Maximizing Flow Control and Treatment Revenues in the Oil and Gas Industries
Flow control and treatment companies such as Flowserve who relied on the oil and
gas industry for more than one-third of its revenues are recalibrating their
market strategies to deal with capital reduction expenditures by their clients
which approach 50 percent. A webinar on August 25 will invite discussion
as McIlvaine proposes routes to both maximizing future oil and gas revenues and
protecting against future swings in the market.
The right strategy will be a combination of five right to win strategies.
Position |
Build up Asian position |
Execution |
Differentiate from competitors
and focus on total solutions |
Adaptation |
Pursue the fast growing niches |
Concentration |
Focus on products offering
lowest total cost of ownership |
Creation
|
Help create a format where
customers can easily determine
lowest total cost of ownership |
In general, there will be continued growth but with major fluctuations as oil
and gas companies over compensate in both up and down markets. So the
execution strategy includes a game plan for the down cycles. Liquid fuel
usage in 2015 was under 200 quadrillion Btu. By 2040 world usage will be
close to 250 quadrillion Btu or a 25 percent growth rate for the 25 years.
Gas consumption will grow from 130 quads to 210 quads for a growth of over 60
percent during the period.
Part of the adaptation strategy is to focus on the high growth areas both by
geography and process. Non OECD Asia is expected to account for 55 percent of
the world’s energy increase in the period to 2040. The production of
natural gas plant liquids is expected to increase by 10 million barrels per day
compared to gains of less than 3 million barrels per day for refined oil. U.S.
production of non-conventional gas including shale gas, tight gas and coal bed
methane will increase by 10 trillion cubic feet. So this will be a major
opportunity for flow control and treatment companies.
The expense of maintaining a valve used on an offshore oil rig is considerably
higher for the same service as a valve used in a land based application.
Adaptation strategies take advantage of this fact by creating valves with higher
prices and margins which can be justified based on total lowest cost of
ownership
The world’s relevant information is doubling every few years while the
individual using conventional decision making tools has a fixed ability to
absorb information. This leads to two opportunities for flow control and
treatment suppliers. One is in adaptation and one is in creation. The
adaptation strategy dictates expanding the product line to provide total
solutions and operational support. The creation strategy involves
supporting companies such as McIlvaine who are providing free Decision Guides to
oil and gas companies to help them make decisions based on total cost of
ownership. This includes more than just the evaluation of existing
products but the ability to accurately evaluate the advantages of new products.
The August 25 webinar is free of charge.
Click here to Register for the Webinars
Smog Today or Climate Change Tomorrow: The Chinese Dilemma
China has to balance the health and welfare of its citizens today with longer
range impacts of climate change. McIlvaine has a number of services which shed
light on the resolution of this difficult choice. One is
N049 Oil,
Gas, Shale and Refining Markets and Projects.
In this service, McIlvaine is following the very ambitious program in the
northern mining regions of China to convert coal to clean gas and transport it
around the country. Sinopec is proceeding with a $20 billion pipeline.
Various gasification projects are in the planning or construction stage. There
has been international criticism of this program due to its climate change
implications. Since smog in major cities has been very high on the list of
citizen complaints, a program to economically reduce it has considerable
support. The clean gas will be piped to cities around the country and will
replace dirty fuels presently burned in residential, commercial and light
industrial plants. New research substantiates this argument.
"Coal and other dirty solid fuels are frequently used in homes for cooking and
heating," said Denise Mauzerall, a professor of civil and environmental
engineering and public and international affairs at Princeton University.
"Because these emissions are essentially uncontrolled they emit a
disproportionately large amount of air pollutants which contribute substantially
to smog in Beijing and surrounding regions."
Households account for about 18 percent of total energy use in the Beijing
region but produce 50 percent of black carbon emissions and 69 percent of
organic carbon emissions, according to a research team from institutions
including Princeton, the University of California Berkeley, Peking University
and Tsinghua University. In the Beijing area, households contribute more
pollutants in the form of small soot particles (which are particularly hazardous
to human health) than the transportation sector and power plants combined; in
the winter heating season, households also contribute more small particles than
do industrial sources. The researchers said the high levels of air pollutant
emissions are due to the use of coal and other dirty fuels in small stoves and
heaters that lack the pollution controls in place in power plants, vehicles and
at some factories.
This syngas program would eliminate much of the smog problem. Its impact on net
CO2 emissions will be smaller than what is claimed by the
international opposition. The residential heating sources are inefficient.
So they emit more CO2 per unit of energy produced than will a new gas
furnace replacement. Another argument against the initiative is the impact
on water resources in the mining areas. McIlvaine has done extensive
analysis of water related activities in China. All of these plants will be
equipped with zero liquid discharge (ZLD) systems. This activity is tracked in
N020 RO,
UF, MF World Market.
In order to make the best decisions, China has to weigh the relative harm of CO2,
NOx, PM2.5, water depletion and other resource impacts. It
also has to weigh present vs. future values e.g. smog today vs. climate change
tomorrow. McIlvaine has a common metric to weigh all harm and good
Sustainability Universal Rating System.
Utility E-Alert Tracks Billions of Dollars of New Coal-fired Power Plants on a
Weekly Basis
Here are some headlines from the Utility E-Alert.
UTILITY E-ALERT
#1285 – August 12, 2016
Table of Contents
COAL – US
·
EPA is disapproving Texas State Implementation Plan (SIP)
·
EPA proposes More Time to comply with CCR
·
Coal-to-Gas Power Plant Proposal for B. L. England in New Jersey
COAL – WORLD
· Sahiwal,
Pakistan Coal-fired Power Project Sixty Percent complete
·
Lamu County, Kenya puts Coal-fired Power Plant on Hold
·
MHPS receives Order for Steam Turbine and Generator Set for Cogeneration
Facility expansion at Miaoli Plant in Taiwan
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.
Upcoming Hot Topic Hours
DATE |
HOT TOPIC HOUR
AND DECISION
GUIDE SCHEDULE
The opportunity
to interact on
important issues |
August 25, 2016
Markets |
Oil, Gas, Refining
-
Supply and demand; impact on
flow control and treatment
products; regional impacts
e.g. subsea in North Atlantic
vs. shale in the US vs. Oil
Sands in Canada. |
September 1, 2016 |
PacificCorp Webinar 4 on back
end NOx removal
- Review of options from webinar
3 to determine suitability of
catalytic filters, Sorbocal
injection for ABS control, H202
with SNCR, in duct catalyst,
raising air heater temperature
and fan adjustments. |
September 8, 2016 |
PacificCorp Webinar 5 on front
end NOx reduction
- Review of options for NOx
reduction including combustion
modifications, reburn, SNCR, and
optimization with review of
previous presentations of
Emerson, Doosan, Siemens and GE.
A number of case histories, now
being posted to PPAQD, will also
be reviewed. Summaries of phone
calls to end users may also be
included. |
TBA
Markets |
Food
- Analysis
of 12 separate
applications within food and
beverage with analysis of valve,
pump, compressor, filter,
analyzer and chemical options;
impact of new technologies such
as forward osmosis. |
TBA
Markets |
Municipal Wastewater
-
Quality of pumps, valves,
filters, and analyzers in
Chinese and Asian plants; new
pollutant challenges; water
purification for reuse. |
TBA
Markets |
Mobile Emissions
-Reduction
in CO, VOCs, and particulate in
fuels, oils, and air used in on
and off road vehicles; impact
of RDE and failure of NOx
traps and the crisis in Europe
created by the focus on clean
diesel. |
Click here to Register for the Webinars
----------
You can register for our free McIlvaine Newsletters at:
http://home.mcilvainecompany.com/index.php?option=com_rsform&formId=5
Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com