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
10:00am CDT
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
11:30am CDT 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
11:30am CDT 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
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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
www.mcilvainecompany.com