April 2013 - Water Market Insights 47

Thousands of Projects Worth Hundreds of $ Billions in Booming Oil and Gas Industry

Depending on the definition, the number of opportunities in the oil and gas sector ranges from a few thousand to over one million. At the top end there are single projects where the investment will exceed $10 billion. This is the conclusion reached in Oil, Gas, Shale and Refining Markets and Projects published by the McIlvaine Company. (www.mcilvainecompany.com)

Segment	Number
Operating gas and oil wells	1,000,000
Well completions in 2012	105,000
Rigs in operation	3,500
LNG trains in operation	100
Current LNG projects	20
Current operating large gas-to-liquids plants	10
Large gas-to-liquids projects	10
Smaller gas-to-liquids projects	100
Liquid separation from natural gas projects	200
Coal to chemical new projects	50
Refineries in operation	700
New refineries in planning and construction	40
Refinery upgrades and environmental projects	1,000
Tar sands expansion and new projects	15

Existing gas and oil wells need pumps, valves, compressors, instrumentation and control equipment. Accuracy is needed due to the custody transfer and value of the products. Despite the large number of existing wells, the major capital investment is in a relatively small number of large projects.

Figure 1: Comparative Investment Value (Overnight Cost) for major Industrial Plants

Some of the investments in the oil gas industry are even larger than the investment in a new supercritical coal-fired power plant. The gas-to-liquids plant now underway in Louisiana will cost Sasol more than $10 billion. New refineries, LNG and tars sands plants are all multibillion dollar expenditures. Much of this is for liquid and gas flow and treatment equipment. In addition, the tar sands plants have big investments in material handling.

With the shale gas and liquids boom there are many projects to separate liquids from gas. Conversion of coal to chemicals is attracting billions of dollars of investment. China is the leader with both direct and indirect gasification processes.

Marine Market for Flow Control and Treatment is Growing at Double-Digit Rates

Marine vessels are purchasing air and liquid flow control and treatment equipment at an accelerating rate due to new limits on both emissions to the atmosphere and to the water. This is the conclusion reached in the McIlvaine report Air/Gas/Water/Fluid Treatment and Control: World Markets. (www.mcilvainecompany.com)

The U.S. EPA set standards for ballast water discharge in March of 2013. The compliance date is 2016. This rule is just one of a number passed by various different governmental bodies around the world. These rules will impact nearly 70,000 ships which use international ports. The average cost of treatment systems to kill invasive organisms will range from as little as $300,000 to more than $3 million.

A number of companies are generating substantial revenues already in this market. Alfa Laval just announced a $50 million SEK order from a Korean ship builder. Severn Trent has now sold 18 systems. Calgon Carbon has emerged as a major participant in this market. More than 50 companies are selling treatment systems.

This market is now the largest for the self-cleaning or automatic backwash type filters which use disks or screens to achieve particle reduction to 50 microns. Calgon Carbon has signed a long-term agreement with Amiad to supply them with the Arkal type disc filters. These self-cleaning filters are used in irrigation, municipal water treatment and even the purification of chocolate.

Another fast growing segment is the treatment of the stack gases from fuel burning. Wartsila and others are selling scrubber systems which remove both particulate and SO₂. NO_x control systems are also being purchased for some vessels.

Cruise ships are opting for advanced treatment of sewage. Several membrane bio reactor (MBR) suppliers such as GE and Hamworthy (Wartsila) have been selling systems for ships since 2002. The market includes new ships but also retrofits. Hamworthy replaced an older sewage treatment system with an MBR on the Star Princess.

Pumps and valves are integral to the ballast water and sewage treatment. They are also needed for the stack gas scrubbing systems, engine lubrication and for cargo transport on tankers. A fast growing segment for pumps and valves is the Floating Production, Storage and Offloading (FPSO) vessels. Two hundred vessels are already in use for sub-sea oil and gas extraction. The movement of the industry to deeper waters has accelerated the demand for a floating unit rather than one anchored to the seabed.

The market growth for controls and instrumentation for these processes is growing even faster than the hardware. There is a move toward smart valves. Metso has supplied its latest generation stainless steel valve controllers to the Norwegian Goliat Floating Production Storage and Offloading (FPSO) plant in the Barents Sea. The intelligent controllers are used on all pneumatic actuated control, on/off and ESD valves at the plant and help to monitor and report on valve performance for asset management purposes.

Suppliers are providing advanced control systems for all the flow processes. For the BP Angola FPSO, Yokogawa supplied an integrated control and safety system (ICSS). The ICSS provided control and safety functions for the sub-sea, marine, hull and topside facilities of the FPSO vessel along with a single interface allowing operators to start, control and monitor all facilities from a central control room.

§ Wood Group installing ECOMAX^®Systems on Combined Cycle Power Plants in US

§ ABB to supply Symphony^®Plus System for One Unit at 590 MW Grazia Deledda Sulcis in Italy

§ Metso Modernizing Automation System at Parichha Power Plant in Uttar Pradesh, India

On Thursday at 10:00 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects. Power webinars are free for subscribers to either Power Plant Air Quality Decisions or Utility Environmental Upgrade Tracking System. The cost is $125.00 for non-subscribers. Market Intelligence webinars are free to McIlvaine market report subscribers and are $400.00 for non-subscribers.

	2013
DATE	SUBJECT
April 25	Control Technologies for Fine Particulate Matter	Power
May 2	Flyash Pond and Wastewater Treatment Issues	Power
May 9	Clean Coal Technologies	Power
May 16	Power Plant Automation and Control	Power
May 23	Cooling Towers	Power
May 30	Air Pollution Control Markets (geographic trends, regulatory developments, competition, technology developments)	Market Intelligence
June 6	Report from Power-Gen Europe (update on regulations, speaker and exhibitor highlights)	Power
June 13	Monitoring and Optimizing Fuel Feed, Metering and Combustion in Boilers	Power
June 20	Dry Sorbent Injection and Material Handling for APC	Power
June 27	Power Generation Forecast for Nuclear, Fossil and Renewables	Market Intelligence
July 11	New Developments in Power Plant Air Pollution Control	Power
July 18	Measurement and Control of HCl	Power
July 25	GHG Compliance Strategies, Reduction Technologies and Measurement	Power
August 1	Update on Coal Ash and CCP Issues and Standards	Power
August 8	Improving Power Plant Efficiency and Power Generation	Power
August 15	Control and Treatment Technology for FGD Wastewater	Power
August 22	Status of Carbon Capture and Storage Programs and Technology	Power
August 29	Pumps for Power Plant Cooling Water and Water Treatment Applications	Power
Sept. 5	Fabric Selection for Particulate Control	Power
Sept. 19	Air Pollution Control for Gas Turbines	Power
Sept. 26	Multi-Pollutant Control Technology	Power

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