Evaluating LTCO Improves the Selection Process for scrubbers, adsorbers and
all the Components
High performance (HP) flow control and treatment equipment tends to be purchased
and sold using the same process as general purpose equipment. Price and delivery
are prioritized. Evaluation of the lowest total cost of ownership (LTCO) is not
elevated to the highest priority. This failure permeates the industry even to
the point that bonuses are paid on performance in the past year rather than the
past 10 years. The company which buys the lowest priced HP products does better
this year but over time it will be a costly choice. The company which sells the
lowest priced HP product can book profits in the current year but subsequent
expenses and loss of reputation will affect future profits.
This condition needs to be corrected. The first step is to identify the high
performance products which need to be evaluated separately. There are three main
criteria:
• Severe service
• Critical service
• Unique Service
Severe service: Corrosion, pressure, temperature, process operating fluctuations
are all conditions which qualify an application as severe service. The contract
would be between a scrubber on the kiln and one just capturing nuisance dust
from a transfer point.
Critical service: Safety, product purity, continuous operation, and product
toxicity are criteria of critical service. Many scrubbers and absorbers are used
in the manufacture of products where performance directly affects product
quality.
Unique Service: The distinction is often made between an engineered product
versus an off the shelf or standard product. In any case, the decision making
for unique service products needs to be made with prioritization of the LTCO.
Many scrubbers are engineered for specific service. There are also large numbers
of standard off the shelf scrubbers sold for odor and acid gas control
McIlvaine Company is facilitating this identification of high performance needs
by revising its market report on scrubbers/adsorbers to segment the high
performance and general purpose opportunities. For each industry high
performance needs are further segmented by use e.g. air or water intakes,
cooling, stack gas or wastewater treatment, and process. Process, in turn, is
segmented by function e.g. evaporation, reaction, mixing, size separation, etc.
This segmentation has been completed for pumps and valves. Now the 50,000
forecasts by product, industry, country and year can be further segmented by
high performance or general purpose.
The second step is to make the LTCO evaluation process less costly and more
accurate. It is easy to select the lowest price or most widely used product.
There is no easy way to evaluate the LTCO for each option. Purchasers often hire
consultants to help them evaluate the LTCO. The problem is that with the world’s
information doubling every few years, it becomes increasingly difficult to take
advantage of the knowledge at reasonable cost.
One approach taken by Arcelor Mittal has been to emphasize global purchasing.
Most of its 200 mines and steel plants have the same high performance needs.
Recently, it purchased dust collection systems with one purchase order for
plants in Europe and South America. The LTCO evaluation cost per system was
greatly reduced.
For more information on Scrubber/Adsorber World Markets click on: N008 Scrubber/Adsorber/Biofilter
World Markets
Increasing Flow Control and Treatment Product Gross Margins
The best way to raise prices without losing business is to provide a product
which justifies a higher initial price. To accomplish this you need to:
• Develop a superior product
• Convince the customer as to the value
Develop a Superior Product
McIlvaine is currently preparing a Decision Guide on choke valves for oil and
gas applications. These are tough applications and require custom valves
designed for severe service. This is only part of the story according to George
Gorman of the Valve Institute. The success or failure of a valve rests not only
on the valve merits but on how it is applied. Subsea pipeline valve needs are
different from sub-sea Christmas tree needs. Both are certainly different from
the needs at the surface or on shore. The best valve choice requires detailed
knowledge of the unit operations. When it comes to subsea valves his Institute
is dedicated to providing insights on best choices with separate training
courses on subsea pipeline and Christmas tree valves.
But what are the needs of the long-time valve practitioner? Does he need an even
more robust system? Input from a number of both supplier and end user experts in
the McIlvaine Insights discussions leads to the conclusion that considerable
analysis and discussion is needed. Muktiadi Rahardjo of Shell is the valve and
sealing specialist at the Shell Pernis refinery and, based on this experience,
recommends better communication relative to valve issues. He cited a lack of
application knowledge on the part of some vendors and the inability to utilize
the wisdom existing within the end user community.
If you rank the impact of a product on the process, the valve is at the bottom
of the rankings. The product using the valve, e.g. a pump system, will be more
important by virtue of the fact that it typically would include a pump and at
least three valves. The scrubber company product which includes the valves,
pumps, fans, nozzles and scrubbing tower is obviously of most impact on the
process. So, if we agree that process knowledge is necessary to provide the best
valves, then it follows that even more process knowledge is needed for suppliers
of the sub processes What can we conclude from all of this?
• IN ORDER TO DEVELOP A SUPERIOR PRODUCT YOU HAVE TO UNDERSTAND THE PROCESS
WHERE THE PRODUCT WILL BE APPLIED.
• TO CONTINUE TO PROVIDE THE SUPERIOR PRODUCT YOU HAVE TO KEEP UP WITH PROCESS
CHANGES AND NEW REGULATORY AND OTHER CUSTOMER NEEDS.
• FOCUS YOUR PRODUCT DEVELOPMENT EFFORTS BY PRIORITIZING CUSTOMER NEEDS IN SUCH
A WAY TO MAXIMIZE MARGINS AND PROFITABILITY.
Convince the customer that you have the best product
The best product is defined here as the product with the lowest total cost of
ownership. This definition is couched in the broadest terms. It has to take into
account the severity of the service but also the criticality. A peaking gas
turbine which cycles a few times per year and can be easily accessed for
maintenance is in a non-critical application compared to the base-loaded turbine
which is in operation 24/7 and cycles hundreds of times per year.
It is easy to pick the lowest cost product but much more difficult when you have
to assess the lifetime cost based on both severity and criticality. The first
step in creating a convincing program is to understand how decisions will be and
could be made.
• Decision making is a series of classifications. Whether it is the initial
bidders list, the criteria in the specifications or the ultimate selection the
decision maker is moving from one set of classifications to the next.
• The elements of the classifications are: what, which, why and how. In order to
be successful you have to convince some people of just the “what” and “which”
and others you also need to add the “why.” The “how” is the big challenge which
provides credibility to the other elements.
o What are the classifications? If you are going to remove SO2, should you
consider wet limestone, wet lime, dry sorbent injection, spray driers, or
seawater scrubbing?
o Which of the classifications are best?
o Why is one the best choice?
o How does the product perform uniquely enough to justify the prediction that it
will result in the lowest total cost of ownership?
• The what, which and why can be communicated through normal sales channels. The
decision guides add clarity. The problem is that the credibility depends on the
“how.” It is a lot easier to claim the highest efficiency or lowest maintenance
cycle than it is to prove it.
McIlvaine recognizes the challenge of convincing customers that a product has
the lowest total cost of ownership and has a whole program to address it: 4 Lane
Knowledge Bridge to the End User
Daily Project Posting in McIlvaine Oil, Gas, Refining Supplier Program
OIL/GAS/SHALE/REFINING E-Alert
May 2016 – No. 2
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.
PROJECTS
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.
Amec Foster Wheeler to Undertake BED Study for $4-$5 Bln Cilacap Refinery
Upgrade Project (08, T20)
Revision Date: 5/26/2016
Tags: 324110 - Petroleum Refineries 石油精炼, Amec Foster Wheeler, Pertamina, Saudi
Aramco, Refining, Engineering, Study, Design, Upgrade, Production Capacity,
Indonesia
________________________________________
Chinese Investors to Build Industrial City in Oman (08, T20)
Revision Date: 5/26/2016
Tags: 324110 - Petroleum Refineries 石油精炼, 325110 - Petrochemical Manufacturing
石化产品生产, Industrial, Investment, Production Capacity, Refining, Construction,
Oman
________________________________________
Abu Dhabi Said to Delay Building Fujairah LNG-Import Plant
Revision Date: 5/19/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Emirates LNG
LLC, Mubadala Petroleum, International Petroleum Investment Co, Onshore, Joint
Venture, Import, Regasification, Storage, Delays, UAE
________________________________________
Novatek Still Working on Gydan Peninsula Arctic LNG Plan
Revision Date: 5/19/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Novatek,
Project, Liquefaction, Feasibility Study, Development, Russia
________________________________________
FMC Technologies and Technip to Combine: Driving Change by Redefining the
Production and Transformation of Oil and Gas
Revision Date: 5/19/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, FMC
Technologies, Technip, Subsea, Onshore, Offshore, Technology, Innovation,
Solutions, MoU, Services, Integration, Production, Manufacture, Transaction,
Growth, Cost Reduction, Merger, USA, France, UK
________________________________________
Jacobs Wins General Engineering Services Contract for SATORP in Saudi Arabia
Revision Date: 5/19/2016
Tags: 325110 - Petrochemical Manufacturing 石化产品生产, 324110 - Petroleum Refineries
石油精炼, Jacobs Engineering, SATORP, Refining, Engineering, Design, Feasibility
Studies, Saudi Arabia
________________________________________
Wintershall Awards Halliburton Service Contract for Maria Project (T16)
Revision Date: 5/19/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Wintershall,
Halliburton Norge, Tools, Subsea Template, Wells, Exploration, Cementing,
Engineering, Development, Drilling, Norway
________________________________________
Jacobs Wins Contract with Mitsubishi for $100 Mln Expansion of South Carolina
Plant (07, T16)
Revision Date: 5/19/2016
Tags: 325110 - Petrochemical Manufacturing 石化产品生产, Mitsubishi Plastics,
Mitsubishi Polyester Film, Jacobs Engineering, Production Lines, Technology,
Engineering, Installation, Operational Efficiency, Expansion, USA
________________________________________
Cenovus Considering Diluent Recovery Unit at Alberta Rail Terminal
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Cenovus
Energy, Diluent Recovery Units, Rail Terminal, Shipping, Production, Permitting,
Construction, Growth, Canada
________________________________________
China's First Private-led $15 Bln Mega-refinery Planned off East Coast (08, T18)
Revision Date: 5/18/2016
Tags: 324110 - Petroleum Refineries 石油精炼, 325110 - Petrochemical Manufacturing
石化产品生产, Zhejiang Rongsheng Holding Group, Huanqui Contracting and Engineering
Corp, Luoyang Petrochemical Engineering Corp, Construction, Design, Refining,
Environmental Approval, China
________________________________________
NextDecade Files FERC App for Rio Grande LNG, Rio Bravo Pipeline (T18)
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, NextDecade
LLC, FERC, Pipeline System, Liquefaction, Export, Application, Site Evaluation,
Construction, Operations, Pipeline, Investment Decision, USA
________________________________________
Nine Gas Transport Offers for Interconnector Greek-Bulgarian Pipeline (T16)
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, DEPA,
Bulgaria Energy Holding (BEH), Pipeline, Joint Venture, Investment Decision,
Bidding, Interconnection, Pipeline, Construction, Greece, Bulgaria
________________________________________
Transnet Interested in $25 Bln Investment in African Pipeline, Port Projects
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Transnet,
Pipeline, Modernize, Pipeline, Expansion, Investment, Nigeria, Kenya, Uganda,
Tanzania
________________________________________
Idemitsu, AltaGas Suspend Triton LNG Project in Canada
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, AltaGas,
Idemitsu Kosan, Joint Venture, Liquefaction, Suspension, Canada
________________________________________
France Studying Possible Ban on Import of U.S. Shale Gas
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Engie, EDF,
Hydraulic Fracturing, Import, Ban, Environmental Impact, France
________________________________________
EPA Issues Final Rules Cutting Oil, Natural Gas Methane Emissions
Revision Date: 5/18/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, EPA, Wells,
Greenhouse Gas, Regulation, Technology, Drilling, Emissions Reduction, Methane
Emissions Compliance, Monitoring, Inspection, USA
________________________________________
China Enviro Protests Force Halt to Studies for Industrial Park Project
Revision Date: 5/17/2016
Tags: 325110 - Petrochemical Manufacturing 石化产品生产, Singapore Jurong
International Holdings, Nanshan Group, Environmental Standards, Health,
Feasibility Study, Cancellation, Environmental Impact, China
________________________________________
China Firm Wins $620 Mln Contract to Build Cambodia's First Oil Refinery (06,
T16)
Revision Date: 5/17/2016
Tags: 324110 - Petroleum Refineries 石油精炼, China National Petroleum Corporation,
Northeast Refining and Chemical Engineering Co, Cambodian Petrochemical,
Engineering, Construction, Cambodia
________________________________________
America's Newest Refinery in North Dakota Falls Victim to Oil Price Slump
Revision Date: 5/17/2016
Tags: 324110 - Petroleum Refineries 石油精炼, MDU Resources, Calumet Specialty
Products, Review, Demand, Refining, Slowdown, USA
________________________________________
Saudi's SABIC Eyes U.S. Shale as Top Gas Source for Petrochemicals
Revision Date: 5/17/2016
Tags: 325110 - Petrochemical Manufacturing 石化产品生产, 211111 - Crude Petroleum and
Natural Gas Extraction 原油和天然气开采, SABIC, Industrial, Growth, Oil-to-chemicals,
Coal to Chemical, UK
________________________________________
Saudi Aramco Extends Bid Date for Clean Fuels Project
Revision Date: 5/17/2016
Tags: 324110 - Petroleum Refineries 石油精炼, Saudi Aramco, Naphtha Hydrotreater,
Environmental Standards, Sulfur Removal, Refining, Bidding, Upgrade,
Hydrotreating, Saudi Arabia
________________________________________
Oil Sands Fared Well Through Canada Fire, but Restart a Challenge
Revision Date: 5/16/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, Suncor
Energy, Canadian Natural Resources, Syncrude, ConocoPhillips, CNOOC, Equipment,
Restart, Production, Steam Assisted Gravity Drainage, Shutdown, Canada
________________________________________
EagleClaw Midstream Commissions Toyah I Cryogenic Processing Plant, Toyah II
Plant Is Underway
Revision Date: 5/16/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, EagleClaw
Midstream Ventures, Honeywell UOP, Pipeline, Gas Processing, Pipeline, Gas
Gathering, Cryogenic, Compression, USA
________________________________________
Bechtel’s ThruPlus® Delayed Coking Technology Selected for Egyptian Refinery
Revision Date: 5/16/2016
Tags: 324110 - Petroleum Refineries 石油精炼, Bechtel, Egyptian General Petroleum
Corp, Delayed Coking Unit, Design, Delayed Coking Process, Upgrade, Refining,
Egypt
________________________________________
Oil Refiners, Gas Producers Face Higher Costs from Climate Laws
Revision Date: 5/16/2016
Tags: 211111 - Crude Petroleum and Natural Gas Extraction 原油和天然气开采, 324110 -
Petroleum Refineries 石油精炼, Investment Leaders Group, Cost, Utilities, Refining,
Gas Processing, Production, Emissions Reduction, Carbon Pricing, UK, Spain,
Germany, Canada, USA
________________________________________
ExxonMobil to Expand Australia’s Altona Refinery to Supply More Diesel, Jet Fuel
(T16)
Revision Date: 5/16/2016
Tags: 324110 - Petroleum Refineries 石油精炼, ExxonMobil Australia, Refining, Energy
Efficiency, Production Capacity, Australia
________________________________________
Owner of Moroccan Refiner Samir Pledges to Inject $680 Mln to Reverse
Liquidation
Revision Date: 5/16/2016
Tags: 324110 - Petroleum Refineries 石油精炼, Corral Petroleum Holdings AB, Samir,
Financial, Shutdown, Financing, Refining, Morocco
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.
Evoqua supplying Carbon adsorbers for Sohar Refinery
Evoqua has been chosen to provide carbon adsorption equipment for the $2.1
billion Sohar Refinery Improvement Project (SRIP) in Sohar Port, Liwa, Sultanate
of Oman.
Scheduled for commissioning in late 2016, the SRIP project will add five new
units to the Sohar refinery, improving its production volume, environmental
performance and ability to process heavier Omani crude oil. Evoqua will provide
the equipment to an energy contractor of the EPC directing the project for Orpic,
the owner of the refinery.
Evoqua has been asked to provide Vent-Scrub® Vapor Phase carbon adsorption
systems. The systems will be used for removing hydrogen sulfide, mercaptans and
other sour gases created as byproducts of the refining process.
The contract includes eight Vent-Scrub VSC-200 units, four VSC-2000 units, and
two VSC-8000 units, to be manufactured at Evoqua's facility in Red Bluff, CA and
distributed through Evoqua’s Singapore operations. In addition, Evoqua will
supply nearly 15 tons of its sustainable VOCarb 48C coconut shell-based granular
activated carbon (GAC). The granular shape of this GAC maximizes its geometric
surface area, significantly increasing its ability to adsorb VOC’s.
Absorption at AWWA
There were a number of papers and exhibits devoted to water and wastewater gas
phase treatment at AWWA held last week in Chicago. However, since the odor
control problems are primarily in wastewater and the AWWA focus is drinking
water, the primary focus was carbon to remove taste and other contaminants from
the water phase. Granular activated carbon has been determined to be one of the
best ways to remove PFOA.
PFC Type and % Removal Efficiency
Treatment Option PFNA PFOA PFOS
Activated Carbon >90 >90 >90
Membrane Filtration >90 >90 >90
Anion Exchange >67 10-90 >90
Advanced oxidation <10 <10 <10-50
Evoqua was displaying the full range of odor control treatment solutions from
both the water and gas phases.
Odor Control Solutions Description
Liquid Phase Odor Control Solutions
Prevent and remove hydrogen sulfide at the source, protecting the system from
harmful odors and corrosion.
ZABOCS® Biological Odor Control Systems
Capture and eliminate odors from wastewater process air streams at 3x the volume
of conventional systems.
ZABOCS® Bio-Trickling Filter (BTF) Systems
Deliver optimal odor control performance with over 99% H2S removal without
chemicals.
WHISPER™ Biofilter Rental Systems
Reduce capital costs and achieve 99% H2S removal with quiet operation for
residential locations.
LO/PRO® Wet Scrubber Systems
Target a range of compounds in a single system with a low profile design and
compact footprint.
RJ-2000 Emergency Chlorine Scrubber Systems
Protect systems from accidental leaks of toxic gas, such as chlorine and sulfur
dioxide.
Carbon Adsorption Tower Systems
Reduce low to moderate odor levels with carbon systems.
-------
You can register for our free McIlvaine Newsletters at:
http://www.mcilvainecompany.com/brochures/Free_Newsletter_Registration_Form.htm.
Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com