrate digital solutions for technological processes. The ultimate goal is to maximize the efficiency of these enterprises.

If we go back to gas processing, we mentioned only the most prominent projects, such as the polyethylene production plant. However, there are other significant projects, such as urea production. For instance, the KazAzot enterprise in the Mangistau region plans to build a new ammonia-urea plant using gas from western fields, a new direction for fertilizers in Kazakhstan.

There are indeed many such projects, both large and small, which is encouraging. It is encouraging that we are mentally and practically beginning to move from raw material sales to processing, specifically to selling high-value-added products. All these industrial plants must be built in line with ESG policies, making them as clean and efficient as possible and producing products in demand worldwide. We are delighted to participate in these processes.

– When did the company enter the Kazakhstani market?

– Schneider Electric officially entered the Kazakhstani market in 1997 by opening a representative office of the parent French corporation. In 2004, the legal entity Schneider Electric LLP was established with 100% participation of the parent corporation.

– How was the Kazakhstani market conquered?

– Step by step. It all started with projects involving the representative office, such as projects for the National Bank of the Republic of Kazakhstan. There was extensive infrastructure construction, for which we supplied engineering equipment and uninterruptible power systems.

At that time, there were Karmet, Tengiz, and many small enterprises. In reality, we see many Schneider Electric products and solutions in power distribution at many enterprises built or modernized in the late 90s and early 2000s. In my opinion, this was because there were not many local players with new and high-tech solutions in this market then, and Schneider Electric had the opportunity to enter various projects, including with the support of financing, in terms of equipment supply.

The solutions were highly technological then, and such products were not yet produced in Kazakhstan. An undeniable fact is that our equipment was and is of the highest quality and reliability – even after 20-30 years of operation, it works perfectly.

– What do you consider the company's main competitive advantage?

– The main advantage is the quality of our products and technological solutions. Working with a long-term strategic perspective, Schneider Electric is increasingly investing in digitalization, thus providing products in the energy or industrial automation sectors and solutions designed for connectivity and the ability to transfer complete information to any existing digital and automated monitoring, control, and analytics systems.

Regardless of where our product is connected—whether in monitoring, control, or analytical systems—we strive to ensure that it transmits all the information, allowing the end user to monitor its electrical parameters and physical condition during operation.

Thus, we move from simple equipment supply to products that perform their functions and provide comprehensive information about their condition, thereby minimizing operational costs. Our portfolio is vast, and we are continually digitizing our products.

– What forms does your after-sales service take?

– First and foremost, I want to emphasize that service support for any product is one of the key priorities within the corporation. Since the early 2000s, Schneider Electric has increasingly invested resources in developing this area to ensure that any solution or product is supported from launch to the end of its lifecycle, including natural modernization and disposal.

Kazakhstan's Schneider Electric service department is the largest unit, employing many service engineers across various disciplines and administrative personnel supporting field service engineers.

We have a large repair center, a commercial team communicating with clients, and a team handling digital service offerings. Therefore, I can unequivocally confirm that Schneider Electric’s service support is a competitive advantage that we continually work to improve.

– How do you build relationships with partners? Is your partner network expanding?

– Schneider Electric is a large international corporation with many plants and over 150,000 employees. However, our internal slogan states that we are the most local of all global companies.

This means we adapt all our rules and technologies to the local market as much as possible. Evidence of this includes several local manufacturing partners with whom we have licensing agreements.

In addition, we have numerous partner channels, including distribution, system integrators, and general contractors who manage large projects, each with its own goals and objectives.

– Today, energy saving and artificial intelligence are integral to market competitiveness. What solutions and projects do you have in these areas?

– Energy efficiency and artificial intelligence are mega-trends.

We believe that AI will become more significant than the World Wide Web. Over the past 12 months, there has been an explosive growth of large language models like ChatGPT. Within two months of launching this technology, it had 100 mln users. When the World Wide Web was launched, it took seven years to attract 100 mln users. This illustrates the speed and explosive growth of AI. We know that we and our clients have many opportunities to utilize this technology.

Any solutions we offer are not just products but tools to achieve maximum energy efficiency. We work closely with the Institute for Energy Efficiency Development, a subsidiary of the Ministry of Industry and Construction of the Republic of Kazakhstan.

The Institute is developing a special tool for integration into industrial facilities, and we are collaborating on this work. Efficiency starts with understanding where inefficiencies lie. Once diagnosed, steps can be taken to eliminate these inefficient processes. We assist in developing these steps, sharing global best practices to ensure our projects and enterprises are as efficient as possible.

– Energy efficiency is a component of ESG strategy. Do you implement ESG principles in your company?

– In 2021, Schneider Electric was recognized by Corporate Knights at the World Economic Forum as the most sustainable company globally across all industries.

Our transformation program aims to drive and measure the company's progress in achieving global sustainability goals for 2021-2025, supporting six long-term commitments covering all aspects of environmental, social, and governance (ESG).

Firstly, all our product packaging is made from recycled materials. Secondly, many electrified processes now have minimal or zero carbon emissions. Furthermore, Schneider Electric has already committed to achieving zero carbon footprint at all its facilities by 2032.

If we consider the entire cycle, from production to delivery, where we must control our logistics chain and sales partners, it is more challenging, but we are making progress there too. For example, our office in Astana uses green energy from solar panels on the building's roof. I would even say that the sun provides the lion's share of electricity for our office lighting.

Our office building in Grenoble, southern France, is fully built with a zero carbon footprint, as confirmed by a corresponding certificate. These are just some examples.

Schneider Electric's SSI score in the first quarter of 2024 reached 6.43 out of 10 (on track to an annual target of 7.40 out of 10), an encouraging start to the year, coinciding with the launch of the updated employee value campaign "IMPACT starts with us" and the implementation of new solutions in energy efficiency, automation, and decarbonization.

– Has the changed geopolitical situation in the world over the past two years affected the role and significance of Schneider Electric's office in Kazakhstan?

– Undoubtedly. No person or organization has remained unaffected. The most significant change is that Schneider Electric has left Russia and exited its assets in the Russian Federation.

We have transitioned to other logistics centers for product supply, leveraging our many factories. Previously, we sourced some products from France; now, we receive them from Turkey, Singapore, or China plants. Essentially, we have revamped all our logistics approaches and our matrix of factories to support our Kazakh partners and the entire Central Asian market.

– Are there plans to build plants in Kazakhstan?

– We would be happy to build here, but it is purely a commercial issue: no plant is built solely for one country. It is always constructed in a region as a hub, from where it is convenient and profitable in terms of logistics, commerce, volumes, and market openness to distribute products, not just within the country but predominantly beyond.

To start producing a product in Kazakhstan, it must be possible to export it easily across the entire region. Probably for this reason, we work more with partners on a licensing system, transferring technologies, and producing Schneider Electric products at these partners' manufacturing facilities exclusively for the Kazakhstani market's geography and volumes.

– Did the Moscow office coordinate operations in the CIS or only in Russia, Kazakhstan, and Central Asia?

– It was the main office of the territorial unit of Schneider Electric, supporting countries like Russia, Kazakhstan, Kyrgyzstan, Uzbekistan, Armenia, and Belarus.

Currently, the Kazakhstani office is, in a sense, the managing hub for all Central Asian states and the Caucasus. We call such centers Proximity Hubs. Our hub currently includes seven countries: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Georgia, and Azerbaijan. The region is somewhat mentally similar, and the residents of these countries understand each other well.

– Are there projects in Kazakhstan where you have used unique technologies and products with no analogs worldwide?

– There are projects where we have supplied comprehensive solutions – stations integrated into a large monitoring system with analytics, complex control, and digitalization. Some are already operational and working efficiently; others are in the implementation process. We are proud of these projects, and I am confident that upcoming projects, especially in gas processing and oil refining, will be in our portfolio.

The world is changing. Five years ago, no one thought about decarbonization processes and integrating digital solutions, but now it's on the agenda everywhere. And we, like no one else, understand how to address these agenda issues.