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A Global Gas Market Is Only Natural

Natural Gas 300x200Never has natural gas been so widely accessible. No, it’s not because Amazon recently added it to its two-day shipping list. Rather, a natural gas excess has prompted more suppliers to expand their reach into the global marketplace, essentially creating new buyers and markets outside of the United States. IBISWorld expects this globalization to persist as natural gas continues to be a cheaper and more environmentally friendly energy source in the transition to a low-carbon economy.

A global natural gas market is a stark contrast to the loosely connected network of regional markets that formerly molded the natural gas procurement process. Natural gas can either be purchased as compressed natural gas (CNG), or undergo additional processing to become liquefied natural gas (LNG). CNG is commonly sold to buyers directly through pipelines, with the surplus supply stored underground for later use. LNG, on the other hand, is cooled and sold to buyers in insulated tanks & cylinders. Historically, LNG has had a very limited downstream market because transporting it is expensive and formerly required long-term contracts to be economical. Consequently, many buyers opted to tie in directly to a pipeline, for which they usually had to bear the cost. The market’s overall difficulty and risk prompted many businesses to forgo natural gas entirely and turn to other energy sources.

However, much has changed in recent years. Throughout the United States, increased production through fracking has created an oversupply of natural gas. Higher domestic production, in combination with new natural gas reserve discoveries in Tanzania, Australia and Qatar, has presented suppliers with a unique problem: to avoid cutting production, they need to find ways to get their supply to new buyers. In response, suppliers have begun investing billions of dollars in capital projects to increase the cost-effectiveness of procuring natural gas. Suppliers’ rationale is that by making investments now, they’ll be rewarded with new buyers in new markets, allowing them to keep production at high levels.

In the past year alone, 20 tanker ships have been added to the overall global fleet, meaning 170 LNG tankers are now cruising the globe. Meanwhile, along the Gulf Coast in Texas, major player Cheniere Energy has converted multiple import terminals into export terminals to begin shipping product out of the United States. In fact, if current trends from the US Energy Information Administration continue, the United States will be a net exporter of natural gas within the next few years. The company has also spent considerable financial resources to create plants that can cool CNG to turn it into LNG, which can then be shipped by tanker. Similarly, Total and Royal Dutch Shell have been targeting newly discovered reserves in East Africa by providing capital assistance to fund other infrastructure projects meant to open the market to buyers in economic centers elsewhere on the continent. Floating terminals have also appeared, which are mobile plants positioned in offshore locations that can be easily relocated if needed. These and other investments have so far paid off, with the number of countries importing natural gas increasing within the past year.

Global Market Has a Wide-Reaching Impact on US Buyers

Natural Gas Benchmark Price Graph 1 300x300Buyers are likely to benefit from the global natural gas market. Typically, when demand increases, so do prices. However, because supply has also increased, IBISWorld does not expect these market changes to have an impact on the benchmark price of natural gas in the United States, which has been falling at an estimated annualized rate of 10.1% in the three years to 2017. Increased competition among suppliers, though, will have an impact. Suppliers are now in more direct competition with one another because their reach in the market is expanding and supply contracts have become shorter. These factors increase price-based competition. IBISWorld also anticipates that a buyer’s location will become less of a pricing factor due to the presence of more tankers that can ship globally. As such, IBISWorld expects the price range for natural gas to narrow because suppliers will not have as much of a hold on specific geographic areas. Furthermore, the increased distribution scope will benefit buyers with international operations, because a single supplier can meet all of their needs. Additionally, globalization will mitigate supply chain risk. With more suppliers competing globally, buyers will have more workarounds when it comes to dealing with inclement weather or geopolitical issues.

Putting Pressure on Other Markets

The changes in the natural gas market will put pressure on other related markets. Natural gas is a cleaner-burning, cheap alternative energy source compared to other energy sources. Thus, these changes will have the most effect on petroleum gas markets. For example, IBISWorld expects demand for propane, which is derived from crude oil, to decrease. The full impact will be slow, however, because buyers will need to alter their facilities to accommodate the use of natural gas. Still, as prices for natural gas remain low, more buyers will convert their facilities to burn natural gas.

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Multiple Orders For Rotork Actuators At Grassroots Middle East Refinery

Rotork fluid power valve actuators have been ordered for multiple applications at a new grassroots refinery under construction in the Middle East.

2017 06 20 082057With a capacity of up to 400,000 barrels a day, the refinery will process crude oils to manufacture petrol, ultra-low-sulphur diesel and fuel oil for export and to satisfy local demand.

One significant order involves the supply of 70 LP range linear pneumatic actuators for the operation of large gate valves. The order for these actuators includes the assembly and factory testing of local control panels with digital valve positioners.

Rotork LP actuators are individually sized for each application in double-acting or spring-return configurations. Carbon steel cylinders are electro-less nickel plated to provide minimum friction and maximum protection against corrosion. Careful attention to seal materials on pistons and piston rods further reduces friction and avoids stick-slip effect even after prolonged periods without operation.

In other areas of the site, over 200 Rotork GP and CP range pneumatic actuators are being supplied for the operation of butterfly valves in desalination and wastewater treatment plants. These scotch yoke actuators are designed to provide part-turn movement for isolating or modulating duties. A rugged, compact and efficient modular design is common to both ranges, yielding high torques even at low pressures. The design concepts of the large GP actuators are applied to the CP range, bringing heavy-duty actuator qualities to small, quarter-turn actuators.

These orders also include the assembly and testing of local control panels, in this case including Bifold pneumatic instrumentation and Soldo switchboxes, both Rotork brands. 

For sixty years, engineers have relied upon Rotork for innovative and dependable flow control solutions. Rotork products and services are helping companies in the oil & gas, water & wastewater, power generation, marine, mining, food, pharmaceutical and chemical industries around the world to improve efficiency, assure safety and protect the environment.

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Advanced “splash zone” coatings from Hempel assure longer service life and reduced maintenance for offshore assets

In response to customer demands, Hempel has launched two new advanced coatings specifically developed to protect the vulnerable “splash zone” areas of offshore structures.

The “splash zone” is the area of an offshore asset (oil & gas platform or wind turbine, for example) that is just above the waterline and so suffers from the dual impact of atmospheric and immersion-type corrosion; as well as physical damage such as abrasion and impact, especially in areas around boat landings.

2017 06 15 110031Launched in Europe, Hempadur Multistrength 35480 and 35482 are Hempel’s new coatings that will revolutionise the way the “splash zone” is protected. Unlike conventional coatings, these two products are almost solvent-free and contain a much higher percentage of reactive diluents instead of conventional solvents to create superior cross-linking properties (a chemical reaction that helps harden the coating). This significantly enhances their resistance to corrosion. In addition, the coatings are reinforced with overlapping glass flakes to further enhance their water resistance and strengthen them against physical impact. Their high solids ratio (99 percent) and low VOC (volatile organic compound) content makes them significantly kinder to the environment than conventional coatings.

Thinning a coating often increases the potential for solvent entrapment and can result in poor appearance and sagging. To avoid this common problem, Hempadur Multistrength is available in two variations – 35480 and 35482 – giving customers a choice of splash zone products that offer identical performance but at different film thicknesses.

Simon Daly, Hempel’s Oil & Gas Segment Manager commented:

“Prolonging the life of an offshore asset and reducing maintenance costs are key requirements for many of our customers. Longer life also results in not having to put maintenance painting personnel in potentially hazardous situations. There are many products that have been developed to protect the splash zone but we are bringing a different technology approach to the market that delivers enhanced protection with minimal environmental impact. Our products are easy to apply and hardness develops quickly during the curing process which allows for quicker handling – this makes them ideally suited to pre-fabricated items.”

Hempadur Multistrength 35480/2 have both been pre-qualified to NORSOK M-501 System 7A and 7B; including extensive testing to ISO 20340: 2009 for a variety of relevant corrosion categories.

Hempel has significant experience in developing protective coatings for the oil & gas and offshore wind industries and is currently refreshing its portfolio and widening its range of products for these important sectors. Hempel is committed to assisting its global customer base to prolong the life of their assets and reduce the need for on-station maintenance through the provision of industry leading and trusted coating solutions.

Hempadur Multistrength 35480/2 at a glance:

  • Two-component, epoxy resin, anti-corrosive coating designed for use in the “splash zone”
  • Overlapping glass flakes improve resistance to water permeation
  • High solids (99%), low VOC make it kinder to the environment
  • Identical performance via different dry film thicknesses
  • Impact and hardness develop quickly during curing allowing quicker handling
  • Improved surface finish – no need to thin
  • Tested to NORSOK M-501 System 7A and 7B

About Hempel
Since 1915 Hempel has been a world-leading coatings specialist, providing protection and inspiration to the world around us. Today we have over 5,500 people in 80 countries delivering trusted solutions in the protective, decorative, marine, container, industrial and yacht markets.

This includes many recognised brands like Crown Paints, Schaepman and Jones-Blair.
Hempel is proudly owned by the Hempel Foundation, which supports cultural, humanitarian and scientific causes across the world.
www.hempel.com

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£1m+ contract win for M² Subsea on world’s longest pipeline

M² Subsea, the global independent provider of ROV services, has secured its first contract award which is valued in excess of one million pounds. The project will see the firm supplying the Go Electra vessel, ROVs and personnel to support survey work on the world’s longest subsea pipeline system.

The company, which has bases in Aberdeen and Houston, has been sub-contracted by Next Geosolutions, an independent geoscience and engineering service provider, to deliver the campaign in the Baltic Sea for the Nord Stream 2 project.

Next Geosolutions was appointed to carry out unexploded ordnance identification (UXO) surveys on the two new pipelines.

The campaign for Nord Stream 2, an extension of the world’s longest pipeline, will be undertaken in an area noted for munitions discoveries following the end of World War II.

2017 05 31 090151

To support the 90-day project on the Nord Stream 2, M² Subsea has signed its first charter agreement for the multipurpose support vessel (MSV) the Go Electra, which recently successfully completed its first five-year class inspection.

The scope of work will be project managed from Aberdeen and will see the MSV deployed from Hanko in Finland, and supported by 15 of M² Subsea’s personnel who will carry out the UXO identification work utilizing a Triton XLX 2 Work Class ROV and a Mohican 5 observation/inspection class ROV from the firm’s fleet of 28 assets.

M² Subsea chief executive officer Mike Arnold said: “This contract award from Next Geosolutions is great for the business and a significant scope of work for us to win. It highlights both our personnel and asset capabilities to negotiate what is a very challenging subsea environment.

“Safety is a key factor on every project and in particular where it involves surveying the seabed to identify undiscovered explosive devices for removal. We are very pleased to have chartered the Go Electra which is a highly specialised vessel for subsea inspection, repair and maintenance work and ideal for supporting the conditions the team and ROVs face in the Baltic.

“To be chosen to deliver this geophysical survey also highlights the industry’s increasing appetite for engaging with companies of all sizes if their focus is on delivering the best value via a well thought out strategy which involves the most experienced people as well as the most well-suited vessel and assets for the job in hand.

“We look forward to delivering a safe and successful project for Next Geosolutions.”

Giovanni Ranieri, Next Geosolutions’ CEO, said: “This is an exciting project for Next Geosolutions and we’re delighted to have the opportunity to work with M² Subsea. The workscope allows us to further cement our position in the geoscience market and it reinforces our key objective – to fully appreciate our clients’ requirements and provide them with high quality solutions.”

The Nord Stream twin offshore pipeline system runs from Russia to Germany and measures 1,244km in length.

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Society of Petroleum Engineers Regional Award made to Heriot-Watt University Oilfield Production Expert

The 2017 North Sea Regional Award for Productions and Operations from the Society of Petroleum Engineers (SPE) is this year awarded to Professor Eric Mackay of Heriot-Watt University’s Institute of Petroleum Engineering (IPE).

Professor Mackay was nominated for his contribution to bringing together the areas of reservoir simulation and oilfield chemistry. As a PI in the Flow Assurance and Scale Team (FAST) at Heriot-Watt he oversaw research into a range of oilfield production chemistry issues such as mineral scale deposition and its prevention. 

2017 05 31 085832He has been examining the detailed differences between the full chemistry of the injected, in situ and produced brines including the brine/rock geochemical interactions, applying innovative methods to Production and Operations in this technology area. 

Karl Ludvig Heskestad, SPE Regional Director North Sea, said, “SPE’s regional awards are designed to recognize those members who have contributed exceptional service and leadership to the society, as well as those who’ve made major professional contributions to their technical disciplines at the regional level.

“Professor Mackay was considered by the Awards committee as an outstanding candidate who has greatly contributed to industry's understanding and appreciation of oilfield chemistry. On behalf of SPE and the Awards Committee I would like to congratulate Mr. Mackay on his contribution in this area at the regional level.”

Professor Eric Mackay, Foundation CMG Chair in Reactive Flow Simulation, said, “I am honoured to receive this award from a Society of my peers. Our research team addresses the challenge of managing production while maintaining safety and meeting our environmental responsibilities, all in the current challenging low-cost environment of North Sea oil production. It is particularly pleasing that this work should be recognized in this way.”

Heriot-Watt’s Chief Scientist, Professor John Underhill said, "The prestigious SPE award to Eric Mackay is well deserved and acknowledges his superb contribution to Flow Assurance and Scale in Subsurface Reservoir Systems. It is also a testament to his commitment to and role in maintaining research excellence that underpins the Institute of Petroleum Engineering's global brand"

Professor Ken Sorbie, Co-PI with Eric in the Flow Assurance and Scale Team (FAST) in IPE,

who nominated Professor Mackay for the Award, said, “I am delighted that Eric Mackay’s work on bringing together the fields of reservoir geochemistry, simulation and oilfield chemistry has been recognised.  His research has highlighted how production problems such as mineral scale formation can be predicted and mitigated.  Eric’s work has been highly regarded by the specialists in his field for some years, but it is very satisfying to see that the Society of Petroleum Engineers have recognised his contribution at this higher industry-wide level.”

The Institute of Petroleum Engineering (IPE at Heriot-Watt University is a leading Centre of Excellence in Petroleum Engineering and Petroleum Geoscience, recognised internationally for the quality of our teaching, training and research.

We offer a range of postgraduate opportunities, all uniquely tailored to the oil and gas industry, in a dynamic, multidisciplinary environment which provides a stimulating place for learning and research.

In 2015 we received a prestigious Queen's Anniversary Prize, recognising its sustained pioneering work in innovation and research excellence, as the Institute celebrated its 40th anniversary. The prize recognises how the Institute’s research and innovation activity spans exploration to production technology, and also harnesses its findings to enhance interdisciplinary work being carried out, including in medical research.

For further informaton on Professor Eric Mackay please visit:

https://www.hw.ac.uk/schools/energy-geoscience-infrastructure-society/staff-directory/ericmackay.htm

The Society of Petroleum Engineers is the largest individual-member organization serving managers, engineers, scientists and other professionals worldwide in the upstream segment of the oil and gas industry.

For further information on the Society please visit: www.spe.org

For information on the Awards please visit: http://www.spe.org/awards/