The region's leading pump specialists provide an upstream perspective
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Pumps represent a mission critical investment for oil producers and field operators. Here, the region’s leading pump specialists provide an upstream perspective
Pumps perform a mission critical role for upstream operators. Despite a setback in worldwide demand, Middle Eastern oil, gas and desalination projects have helped to prop up the global pumps market. According to a global market report by Freedonia, worldwide demand for fluid handling pumps is forecast to increase at a 4.4% annual rate to $47 billion in 2012.
In the Middle East, upstream demand has remained strongest in countries where National Oil Companies have pushed projects through in spite of prevailing economic conditions, namely Saudi Arabia, Qatar and the UAE with growth from Oman helping. From the Oil & Gas Middle East survey of leading pump manufacturers, vendors and suppliers in the region there has been no question that the economic crunch has had an impact on local markets, notably with small to medium sized clients ability to pay having been curtailed somewhat.
However, healthy economic conditions support the view that by 2010 the sector will have seen the bottom of the downturn, and expectations remain high for a positive rebound from third quarter next year, through to sustained growth in 2011.
The twin pillars of the recovery for pumps sector will be rising energy consumption throughout the region, coupled with major infrastructure development projects geared to enable each of the major producers to increase their production capacity. Both prerequisites seem to be in place for local producers to capitalise in the coming months.
The worldwide pump market is expected to be roughly $30 billion next year. Estimates range from roughly $22 billion (ITT), to $29 billion (McIlvaine), to $35 billion (Elsevier). Freedonia estimates the market will grow 4.8% annually through 2010 to reach $36 billion.
GE Oil & Gas
Francesco Falco, pumps, valves and systems business leader for GE Oil & Gas is upbeat about both the potential, and performance of the Middle East upstream outlook, and delighted with recent contract wins.
“The Middle East is one of the key growth regions for our products and services in general, including pumps. Recently we were contracted to supply a centrifugal pump system to Saudi Aramco, to help increase the shipping capacity of the Saudi Aramco refinery in Ras Tanura,” he says. The massive Ras Tanura expansion is designed to help Aramco increase its shipments to the central region of the Kingdom, which is facing a shortage of refined oil and gas products.
GE Oil & Gas provides pumps and valves specifically for oil and gas applications, providing its pump technology with flexible engineering capabilities across a wide variety of upstream and midstream applications including oil pipelines, CO2 pumping for Enhanced Oil Recovery and subsea multiphase pumping.
“Our experience with projects around the world and strong synergies with key sub-vendors has enabled us to build a proven track record when it comes to supplying complete advanced pump technology solutions for some of the world’s largest oil and gas projects,” says Falco.
As enhanced oil recovery techniques increasingly come to the fore in the Middle East, Falco says that the company is well positioned to capitalise on the need for intelligent pumping solutions. Excitingly, GE Oil & Gas is playing a critical role in the development of Brazil’s Tupi field, providing CO2 re-injection pumps for oil recovery. “These pumps can operate at 540 bar pressure: the highest pressure ever reached globally by a liquid CO2 pump. GE is the only company able to combine the technical content and capability to make this CO2 re-injection pump because it can apply to pump technology the engineering required for compressors, which is a critical part of the solution.”
Falco says that reactor charge pumps, process pumps, oil pipeline pumps and high speed pumps have seen the strongest demand this year. Despite a relatively strong outlook, he concedes there are significant challenges for pump providers.
“We do a lot of business with both national and major oil companies including ENI, Saudi Aramco and Shell. We also work a lot with EPCs such as Technip, Chiyoda and Petrofac. Like everyone else involved in these projects, managing increasing pressure on costs as a result of the recession is my major challenge this year.”
Sriram Iyer, regional manager, LEWA pumps and systems says that the emerging trends in the upstream field this year have been a more focused approach in relation to lifetime cost of project. “End users are thinking both in terms of reduction in capital outlay and also lifecycle costs. This means that the customer would like all his equipments to do much more than in the past in terms of efficiency, productivity, ease of operation and of course, safety.
The strongest business line for Lewa this year has been in relation to upstream and midstream gas handling solutions. “Demand for gas has been growing very much in this region, and delivering the pumps and systems required for gas processing is still showing healthy growth.”
Whilst the year has been challenging, Iyer notes that the pumps market is still developing in the Middle East. “Sales are buoyant, and it’s only the growth rate that has taken a dip. While we have had some extraordinary growth in the past, the dip we see developing now keeps expectation under control. The average trend is still towards growth and this will be visible clearly as global demand for energy recovers.”
The Middle Eastern countries dominating Lewa’s revenue stream have unsurprisingly been the most willing to press ahead with capacity building projects. “Currently Saudi Arabia and UAE have some very exciting expansion plans and these countries show the biggest investment in oil and gas related projects.” Iyer adds that is spite of the downturn 2009 will deliver the highest sales for Lewa in region to date.
Calder Limited is a supplier of high and ultra high pressure pumps, which also manufactures high and ultra high pressure pump units and a wide range of water jetting accessories including nozzles, water blasting guns, and process pumps. The company has been steadily growing its global reach in recent years, and as well as Europe and Asia; its equipment is supplied directly or via representatives in UAE, Kuwait, Qatar, Oman, Syria, Yemen, Bahrain, and Iran.
Ian Calder Potts, managing director of Calder Limited, says that as a new entrant into the Middle East market the only way is up, but that enthusiasm is tempered with some economic realism. “In discussions with many of our potential clients there is no doubt that the international downturn in the world markets is also impacting the GCC but probably to a lesser extent. The longer term future for high pressure pumps within the Middle East should be steady, but this is dependent on the oil price and continued investment in new projects.”
With the potentially lucrative business of the oil and gas industry in mind, Calder-Potts says the company is bringing its most cutting edge product portfolio to the Middle East. “As a packager and supplier of very special high pressure and ultra high pressure pumps we are in the unique position of being able to offer a comprehensive range of zero emissions reciprocating plunger pumps in full compliance of API 674 and capable of pressures up to 60 000 PSI with flowrates up to 160M³ an hour. Our range of Hammelmann ‘Zero Emissions’ pumps has the added advantage of the labyrinth sealing system which is unique to our range of high pressure pumps providing significantly extended life resulting in reduced operating costs and a much safer working environment.”
That oil and gas pedigree is standing the company’s business in good stead in the Middle East. “Our range of well service pumps have been the least affected in the current market downturn. Well maintenance must continue as long as oil and gas is required to meet demand, which inevitably results in a strong demand for large 500 kW to 2000 kW diesel engine driven and electric motor driven pumps capable of delivering high flow rates at pressures up to 20 000 PSI.”
Certain key trends are emerging in the regional upstream pumps arena, says Calder-Potts. The decision-makers in the Middle East are increasingly aware of the importance of high quality high pressure pumps which can deliver low life cycle costs on a 25 to 30 your life where as in years gone by purchase decision was all too often made on the net buy price without much consideration for quality and longevity.
Echoing the sentiments of other leading pumps providers, Calder-Potts sees the flight from quality as a major challenge in the coming months. “Persuading end users that ‘cheap-to-buy does not necessarily mean, cheap-to-own’ is a top priority for us right now. The idea that one should always purchase the least expensive product on the market can often prove a disastrous policy and no less so when it comes to high pressure pumps which are particularly sensitive to cost.”
Tech Talk: Pulsafeeder
With the introduction of its newest range of pumps, Pulsafeeder says it has re-invented the hydraulically balanced diaphragm pump design. The new range called Pulsa Pro 900 pumps is specifically developed to handle demanding applications in oil and gas and petrochemicals industries.
“Pulsa Pro 900 pumps incorporate ease and simplicity of start up and maintenance, modularity of design, the best dosing accuracy and the longest warranty in the industry. This new range of pumps is available in Simplex, Duplex and Quadruplex configurations with Triplex configuration to follow by the end of the year,” explains Ashok Rekhi, director, international sales, Pulsafeeder Inc. In Simplex design, in phase one, the pump is capable of pumping 15,570 Liters/Hour and is rated for a pressure of 300 Bars. The phase two will increase the capacity and raise the rated pressure to 1,000 Bars. The four-bolt tie bar design on the PulsaPro 900 pumps resists pipe stresses, holds the check valves rigidly in position and promotes leak free operation.
Bogdan Fatu, business development manager – Triplex Pumps, for Hydrolink, says delivering high and ultra high pressure pumps for tank cleaning, heat exchanger cleaning, surface preparation and pipe cleaning operations has been the mainstay of the company’s oil and gas related business this year. “The pumps market is growing and the demand on special equipment, especially for the upstream companies remains high. We are busy delivering custom build equipments for the local conditions as high ambient temperature and high humidity.”
Fatu says that whilst growth has slowed, 2009 and 2010 will still be years of expansion for Hydrolink. “We are working across the most dynamic markets in the region, but Saudi Arabia and the UAE represent our biggest markets, but we are also seeing strong growth from Qatar.”
Abu Dhabi-headquartered Al Mazroui Engineering Co began life in Abu Dhabi in 1986, providing services to ADMA-OPCO. That relationship continues to this day and has grown to include Takreer, Borouge and GASCO amongst others. EPC contractors and consultants such as Petrofac, Technip and NPCC have become important partners too, according to Drew Steedman, business development manager at Al Mazroui.
“We also represent some of our principals in other GCC countries, we are proud to include the likes of QVC, QAPCO, Dolphin Energy and SABIC amongst our customers.
Steedman says the wealth of hydrocarbon resources concentrated in the Middle East, and the associated industries it supports, has helped keep local suppliers busy this year.
“Due to the natural resources in the Middle East, many projects in the oil, gas and petrochemical industries are still going ahead, and therefore there is still buoyancy in the pump market that is just not available in other regions of the world,” he adds.
However, not every market has been as determined to push ahead with its projects. “Kuwait, for example, has seen the majority of its projects cancelled or postponed. Saudi Arabia, Qatar and the UAE are largely pushing ahead, particularly with expansions to existing facilities,” says Steedman.
Al Mazroui represents several major pump manufacturersand provides a full range of services, including: Design engineering, fabrication, modification and upgrading, as well as installation and commissioning services.
As the projects going ahead in the region are predominantly expansions to existing oilfield and downstream facilities, demand for pumps meeting API 610 specifications seem to dominate Al Mazroui Engineering’s business streams.
“Behind this we see LPG pumps, vacuum pumps and compressors, as more vapour recovery systems are introduced as an alternative to venting or flaring, thereby preserving natural resources and reducing greenhouse gas emissions.
Steedman says that in tight times the temptation for oil companies to cut costs is understandable, but if this translates to cutting quality also, the gains may prove to be a false economy. “Our main challenge in the current economic climate, is to convince clients without the financial resources of the oil companies that cheap alternatives may very well be much more expensive in the long run. At a time when companies need to be at their most profitable and productive, downtime as a result of trying to save a few Euro’s or Dollars at the purchasing stage could be catastrophic. We believe that buying the right product with full service support is a far more economical proposition for any customer.”