June 2016 - Pump Insights 67

The George Brown Convention Center in Houston was the location for two simultaneous conferences on pumps and fugitive emissions on June 13 and 14. A power plant pump workshop on Tuesday included three panelists: Ryan Kremer of Flowserve, William (Bill) Livoti of WEG and Lloyd Aanonsen of General Rubber.

Bill points out that most coal-fired power plants are now cycling and running most of the time at less than full load. This means pumps are consuming more energy than they should. Variable speed drives and other measures should be taken to optimize pump performance at various loads.

Bob McIlvaine gave a speech on high performance pumps for various industries. Mcilvaine is using its own definition of high performance 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.

Unlike general purpose pumps, the evaluation of the total lowest cost of ownership (LTCO) is challenging and much more important than initial purchase price when it comes to high performance pumps. 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.

55 percent of the pumps used in the power industry fall into the high performance category.

Power Industry - Pump Segmentation High Performance and Non-High Performance Service
	% Total Market	% High Performance	% Non-High Performance
Water Intake	10	3	7
Combustion	50	40	10
Cooling	20	0	20
Process	10	8	2
Wastewater	10	4	6
Total	100	55	45

One of the biggest applications in power is the combustion process which requires boiler feed water pumps with high pressures. Boiler feed water pumps are found in nuclear, coal and gas turbine combined cycle power 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 power plant provides unique problems due to flow accelerated corrosion (FAC) caused by the constant cycling of many GTCC plants.

Most coal-fired power plants have flue gas desulfurization systems. Some plants have as many as eight pumps each delivering 50,000 gpm of recycled slurry, which is both abrasive and corrosive.

The conference was accompanied by an exhibition. One of the suppliers of coatings and overlays for pumps and valves is Plasma Coatings.

The best way to raise prices without losing business is to provide a product which justifies a higher initial price. To accomplish this you need to:

McIlvaine is currently preparing a Decision Guide on choke valves for oil and gas applications. These are tough applications and require custom valves designed for severe service. This is only part of the story according to George Gorman of the Valve Institute. The success or failure of a valve rests not only on the valve merits but on how it is applied. Subsea pipeline valve needs are different from sub-sea Christmas tree needs. Both are certainly different from the needs at the surface or on shore. The best valve choice requires detailed knowledge of the unit operations. When it comes to subsea valves his Institute is dedicated to providing insights on best choices with separate training courses on subsea pipeline and Christmas tree valves.

But what are the needs of the long-time valve practitioner? Does he need an even more robust system? Input from a number of both supplier and end user experts in the McIlvaine Insights discussions leads to the conclusion that considerable analysis and discussion is needed. Muktiadi Rahardjo of Shell is the valve and sealing specialist at the Shell Pernis refinery and, based on this experience, recommends better communication relative to valve issues. He cited a lack of application knowledge on the part of some vendors and the inability to utilize the wisdom existing within the end user community.

If you rank the impact of a product on the process, the valve is at the bottom of the rankings. The product using the valve, e.g. a pump system, will be more important by virtue of the fact that it typically would include a pump and at least three valves. The scrubber company product which includes the valves, pumps, fans, nozzles and scrubbing tower is obviously of most impact on the process. So, if we agree that process knowledge is necessary to provide the best valves, then it follows that even more process knowledge is needed for suppliers of the sub processes What can we conclude from all of this?

· IN ORDER TO DEVELOP A SUPERIOR PRODUCT YOU HAVE TO UNDERSTAND THE PROCESS WHERE THE PRODUCT WILL BE APPLIED.

· TO CONTINUE TO PROVIDE THE SUPERIOR PRODUCT YOU HAVE TO KEEP UP WITH PROCESS CHANGES AND NEW REGULATORY AND OTHER CUSTOMER NEEDS.

· FOCUS YOUR PRODUCT DEVELOPMENT EFFORTS BY PRIORITIZING CUSTOMER NEEDS IN SUCH A WAY TO MAXIMIZE MARGINS AND PROFITABILITY.

The best product is defined here as the product with the lowest total cost of ownership. This definition is couched in the broadest terms. It has to take into account the severity of the service but also the criticality. A peaking gas turbine which cycles a few times per year and can be easily accessed for maintenance is in a non-critical application compared to the base-loaded turbine which is in operation 24/7 and cycles hundreds of times per year.

It is easy to pick the lowest cost product but much more difficult when you have to assess the lifetime cost based on both severity and criticality. The first step in creating a convincing program is to understand how decisions will be and could be made.

· Decision making is a series of classifications. Whether it is the initial bidders list, the criteria in the specifications or the ultimate selection the decision maker is moving from one set of classifications to the next.

· The elements of the classifications are: what, which, why and how. In order to be successful you have to convince some people of just the “what” and “which” and others you also need to add the “why.” The “how” is the big challenge which provides credibility to the other elements.

o What are the classifications?: If you are going to remove SO₂,should you consider wet limestone, wet lime, dry sorbent injection, spray driers, or seawater scrubbing?

o How does the product perform uniquely enough to justify the prediction that it will result in the lowest total cost of ownership?

· The what, which and why can be communicated through normal sales channels. The decision guides add clarity. The problem is that the credibility depends on the “how.” It is a lot easier to claim the highest efficiency or lowest maintenance cycle than it is to prove it.

McIlvaine recognizes the challenge of convincing customers that a product has the lowest total cost of ownership and has a whole program to address it: 4 Lane Knowledge Bridge to the End User

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.

Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a Weekly Basis

Georgia Power will cease operations at all Coal Ash Ponds within Three Years

Mitsubishi Corporation awarded Contract for renovation of Taiwan Power Company's Boilers and Environmental Facilities

The 41F Utility E-Alert is issued weekly and covers the coal-fired projects, regulations and other information important to the suppliers. It is $950/yr. but is included in the $3020 42EI Utility Tracking System which has data on every plant and project plus networking directories and many other features.

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.

Amec Foster Wheeler to Undertake BED Study for $4-$5 Bln Cilacap Refinery Upgrade Project (08, T20)

Tags: 324110 - Petroleum Refineries 石油精炼, Amec Foster Wheeler, Pertamina, Saudi Aramco, Refining, Engineering, Study, Design, Upgrade, Production Capacity, Indonesia

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Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Emirates LNG LLC, Mubadala Petroleum, International Petroleum Investment Co, Onshore, Joint Venture, Import, Regasification, Storage, Delays, UAE

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Novatek, Project, Liquefaction, Feasibility Study, Development, Russia

FMC Technologies and Technip to Combine: Driving Change by Redefining the Production and Transformation of Oil and Gas

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, FMC Technologies, Technip, Subsea, Onshore, Offshore, Technology, Innovation, Solutions, MoU, Services, Integration, Production, Manufacture, Transaction, Growth, Cost Reduction, Merger, USA, France, UK

Jacobs Wins General Engineering Services Contract for SATORP in Saudi Arabia

Tags: 325110 - Petrochemical Manufacturing 石化产品生产, 324110 - Petroleum Refineries 石油精炼, Jacobs Engineering, SATORP, Refining, Engineering, Design, Feasibility Studies, Saudi Arabia

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Wintershall, Halliburton Norge, Tools, Subsea Template, Wells, Exploration, Cementing, Engineering, Development, Drilling, Norway

Jacobs Wins Contract with Mitsubishi for $100 Mln Expansion of South Carolina Plant (07, T16)

Tags: 325110 - Petrochemical Manufacturing 石化产品生产, Mitsubishi Plastics, Mitsubishi Polyester Film, Jacobs Engineering, Production Lines, Technology, Engineering, Installation, Operational Efficiency, Expansion, USA

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Cenovus Energy, Diluent Recovery Units, Rail Terminal, Shipping, Production, Permitting, Construction, Growth, Canada

China's First Private-led $15 Bln Mega-refinery Planned off East Coast (08, T18)

Tags: 324110 - Petroleum Refineries 石油精炼, 325110 - Petrochemical Manufacturing 石化产品生产, Zhejiang Rongsheng Holding Group, Huanqui Contracting and Engineering Corp, Luoyang Petrochemical Engineering Corp, Construction, Design, Refining, Environmental Approval, China

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, NextDecade LLC, FERC, Pipeline System, Liquefaction, Export, Application, Site Evaluation, Construction, Operations, Pipeline, Investment Decision, USA

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, DEPA, Bulgaria Energy Holding (BEH), Pipeline, Joint Venture, Investment Decision, Bidding, Interconnection, Pipeline, Construction, Greece, Bulgaria

Transnet Interested in $25 Bln Investment in African Pipeline, Port Projects

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Transnet, Pipeline, Modernize, Pipeline, Expansion, Investment, Nigeria, Kenya, Uganda, Tanzania

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, AltaGas, Idemitsu Kosan, Joint Venture, Liquefaction, Suspension, Canada

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Engie, EDF, Hydraulic Fracturing, Import, Ban, Environmental Impact, France

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, EPA, Wells, Greenhouse Gas, Regulation, Technology, Drilling, Emissions Reduction, Methane Emissions Compliance, Monitoring, Inspection, USA

Tags: 325110 - Petrochemical Manufacturing 石化产品生产, Singapore Jurong International Holdings, Nanshan Group, Environmental Standards, Health, Feasibility Study, Cancellation, Environmental Impact, China

China Firm Wins $620 Mln Contract to Build Cambodia's First Oil Refinery (06, T16)

Tags: 324110 - Petroleum Refineries 石油精炼, China National Petroleum Corporation, Northeast Refining and Chemical Engineering Co, Cambodian Petrochemical, Engineering, Construction, Cambodia

Tags: 324110 - Petroleum Refineries 石油精炼, MDU Resources, Calumet Specialty Products, Review, Demand, Refining, Slowdown, USA

Tags: 325110 - Petrochemical Manufacturing 石化产品生产, 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, SABIC, Industrial, Growth, Oil-to-chemicals, Coal to Chemical, UK

Tags: 324110 - Petroleum Refineries 石油精炼, Saudi Aramco, Naphtha Hydrotreater, Environmental Standards, Sulfur Removal, Refining, Bidding, Upgrade, Hydrotreating, Saudi Arabia

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Suncor Energy, Canadian Natural Resources, Syncrude, ConocoPhillips, CNOOC, Equipment, Restart, Production, Steam Assisted Gravity Drainage, Shutdown, Canada

EagleClaw Midstream Commissions Toyah I Cryogenic Processing Plant, Toyah II Plant Is Underway

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, EagleClaw Midstream Ventures, Honeywell UOP, Pipeline, Gas Processing, Pipeline, Gas Gathering, Cryogenic, Compression, USA

Bechtel’s ThruPlus® Delayed Coking Technology Selected for Egyptian Refinery

Tags: 324110 - Petroleum Refineries 石油精炼, Bechtel, Egyptian General Petroleum Corp, Delayed Coking Unit, Design, Delayed Coking Process, Upgrade, Refining, Egypt

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, 324110 - Petroleum Refineries 石油精炼, Investment Leaders Group, Cost, Utilities, Refining, Gas Processing, Production, Emissions Reduction, Carbon Pricing, UK, Spain, Germany, Canada, USA

ExxonMobil to Expand Australia’s Altona Refinery to Supply More Diesel, Jet Fuel (T16)

Tags: 324110 - Petroleum Refineries 石油精炼, ExxonMobil Australia, Refining, Energy Efficiency, Production Capacity, Australia

Owner of Moroccan Refiner Samir Pledges to Inject $680 Mln to Reverse Liquidation

Tags: 324110 - Petroleum Refineries 石油精炼, Corral Petroleum Holdings AB, Samir, Financial, Shutdown, Financing, Refining, Morocco

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.

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