June 2016 - Pump Insights 66

Bob McIlvaine will be speaking at the Pump Summit in Houston, June 13, on a new program built around high performance pumps. The output includes decision guides for purchasers. It also includes new forecasts and routes to market for pump suppliers.

High performance pumps include both severe and critical service. Unlike general purpose pumps, the evaluation of the lowest total cost of ownership (LTCO) is challenging and much more important than initial purchase price. Therefore, the purchaser needs a great deal of information about the products available from each supplier. The supplier needs to thoroughly understand the process in which the pump will be used. He then needs to determine which of his products will provide the LTCO. Finally, he needs a way to convince the customer that his product does achieve the LTCO. The Mcilvaine Decision Guide program is designed to accomplish these goals for both supplier and purchaser.

The speech will outline the program and also provide examples with reference to exhibits at the Pump Summit which relate to the subject. The pump exhibitors include EnviroPump & Seal, KSB (GIW) Rotech and Wangen. Plasma Coating and Watson will be displaying coating techniques to help achieve the high performance.

The food industry has dedicated combined heat and power facilities with performance pumps for boiler feedwater. However, the big application is process where most pumps have to meet regulatory requirements for food safety.

• Forward osmosis and certain other processes common in the food industry require unique pump designs.

• EnviroPump & Seal replaced two pumps running in continuous cavitation conditions in a large brewery with pumps featuring a more robust shaft and seal design.

• Wangen progressive cavity pumps move food products with minimum stress with CIP design.

Sand and Gravel: Mining of sand to be used in hydraulic fracturing is now a big business in the U.S. and requires high performance pumps.

• Example: A GIW pumping solution doubled the lifespan of wear parts in the operations of a major frac sand producer in the Midwest. The highly-abrasive frac sand mining process causes extreme wear, and pump parts typically need replacement every two years. However, with installation of GIW's innovative rubber-coated parts, wear life of the pump's wet-end parts was extended to 3.75 years, when the parts were replaced during scheduled maintenance.

Copper and other minerals mining: Process accounts for 62 percent of the high performance pumps used in the mining industry.

The wet separation of ores requires pumps which must withstand highly abrasive conditions. Even so, it is not unusual for liners to be replaced at intervals as small as 500 hours. Copper, iron ore, coal, phosphate, potash and gold are among the segments with the largest pump use.

· Example: GIW application of heavy-duty, centrifugal slurry pump Enduraclad suction liner increased wear life from 450 hours to 2,000 hours at a South American copper mine and created dramatic savings for the mine's tailing-pumping operations.

Boiler feedwater pumps are found in nuclear, coal and gas turbine combined cycle plants. Higher pressure operations are increasing the pressure requirements. A number of coatings have been applied to these pumps to lengthen life. The gas turbine combined cycle plant provides unique problems due to flow accelerated corrosion (FAC) caused but the constant cycling of many GTCC plants. Most coal-fired power plants have flue gas desulfurization (FGD) systems. Some plants have as many as eight pumps each delivering 50,000 gpm of recycled slurry which is both abrasive and corrosive.

Refinery processes needed to distill crude oil into gasoline and other products include corrosive, high temperature and high pressure fluids and, in the case of FCC scrubbers, also have abrasive wastewater which needs to be pumped. Fluid coking creates challenges for pump designers. The toughest applications are found in coal-to-liquids refineries and particularly those which use direct rather than indirect liquefaction.

· Example: Warrender WMCA API-685 alloy centrifugal process pumps (superseding the MCA) are built for critical services and extreme system pressures in full accordance with the API-685 specifications. The WMCA designs are the benchmark for heavy-duty seal-less process pumps. The WMCA API 685 pumps offer the utmost in versatility and reliability in the most hazardous and severe applications. WMCA alloy centrifugal mag-drive designs are available in API 610, API 685 and API 685 multistage configurations.

Oil and Gas: The oil and gas industry high performance applications include many processes involving the transport of oil and gas as well as the removal of contaminants from the product. Fifty-nine percent of all the pumps used by industry are required to be high performance. There is also a market for wastewater pumps to deal with the produced water which can be treated and reused.

The plunger pumps needed for developing the high pressures to deliver fracturing sand slurries many thousands of feet underground with enough force to break shale require the most corrosion and abrasion resistant pump designs.

Coatings: In recent years, new coatings have considerably increased pump performance in many applications. Jake Brunsberg of Plasma Coatings summarized some of the main processes used in the application of such coatings in a recent article written by McIlvaine:

Nearly half the industrial pumps which will be sold next year will classify as high performance. According to the latest forecast in Pumps: World Markets sales of high performance pumps in 2017 will reach $23 billion.

The criteria for this category are both severe and critical service. Those pumps which have to be engineered to withstand corrosion, abrasion, high temperature and pressure are classified as in “severe service.” Those which must meet high purity and safety requirements such as found in the food and pharmaceutical industry are classified as in critical service. High performance pumps are further distinguished by being specially engineered and not being stocked commodity products.

These pumps are used in many different industries. The oil and gas applications are the largest with predicted purchases next year in excess of $6 billion. A relatively small percentage of municipal wastewater pumps are classified as high performance. But, since the wastewater pump market is so large, even a small percentage results in a $3 billion annual high performance pump market. The chemical and refining industries will also be major purchasers. The power industry will be a bigger market in Asia than in other regions. A number of new ultra-supercritical coal-fired power plants are under construction. Each will have millions of dollars of high performance pumps.

International suppliers have a large share of the high performance pump market and a smaller share of the commodity pump market. It will continue to be easier for an international company to penetrate a local market with its high performance products rather than its commodity products.

Greater profits can be reaped from high performance pump sales because of the higher gross margins. On the average it is estimated that the gross margin from a high performance pump sale is 35 percent versus just 25 percent for a commodity pump. So, despite the smaller market size of the high performance pump market, the gross profit will be higher.

Use	High Performance Needs
Water Intake	Extraction from wells, lakes and streams involves some pre-treatment. High performance pumps are required in some pre-treatment schemes and where intake water is corrosive e.g. some wells.
Cooling	Cooling is either once through or recirculating through cooling towers. There are few high performance pump requirements.
Combustion	Power producers and industrial plants requiring steam and power need high performance boiler feedwater pumps.
Process	Many process schemes incorporate high performance pumps to move or convert a product.
Wastewater	Wastewater with abrasive solids or corrosive chemicals requires high performance pumps.

In the power industry, combustion is the largest application due to the boiler feedwater requirements. In most other industries, the process use is the greatest. The processes can be further segmented by function.

Function	High Performance Pump Needs
Transport to or from storage	Medium
Transport to the next process	Medium
Play a role in the product creation	High
Utilities such as lubrication, hydraulic power, heating and cooling	Low and not included in the forecasts
Extraction and measurement of samples	Low

The processes which play a role in product creation can be further segmented by the type of change with which they are involved.

Process	High Performance Pump Needs	Examples
Mixing	medium	Fluid-to-fluid or gas-to-fluid e.g. wastewater pump which moves and aerates or ammonia pump which disperses fluid in gas stream to react with NO_x
Heat/Cool	medium	Cryogenic and LNG high temperature foods which must not be damaged by transport
Separation	high	Feed and discharge from centrifuges, filter presses, clarifiers. In wet mineral size reduction and separation, there are highly abrasive slurries.
Dehydration/ Evaporation	high	Slurries created in crystallization, pumps at high pressure to move liquor through spray drier nozzles
Reaction/Absorption	high	Varying temperatures, fluid state and pressure needs of the reactor or absorber. Function is often to recycle and disperse.
Cleaning or blasting	high	Develop pressures to clean scale from castings and fracture shale
Disinfection	medium	Dispersions of large quantities of chemicals in liquid
Displacement	high	Water injection to displace oil

Pump suppliers should seek to understand as much as possible about the industries, processes and functions within those processes where their pumps might be used. The pump designers can provide solutions and not just hardware if they can first understand the needs. Sales and senior management need to understand the processes in order to better predict future market opportunities.

Large Individual Projects and Multiple Small Projects by Large Treatment Plants make Sales easier for Suppliers to North American Municipal Wastewater Plants

Ten percent of North America’s 20,000 wastewater plants buy the majority of the flow control and treatment equipment purchased by wastewater treatment plants in North America. Their large expansions and upgrades account for a majority of capital expenditures. This allows the supplier to identify his prospects months or years in advance of the actual sale. If the supplier is relying on quality rather than price to sell his product, then the opportunity to shape the final decision well in advance is critical.

An example of a large project is The Lions Gate Wastewater Treatment Plant in Vancouver. It has been told by the federal government it must upgrade to secondary treatment by December 31, 2020. The plant is one of two remaining primary treatment plants in the region. New federal regulations require all primary treatment plants be upgraded to secondary treatment. The cost will exceed $2 billion. So this is a project which will involve contacts with the city and A/E over the next two years in order to maximize order potential.

Some smaller projects are predictable long in advance due to new regulations or outdated technology. Plants with lagoons for sludge dewatering are likely to be considering changes. The City of Alliance, Ohio plans to build a dewatering system. Its lagoons are full. Over the20 year life of a new plant there is economic justification for this investment. It is good to be alerted to specific projects but, if you are selling dewatering equipment, you should be calling on every plant with lagoons and every plant with 20 year old dewatering equipment.

One way to make sure that you thoroughly pursue the large opportunities is to single out the largest prospects in each state. Here is a sample for Colorado:

Numeric by Flow Rate (MGD)	Plant Name
40	Aqua Nueva Wastewater Treatment Plant
30	Pima County Wastewater Treatment Plant
17.5	Tolleson, City Of
14.74	Nogales International Wastewater Treatment Plant
102.24	Total

Wastewater Industry - Percent of U. S. Market by State
STATE	2015	2016	2017	2018	2019	2020
Alaska	0.24	0.24	0.25	0.25	0.25	0.26
California	12.20	12.42	12.65	12.87	13.11	13.34
Hawaii	0.43	0.44	0.44	0.44	0.44	0.45
Oregon	1.26	1.28	1.30	1.33	1.35	1.38
Washington	2.21	2.25	2.29	2.34	2.38	2.42
TOTAL Pacific States	16.35	16.64	16.93	17.23	17.53	17.84
Arizona	2.13	2.16	2.20	2.24	2.28	2.32
Colorado	1.71	1.74	1.77	1.80	1.83	1.87
Idaho

In 2017, Colorado’s secondary municipal wastewater capacity will be 1.77 percent of the total 40,000 mgd for the U.S. The top four plants have a total of over 100 mgd capacity which is 14.7 percent of the 680 mgd for the entire state.

Chemical manufacturing companies in the U.S., Canada and Mexico will spend over $440 million for high performance pumps in 2017. This is the latest forecast in the McIlvaine publication Pumps World Market.

What are high performance pumps? McIlvaine is using its own definition which includes both severe and critical service. Severe service is defined as an application where corrosion, erosion, pressure, or temperature is a concern. It also includes flow variables such as pumps which must run dry on occasion or are subject to rapid starts and stops.

Critical service entails impact on the product or the process. Product purity is critical for many chemical products. Contamination from pump components needs to be eliminated. In certain cases, damage to the product is a concern. The percentage of solids to be transported can be very high and create challenges for pump suppliers. The pump efficiency over the flow range is another factor which can be important.

There are no high performance pumps used in cooling where once-through water or cooling towers are utilized. Water intakes do not require high performance pumps (ultrapure water treatment is included in process separation). The biggest market is in process applications. End users and process OEMs in NAFTA will spend $330 million for pumps actually moving process fluids. Processes can be further categorized as follows:

Process	High Performance Pump Needs
Storage	low
Metering	low
Measurement	low
Heat/Cool	medium
Separation	high
Dehydration	high
Reaction/Absorption	high
Evaporation	high
Disinfection	medium

The major uses of high performance pumps with process fluids are in separation and reaction. There are many chemical processes. Each has its unique requirements. Suppliers of high performance pumps who understand the chemical processes can achieve high profit margins in this industry segment.

This alert is being issued twice per month for suppliers in flow control and treatment who are coordinating market research with targeted pursuit of the larger and longer term orders.

The following projects each will result in millions of dollars of orders for flow control and treatment products. Each project has been rated. The opportunity size is rated from 1-10 with 1 being small and 10 being very large. The timing for flow and treatment orders has been provided by year, e.g. T 16 = timing of order is 2016.

Williams Advances Unique Position in Canada with Startup of Second Offgas Processing Plant

Rangeland Energy Begins Development of South Texas Energy Products System (STEPS)

Primus Green Energy’s North American Methanol Plants Allow for Local, Cost-Advantaged Production

Veresen Concludes Key Terms with JERA for Jordan Cove Liquefaction Capacity (T17)

Amec Foster Wheeler Awarded Feasibility Study Contract for Karachi Refinery Upgrade (T16)

These projects are covered in more detail and are integrated in a database which is part of Oil, Gas, Shale and Refining Markets and Projects. This semi-monthly report is available as part of this service or as a stand-alone subscription.

The Oil/Gas/Shale/Refining E Alert is issued twice per month to registered subscribers. It is not to be resent to others. Each subscriber must be registered. The first subscription is $950/yr. and additional subscribers are $90/yr. The newsletter is free for those who subscribe to N049 Oil, Gas, Shale and Refining Markets and Projects.

There is a 30 percent discount for those building an Opportunity Creation package with one or more of the market reports and one or more of the E Alerts.

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