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US petrochemical industry forced to rethink investment decisions amid COVID-19 pandemic, says GlobalData

The COVID-19 outbreak and crude oil price crash have pushed petrochemical companies in the US to announce project delays. With major complexes such as Shell Beaver County Complex and Formosa St. James Parish Complex having already been affected, prevailing uncertainties and economic slowdown due to the outbreak could push companies to make more such announcements over the short-term, says GlobalData, a leading data and analytics company.

2017 04 20 114457John Paul Somavarapu, oil and gas analyst at GlobalData, comments: “Most of the upcoming projects that have been affected are concentrated in US gulf coast states such as Texas and Louisiana and primarily involve shale gas processing. A few of the delayed projects include the Corpus Christi Polymers Project, which was scheduled for Q4 2020 and has been postponed to Q4 2021, and the Formosa Plastics Point Comfort Polyethylene project, which set to come on-stream in Q1 2020 has been delayed to Q3 2020. The industry foresees more such delays, which would have a knock-on effect to impact the progress and start-up of subsequent projects.”

The pandemic has compelled US petrochemical companies to re-evaluate their investment strategies, impacting their FID plans. Projects under early phases of development are expected to be hit hard. The FID of the PTTGC Belmont County project has been postponed indefinitely due to the outbreak, while CP Chem has also deferred the FID plans of its Gulf Coast Complex.

John Paul concludes: “Petrochemical demand has been knocked down, as the end markets such as automotive, housing and construction have also experienced a decline in demand. However, some end markets such as consumer and food and medicinal packaging have maintained steady demand and avoided similar drops. Demand of key polymers in the US is expected to decrease by around 4% in 2020, and later rebound in 2021.”

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, technology, energy, financial and professional services sectors.

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MENA LNG companies likely to put off upcoming projects due to economic slowdown, says GlobalData

Reduced demand due to economic slowdown in the Middle East and Africa (MENA) region, fueled by the COVID-19 outbreak, has led to long-term liquefied natural gas (LNG) supply contract cancellations and cargo deferments by importing countries. This has resulted in low liquefaction capacity utilization. The cascading impact of global LNG supply overhang coupled with reduced demand may lead companies to withhold or delay their capital spends  on upcoming multi-billion-dollar gas projects, says GlobalData, a leading data and analytics company.

Haseeb Ahmed, Oil and Gas analyst at Global Data, comments: “Amid weakening demand and falling oil and gas prices, capex spends on LNG projects in the MENA region are likely to be deferred during the period 2020-2025. This is likely to cause  delayed commencement of operations of capital intensive projects in the region. Although the duration of these disruptions is uncertain, the capex guidance would likely remain undeterred in the longer term to meet future LNG demand.”

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The bidding process of Qatar Petroleum’s Ras Laffan–North Field Expansion project was hampered, leading to the delay in start year by a few months. The financial investment decision (FID) of the project, which was expected to be in 2020, is also likely to be pushed to 2021. Similarly, the start of the Rovuma LNG project, operated by Mozambique Rovuma Venture SpA, is likely to be delayed by a year, as the current crisis has deferred its FID by a year.

Even active terminals are being confronted with challenges induced by COVID-19. The Egyptian LNG terminal has suspended its work till mid-July 2020 given the current market conditions, while the deal among its shareholders - ENI, Naturgy (Union Fenosa’s owners), the Egyptian government, and EGAS, to revive Damietta LNG terminal, fell through.

Ahmed concludes: “While the depressed financial market can prove challenging for LNG companies to find new investors to fund their projects, LNG buyers and suppliers would contemplate strategy revisions to remain competitive in the mid-term. Possible economic recovery coupled with favorable gas policies in the long-term can drive natural gas demand growth in the region; Integrated gas projects, already announced, will be developed.”

  • Comments provided by Haseeb Ahmed, Oil and Gas analyst at GlobalData
  • ­This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, technology, energy, financial and professional services sectors.

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Wärtsilä to deliver advanced emissions abatement technology for two new shuttle tankers

The technology group Wärtsilä’s emissions abatement technology is again recognised with a new order. The company will provide its Volatile Organic Compounds (VOC) Recovery System, together with an LNG Fuel Gas Supply System, for two new 124,000 DWT shuttle tankers. The ships have been ordered by Knutsen NYK Offshore Tankers (KNOT), a leading independent owner and operator of shuttle tankers, and will be built at the Daewoo Shipbuilding & Marine yard in Korea. The order with Wärtsilä was placed in April. 

With this technology, the liquefied VOC is mixed with LNG and used as fuel for the main and auxiliary engines. By using LNG as the primary fuel and supplementing this with the energy recovered from the VOC, these vessels will be able to lower their emissions of CO2 equivalents by 30 to 35 percent, a minimum of 30,000 tons per year, compared to conventional oil-fuelled shuttle tankers. These savings are roughly the equivalent of the total emissions from approximately 20,000 cars. 

The two new shuttle tankers for the KNOT Group will feature Wärtsilä’s unique technology combining VOC recovery with an LNG fuel gas supply system.The two new shuttle tankers for the KNOT Group will feature Wärtsilä’s unique technology combining VOC recovery with an LNG fuel gas supply system.

“Wärtsilä has developed its VOC abatement technology over the past 20 years, and our competence in this field is unmatched in the marine sector. It means that for these vessels, with the combination of Wärtsilä’s VOC Recovery and LNG fuel systems, they will not only be extremely sustainable environmentally, but will also be commercially attractive. The VOCs that would otherwise be emitted to the atmosphere can instead be burned as fuel,” says Hans Jakob Buvarp, General Manager, Sales, Wärtsilä Marine.

“Our industry is rapidly changing towards greater environmental awareness and improved operational efficiency. These two new ships will reflect this change, thanks largely to Wärtsilä’s advanced technology. They will truly represent the new generation of shuttle tankers, with vastly reduced emissions and lower fuel costs,” says Jarle Østenstad, New Building Director, Knutsen OAS.

The Wärtsilä solutions will be delivered to the yard commencing in November of this year. When delivered, the tankers will operate in the North Sea oil fields.

Wärtsilä in brief:
Wärtsilä is a global leader in smart technologies and complete lifecycle solutions for the marine and energy markets. By emphasising sustainable innovation, total efficiency and data analytics, Wärtsilä maximises the environmental and economic performance of the vessels and power plants of its customers. In 2019, Wärtsilä’s net sales totalled EUR 5.2 billion with approximately 19,000 employees. The company has operations in over 200 locations in more than 80 countries around the world. Wärtsilä is listed on Nasdaq Helsinki.
www.wartsila.com

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Forum Energy Technologies appoints Chinese partner to support Asian growth strategy

Forum Energy Technologies has announced that Wuxi Haiying-Cal Tec Marine Technology Co., Ltd will represent Forum for the sale of the company’s extensive range of remotely operated vehicles (ROVs) in China, including its recently launched XLe Spirit electric ROV.

the XLe Spirit ROV is the first in a new generation of electric ROVsthe XLe Spirit ROV is the first in a new generation of electric ROVs

The vehicle, which recently completed successful sea trial in Norway, is the first of a new generation of electric observation class ROVs. It is the smallest in the new range, and powerful enough perform subsea maintenance and repair work.

Kevin Taylor, Vice President -- Subsea Vehicles at Forum Energy Technologies, said: “We continue to see strong demand for our products in China and the wider Asian market, and recognised the need for a local partner to support our long-term growth strategy.

“It’s important that we work with the best and most well-respected partners in country and Wuxi Haiying-Cal Tec Marine Technology Co., Ltd provides us with another strong channel to complement to our existing framework across the academic, survey and energy markets.

Representatives from Wuxi Haiying-Cal Tec Marine Technology Co., Ltd visiting Forum Energy in 2019Representatives from Wuxi Haiying-Cal Tec Marine Technology Co., Ltd visiting Forum Energy in 2019

“This agreement ensures that our clients in China receive the same streamlined and consistent support they are accustomed to around the globe. We look forward to engaging with new and existing companies through this partnership to grow our foothold in China and deliver our world-class range of reliable ROVs.”

Forum Energy Technologies, Inc. is a global oilfield products company, serving the subsea, drilling, completion and, production sectors of the oil and natural gas industry. The Company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe.

For more information, please visit www.f-e-t.com

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Connector Subsea Solutions announces acquisition of Isotek Oil & Gas Ltd

Connector Subsea Solutions (CSS) Bergen, Norway has announced (8 June 2020), that is has completed the acquisition of Isotek Oil and Gas Limited.

The acquisition adds Isotek’s remote welding technology to CSS’s existing range of subsea pipeline repair capabilities which are primarily focused on mechanical clamp and connector pipe joining solutions.

The deal strengthens CSS’s position as a complete solutions provider for critical offshore connections and is part of a strategic drive to meet growing industry demand for technologies which offer lighter, smaller and more reliable pipeline repair methodologies for complex subsea and remote intervention. Remote subsea welding is seen as a key link into future operational scenarios for tie-ins, repair, hot-tapping, Emergency Pipelines Repair Systems, and in particular, larger diameter pipeline applications.

Full Remote Welding SpreadFull Remote Welding Spread

The Isotek workforce which numbers 15 people is transferring over to CSS with immediate effect.

CSS and Isotek have a long-standing relationship and have been at the forefront of subsea and deep water pipeline repair for many years.

Isotek, in partnership with CSS, has been a key supplier and development partner for Equinor’s Pipeline Repair System since its inception in the early 1990s. This collaboration developed control systems and equipment for the subsea repair and installation spread, and fully remote welding equipment for hot tapping.  A number of tie-ins have also been completed, along with the development and qualification with DNV-GL. In 2019 the partnership celebrated the first fully remote hyperbaric welded tie-in which was successfully completed on a 36” pipeline for the Johan Sverdrup field in Norway using equipment and technology developed and supplied by Isotek.

Isotek has also been involved in the control and automation of subsea equipment since the mid-1980s and developed key parts of the hyperbaric mechanised TIG (Tungsten Inert Gas) welding system which was first used on the Oseberg field tie-in in Norway in 1988.

More recently, Isotek has been developing small payload high voltage converters particularly suitable for the ROV and subsea drone market. This work has been fast-tracked and is in the final phase of completion on the back of projects with various ROV companies and is due to be available in Autumn 2020.

Ivar Hanson, Chief Executive Officer, Connector Subsea Solutions commented; “Having led the industry on every major milestone with regards to remote repair using mechanical connectors, CSS now also has a proven capability for remote welding. Adding Isotek’s expertise and experience to our portfolio of services allows us to offer an unrivalled range of capabilities in the repair of shallow and deep water pipelines of up to 48in diameter, in the most challenging operating conditions.”

Simon Fripp, General Manager, Isotek added; “The synergies already in place between the Isotek and CSS teams will create exciting opportunities for us to develop new products and solutions for the oil and gas industry, such as our ROV power converters.  This will give us strong growth potential and allow us to play a key role in supporting the trend towards autonomous subsea operations, as the industry ventures into increasingly challenging environments.”

Connector Subsea Solutions delivers reliable, efficient and commercially competitive solutions for any subsea challenge. CSS are specialists in providing repair and tie-in solutions for pipelines, risers and subsea distribution systems.

In 2019, following six years of successfully collaborating together on deep water pipeline repairs, Connector Subsea Solutions acquired the MORGRIP® connectors products and business.

Headquartered in Norway, and with regional offices in the UK, Bosnia, Brazil and Croatia, CSS employs 60 people. 

www.connectorsubsea.com

Isotek Oil & Gas Limited evolved from Isotek Electronics Ltd, a company founded in 1978. Its main focus is in developing control solutions for harsh environments and in particular subsea pipeline connection employing both welded and mechanical pipeline technologies.

Over its 40-year history, Isotek has supplied services to a broad range of industries including oil and gas, aerospace and space exploration via the Mars Beagle project.

Isotek is based in Leeds, England, and employs 15 people.

www.isotek.co.uk