April 2015 - Filtration and Centrifugation Insights 64

$7 Billion will be spent for Liquid Macrofiltration Products and Media in 2017

In 2017 sales of liquid macrofiltration products including equipment and media will be just under $7 billion. The biggest investment will be for granular media filters. They are used to purify drinking water by municipalities. The second largest segment includes filter presses and media. This equipment is used in processing food and chemicals. Bag filters are used to clean up wastewater as well as separate products from liquids.

Belt filter presses dewater sludge. Municipalities use belt filter presses or centrifuges to dewater sewage sludge. Robust expansion of municipal wastewater treatment in Asia will drive this market next year.

The automatic backwash filter competes with cartridges and is growing faster than other segments even though the base was lower.

International Strategy is Critical for Survival in the Flow Control and Treatment Industries

Whether you sell pumps, valves, filters, fans, compressors, treatment chemicals, scrubbers or centrifuges, you cannot focus on just the U.S., China, or EU market. Here are some examples of major opportunities elsewhere:

Industry	Country
Aquaculture	Indonesia
Bauxite	Kazakhstan
Cement	Turkey
Coal-fired power	Vietnam
Coal mining	Columbia
Copper	Chile
Desalination	Israel
Flat Panels	South Korea
Gas Extraction	Nigeria
Iron Ore	Ukraine
LNG	Australia
Pharmaceuticals	India
Petrochemicals	Saudi Arabia
Phosphate	Morocco
Pulp/Paper	Brazil
Potash	Canada
Refineries	Algeria
Semiconductors	Taiwan
Steel	UAE

The U.S. has placed a moratorium on new coal-fired power plants but China will build far more than the EU or that the U.S. will retire. Vietnam, Indonesia and Myanmar are building power plants with a combined capacity of 150,000 MW.

China is the largest fish farming country, but Indonesia is also large. The industry is moving to sophisticated recirculating systems with a big investment in flow control and treatment equipment.

Australia, a leader in iron ore and coal mining, has become a recent player in LNG with successful conversion of coal bed methane.

Individual projects can measurably impact the market in a given year. There are nine large Canadian potash projects underway with a combined capital investment of over $30 billion. The largest project will require a $4 billion investment. Algeria’s state-owned Sonatrach has let a series of contracts to Amec Foster Wheeler to provide front-end engineering and design (FEED) for three grassroots refineries that will add a total of 15 million tons/year in refining capacity in the country. These few projects represent a significant percentage of the yearly flow control and treatment revenues for the worldwide industry.

Coal-fired projects in Indonesia could result in an investment of over $100 billion. Vietnam is vacillating on plans which would require a coal-fired power plant investment of over $200 billion. Delay or cancellation of large projects can materially affect the revenues of the flow control and treatment suppliers.

Flow control and treatment companies need to pursue the world market. There are 196 countries with more than 50 major industries who purchase flow control and treatment equipment. Many of these countries are quite small. McIlvaine forecasts divide the world into 80 purchasing entities which include 72 separate countries and 8 country groups. The pump forecast example below shows pump sales in Pakistan will be $216 million in 2021, but sales will only be $22 million in a group of countries labeled “Other Western Europe.”

Industrial Pump 2021 Revenues
Country or Entity	Revenues $ Billions
New Zealand	69.51
Nigeria	411.34
Norway	283.79
Other Africa	775.41
Other CIS	198.22
Other East Asia	89.62
Other Eastern Europe	108.45
Other Middle East	825.15
Other South & Central America	462.79
Other West Asia	14.15
Other Western Europe	21.90
Pakistan	216.54
Peru	165.93
Philippines	260.63
Poland	377.89

The countries aggregated in the Other Western Europe category are Andorra, Faroe Islands, Gibraltar, Greenland, Guernsey, Iceland, Isle of Man, Jersey, Lichtenstein, Luxembourg, Malta, Monaco, San Marino and Vatican.

The average for the 80 entities in a $60 billion annual market is 0.75 percent. While, as individual countries, many in the “other” category are insignificant, as a group they are relevant. This is particularly true for the Other Africa group which accounts for 0.75 percent of the total market and the Other Middle East group which in the aggregate is bigger than the average.

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.

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Shell Chemical Breaks Ground on $717 Mln Louisiana Plant Expansion (06, T16)

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CUI Global Announces First Delivery of its GasPT® Technology to Europe's Snam Rete Gas

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Alfa Laval Wins SEK 60 Mln Energy-efficiency Order for Russian Refinery (06, T16)

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Fluor Awarded Construction Management Contract by Sunoco Logistics for Mariner East 2 Project

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Statoil Awarding Contracts for Oseberg Vestflanken 2, Johan Sverdrup and Gina Krog #1 (08, T16)

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Statoil, Wellhead Platforms, Contracts, Marine, Offshore, Approval, Pipelaying, Construction, Installation, Procurement, Development, Operations, Norway

Statoil Awarding Contracts for Oseberg Vestflanken 2, Johan Sverdrup and Gina Krog #2 (08, T16)

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Statoil, Pipeline, Platforms, Offshore, Pipeline, Production, Norway

Statoil Awarding Contracts for Oseberg Vestflanken 2, Johan Sverdrup and Gina Krog #3 (08, T16)

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Statoil, FSO, Pipelines, Storage, Pipeline, Norway

Phillips 66 Partners Acquires 25 Percent Interest in Sweeny Fractionator One and Clemens Caverns

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Phillips 66 Partners, Phillips 66 Sweeney Frac LLC, Fractionator, Facilities, Refining, Acquisition, Fractionation, Storage, USA

Emerson to Help Cameron LNG Deliver Complex, Multi-Billion Dollar LNG Project on Schedule (06, T16)

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Howard Midstream Energy Partners and Grupo Clisa, Nueva Era Pipeline Details (T16)

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Howard Energy Partners Proposes $500 Mln Pipeline System from Corpus Christi, TX to Monterrey, México (07,T16)

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Increasing Investments in Gas Exploration and Offshore Oil to Boost Global FPSO Market According to Report

Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Hyundai Heavy Industries Co., Teekay Group, Samsung Heavy Industries, Yinson Holdings, Bumi Armada Berhad, Bluewater Energy Services, BW Offshore, MODEC, SBM Offshore, Aker Solutions, Tanker Vessels, Analysis, Financing, Construction, Conversion, Investment, Growth, Exploration, Forecast, Americas, Europe, Asia, Africa, Oceania

Transparency Market Research Report Says Oil Spill Management Market to Reach $114.4 Bln by 2020

Tags: , Cameron International, Hyundai Heavy Industries Co., GE Oil & Gas, SkimOil Inc, Fender & Spill Response Services, Control Flow Inc, National Oilwell Varco, Northern Tanker Co Oy, Pipeline, Equipment, Blowout Preventer, Market, Regulation, Offshore, Onshore, Technology, Pipeline, Drilling, Leak Detection, Management, Spill Response, North America, Europe, Asia, Rest of the World

Forsys Subsea Awarded Subsea FEED Contract for Trestakk Field Development with Statoil

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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.

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.

Oil and Gas Market for Sedimentation and Centrifugation Equipment will be $400 Million this Year

Sales of clarifiers, dissolved air flotation, hydro-cyclones and centrifuges for the oil and gas industry will be level in 2016 at $400 million. This makes it a small segment in the $7.4 billion sedimentation and centrifugation market. The reduction in drilling activity has a significant impact on sales of this equipment. There are a few bright spots. For example, with fewer new holes to act as storage sites for produced water there is more focus on purification and reuse.

The two largest centrifuge manufacturers participate in this market, but the lion’s share of the business is obtained by specialist companies.

Alfa Laval LYNX drilling mud decanter centrifuges are designed specifically to remove unwanted solids and fine particles from virtually all kinds of used drilling mud, including those based on water/synthetics and conventional oil-based drilling fluids.

GEA with sales of €1.3 billion in the fourth quarter 2015 is one of the top two centrifuge suppliers. However, sales to the oil and gas industry represent only 2 percent of their total revenue. In the oil and gas industry, GEA centrifuges dewater and desalinate oils of low density and viscosity. They also efficiently process heavy oils with a specific weight of 14 degrees API and less, which experience has shown is not the case when treated using conventional static and electrostatic methods. The low density difference between oil and water can only be handled by multiplying the g-forces with maximum centrifugal velocities; this is the advantage of centrifuges.

For the largest droplets, gravity separators without coalescers are frequently used. Parallel or corrugated plate separators are used for dispersions down to 40 microns. Knitted mesh packing type coalescers are for smaller droplets down to a few microns. Cartridges are used for droplets in the submicron level. DAF and centrifuges also find use.

Oil Removal from Produced Water Particle Diameter Removed - Microns
Gravity Clarifier	150
Corrugated Plate Separator	40
Flotation with Flocculants	5
Hydro-cyclone	15
Centrifuge	2

The use of sedimentation equipment is greater for tight gas and for deep ocean. Globally, shale gas is expected to grow by 5.6 percent per year between 2014 and 2035, well in excess of the growth of total gas production. As a result, the share of shale gas in global gas production more than doubles from 11 percent in 2014 to 24 percent by 2035. This will create an expanding separation market.

Filter revenues for mobile, medical, residential/commercial and industrial applications will exceed $70 billion in 2016. No one company has more than 5 percent of the total market. These are the conclusions reached by the McIlvaine Company by aggregating data in a number of its reports.

Filtration Revenues for 2016 in Color Coded Size Segments
	Mobile	Medical	Residential	Industrial	Total Filter Sales
Donaldson
Clarcor
Mann & Hummel
Daikin
Fram
Cummins
Mahle
Pall
Filtration Group
3M
Millipore
Parker Hannifin
Eaton
Pentair
Culligan
Dow
Koch Membranes
CECO

Revenues are displayed in segments representing $ millions: 0 – 250, 250 – 700, 700 – 1400,

The largest market segment is stationary industrial liquid cartridges with a 2016 market of $17 billion. This is followed by the mobile liquid cartridge market. Mobile air filters, hydraulic and compressed air filters, cross-flow filtration, liquid macrofiltration, dust collection, HVAC filters, and coalescing filters are the remaining product segments.

A small but rapidly growing market is filtration of diesel exhaust fluid (DEF). Urea/water injected into engines freezes at relatively high temperatures, so filters are needed to prevent frozen particles from reaching the engine.

Not a single company is in the top five in each category. Those in the residential segment tend not to be in mobile. Most of the companies are U.S. based.

Donaldson is a major player in mobile and industrial air filtration. Their sales of liquid filtration products primarily for diesel engines have grown recently at double-digit rates. The diesel liquid filter sales are presently $500 million. The company is not involved with commercial/residential filtration in a significant way.

Clarcor sales of engine and other mobile filters are $600 million per year. Process liquid filter sales are $350 million per year while industrial air filter sales are $475 million. It is not a player in medical and residential applications.

Mann & Hummel has made both industrial and mobile acquisitions but its purchase of Wix with $900 million of revenue in the mobile sector was the largest purchase.

Daikin sales in 2015 were ¥2 trillion. With the acquisition of Flanders filter sales are ¥100 billion or $890 million.

Twenty-two percent of Parker Hannifin sales of $11 billion are in filtration and engineered materials. Its strengths are mobile and industrial.