May 2016 - Industrial Valve Insights 66

This is the takeaway from an interview of Muktiadi Rahardjo in Valve World, April 2016. He is presently the valve and sealing specialist at the Shell Pernis refinery but has previous experience with Aker Kvaerner and Cameron where he was also focused on valves.

Adi estimates that over two million valves are now in use at Shell refineries and chemical plants. In his role of overseeing the specifying, testing and evaluation of valves, he continually asks himself:

Shell has extensive standards, protocols and procedures but this does not mean that the valve delivered today is equal to the one that was tested previously. Adi wants to encourage better communications all along the supply chain.

Leakage is one issue where better communication is needed. The European focus on mimizing fugitive emissions is not necessarily a focus elsewhere. Adi believes that communicating the basis of certain specific spindle tolerances, surface finishes and type of packing is important.

The communication needs extend to materials. Adi points out that there are applications where PTFE is not the best seal material. Stellite and tungsten carbide are often seen as interchangeable, but the selection of coating material can be critical.

McIlvaine is also trying to use dialogue to improve valve performance through constantly updated decision guides on severe service valves. We have asked Adi if he has any comments on the three types of molecular sieve switching valves which we have analyzed.

Severe Service Valve Sales to the Chemical Industry will be just under $4 Billion in 2017

Severe service valves are required for 56 percent of all the valve applications in the chemical industry. The definition of severe service includes valves which are subject to abrasion, corrosion, unusual pressures, or must be designed to meet stringent safety, sanitation, or contamination requirements.

Severe service valves are required for 75 percent of the process applications. Since the process segment accounts for 63 percent of all the valves sold to the chemical industry, the process severe service valves account for 42 percent of all the valves sold to the industry.

Water used for cooling requires virtually no use of severe service valves. Only 30 percent of the water intake valves are in the severe service category. About half the wastewater valves are designed for severe service. These are valves handling the slurry.

In 2017, the sales of severe service valves for processes will be just under $3 billion with the balance of $1 billion in the other three categories.

The percentages are based on revenues rather than amount of flow or the number of valve units. While severe service valves will account for 56 percent of the revenue, they will account for less than 30 percent of the flow and 20 percent of the unit sales.

Decision Guides on severe service valve options are already available for coal-fired power, gas turbine combined cycle power plants, nuclear plants and molecular sieve switching in gas treatment.

Flow Control and Treatment Component Solutions provide a $500 billion Market

The market for components used in flow control and treatment will be $395 billion in 2017. However, component suppliers have the opportunity to increase sales by 20 percent and gross margins by 40 percent by providing solutions which give the customer the lowest total cost of ownership (LTCO). This the latest prediction in N064 Air/Gas/Water/Fluid Treatment and Control: World Market.

Function	Component Examples	2017 World Revenues $ Billions
Flow Control Liquids	Pumps, Valves	160
Flow Control Air/Gases	Compressors, Fans, Dampers	45
Filtration and Separation of Liquids	Filters, Centrifuges, Clarifiers, Cross-flow Membranes	50
Oxidation and Destruction Treatment for Liquids	Biological and Chemical Treatment including Digesters, Aerators, Treatment Chemicals, etc.	60
Indoor Air and Stack Gas Treatment	Filters, Scrubbers, Catalytic Reactors, Nozzles	80
Total		395

Component sales in 2017 will be just under $400 billion. However, if component suppliers were to pursue the solutions approach, the potential expands to well over $500 billion. This is easier said than done. The component supplier needs to understand the customer needs. In turn, this means understanding the sub process, the process and the industry.

The Role of Components in Solutions
Industry
	Process
		Sub Process
			Solutions
				The LTCO Valve Product

If the supplier thoroughly understands the customer needs, he can tailor his product to best fit those needs.

Let’s take an example. A typical valve controlling compressed air is a commodity product. One application involves pulsing air to clean filter bags. Pentair has become the world leader in this specialty niche by understanding the dust collection cleaning process and the variations needed for various different industries. Pentair supplies not only the valves but the headers and the controls to optimize the cleaning process.

Many industries need evaporation processes. Mechanical Vapor Recompression (MVR) is one sub process which minimizes total energy consumption. Colfax Howden has a number of blowers and fans to offer depending on the flow and temperature increase needed. However, it has also developed the ExVel^® fan specifically for this unique application. The impellers are suited to abrasive and corrosive conditions encountered as the steam is recompressed.

W.L. Gore has developed a number of innovative solutions based on process and industry knowledge. Most power plants have wet flue gas desulfurization (FGD) systems. There are new rules to reduce mercury. Wet FGD systems will remove most of this mercury with the right treatment chemicals. The conventional solution to remove the remainder of the mercury is to use activated carbon upstream. The problem is that any mercury removed by the carbon reduces the amount captured in the scrubber. W.L. Gore developed a module which can be installed after the scrubber and efficiently remove remaining mercury.

Flowserve is a major supplier of pumps for reverse osmosis (RO) processes. Desalination of seawater is a big potential market. High energy cost is one of the major factors reducing the market potential. Flowserve understood that a solution was energy recovery and acquired a company to provide it. (Calder DWEER™)

Most flow control and treatment equipment will be purchased in countries with less application experience than in the past. This means that international suppliers have a great opportunity to develop and sell solutions to ensure that the customer selects the lowest total cost of ownership (LTCO). For more information, click on: N064 Air/Gas/Water/Fluid Treatment and Control: World Market.

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.

Minatitlan Refinery $800 Mln ULSD Contract Awarded to Técnicas Reunidas (07,T17)

KBR Wins Multi-phased Contract for Front-end Engineering and Design for Woodfibre LNG

Black & Veatch Win Chinese Shanxi Qixian Liquefied Natural Gas Project (T16)

Expansion of the Alfa Laval Test & Training Centre for LNG and Other Fuels will Drive Environmental and Energy Solutions

FEED Contract Signed within Framework of the Heydar Aliyev Refinery Reconstruction Project

South Korea Continues Push to Become Northeast Asian Oil Hub, Despite Delays

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.

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

· Ghana to start building China funded $1.5 Billion Coal-fired Power Plant in 2017

· 500 MW Expansion for Ekibastuz-2 Power Station in Ekibastuz, Kazakhstan

· Orascom proposes Ultrasupercritical Hamarawein Port Power Station in Egypt

· Shenhua Group completes upgrades to Coal-fired Power Plants in the Beijing-Tianjin-Hebei Region

· Asian Development Bank providing $900 Million Loan to Pakistan for Coal-fired Power Plant at Jamshoro

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.