Sealing solutions might be perceived to be a lesser operational aspect of the oil and gas industry, but it is far from it. The global upstream industry encounters the natural menaces of corrosion and high temperature environments, as a result of which, operators frequently face the expensive proposition of having to replace the flanges in a pipeline or a drilling equipment, or the damaged asset as a whole. Gaskets are quite often the panacea, as the ring-like structures help in clamping disjoined assets together and form part of sealing solutions, which eventually help operators save considerable sums of money, otherwise meant for maintenance and repair.
“For every process industry, you need to perform maintenance. You need to be able to open the pipe and vessel for inspection and repair,” Benoît Labre, the managing director of the Middle East business of Flexitallic, told me during my recent visit to the sealing products and services manufacturing company’s facility in the northern emirate of Ras Al Khaimah (RAK).
“To connect two pipes together while preventing any leakage, you will need gaskets. The gaskets will be compressed between the flanges, the pipe system, or also in the pressure vessel for the heat exchanger. The advantage of gaskets in comparison to the welding process is that you can open the system without having to touch the integrity of the asset,” he tells Oil & Gas Middle East.
The Texas-headquartered company, which has important bases in the UK and France, has been providing gaskets to a range of industries “Firstly, we work with the oil and gas industry, which is our biggest revenue generator, especially here in the region. Oil and gas is our main market; we work with all three of its segments – upstream, midstream, and downstream,” says Labre, a Frenchman who has been mandated with spearheading the growth of Flexitallic in the region.
“We work also with the processing industries, including petrochemicals; chemicals; specialities; and power generation, including conventional and nuclear – not yet here in the region, but worldwide in France and the US. Worldwide we are one of the main sealing providers to the nuclear industry. We also work with the automotive, oilfield services, and OEM (valves, pressure vessels, pumps, heat exchangers, etc.). We, recently, started to focus on the high technologies industries such as solid oxide fuel cells.”
Flexitallic might be a relatively lesser known name in the oil and gas industry, although, quite astonishingly, the company has been making industrial gaskets for over a century! “It is a very old company because we can trace back the company to 1912 when it was formed in New Jersey, US to invent the spiral-wound gasket designed to seal high-pressure systems. These gaskets are now the building block for all refineries, petrochemical plants, and power generation stations,” Labre says.
For a company whose core business is to deal with the oil and gas industry, setting foot in the Gulf was inevitable. “One of our main strategies was to get closer to the customer (in the region). You cannot serve the customer if you are 10,000 kilometres away. So that’s why we tried to get here to have an extensive access of the local market,” Labre says.
He continues, “In the GCC, the story dates back to 2008, when Novus Sealing, which already had a branch in the UK, was set up in the Middle East, when we realised the importance of the GCC. Novus was later acquired by Flexitallic and Novus Middle East became Flexitallic LLC.”
Flexitallic today boasts of being present in nine locations around the world — Britain, the US, France, Canada, Germany, China, Singapore, Kazakhstan, and the UAE, and employs about 1,200 people globally. The regional company, Flexitallic LLC, which was formed in April 2013 as a result of the acquisition of Novus, this year invested a whopping $4 million in a new manufacturing unit in RAK, which employs about 25 staff members. On being asked about why Ras Al Khaimah, of all industrial locations in the UAE, was chosen as the ground for planting Flexitallic’s flag in the Middle East, Labre explains, “We formally opened in the beginning of 2009, although the decision was taken in 2008. The main reason was the cost, which was competitive compared to other locations, while still providing excellent infrastructure and services.”
Products fuelled by innovation
During our detailed discussion, Labre, in his elementary French suaveness describes Flexitallic as “a company that has been found on the back of innovation”. He says, “I think it’s very important to have extensive R&D (research & development) facilities; we have it in conjunction with Flexitallic in the UK and the US. We have got several application engineers, who are in direct contact with the customer. So they know all the problems typically faced by the customer.
“However, I like to define our company, not only as a gasket provider — because that’s where we get our revenues from — but also as a sealing or tightness provider. The tightness is the result of the gasket’s performance, in conjunction with the hardware and correct installation procedures. We, at Flexitallic, are able to provide installations advices on hardware such as flanges and bolts.”
For the upstream industry, Flexitallic primarily supplies ring joint gaskets — which are solid and metallic, as well as spiral wound gaskets, which Labre claims, Flexitallic is the inventor of. Flexitallic’s focus vis-à-vis the upstream sector is to address the issue of corrosion. “We have developed specific gaskets to mitigate corrosion effects, providing both reactive and preventive maintenance solution,” Labre mentions.
The dignified business leader goes onto elaborate on a few iconic sealing products that Flexitallic has developed — innovations that have become the hallmark of the company. “The first product that we have developed is the flange rescue gasket (FRG) – something that we originally designed for the North Sea oil industry, the offshore sector. It enables bolted joints to be easily and effectively sealed even when severe flange face corrosion can be found. This saves time, reduces lost production, and provides a major cost saving when compared with replacing flanges, welding, and machining.”
He continues, “The second one that we had been working on for the last few years and was recently launched is the Corriculite. Most of the spiral wound gaskets, used in the upstream industry, contain graphite. The problem of graphite is that it has high electrochemical potential. It can corrode the flange in the presence of an electrolyte such as water or wet gas.
“The Corriculite has been developed in order to provide a tight seal, which is even better than what graphite offers, and provide fire-safe solutions and prevent any corrosion that can be faced with graphite.”
One of the company’s other offering, Thermiculite, can be used in high temperatures of up to 1000°C; a product that Labre describes as “a revolution that we brought to the market”. The product can and is being used in all sorts of high-temperature environments and process industries such as in petrochemical plants, refineries and power generation stations.
Labre says, “The Change™ metal wound Heat Exchanger Gasket is our latest innovation, also called dynamic recovery gasket (DRG). It is a gasket mainly designed for high technologies. It’s a proprietary product designed to re-invent the concept of the spiral wound gaskets. It addresses leaking issues in heat exchanger problems.
“We also equally focus on the high pressure aspect, as we are aware that the upstream industry has to deal with issues related to it. For high pressure, the industry uses ring-type joint gaskets. However being fully metallic gaskets, it is prone to damage. So we provide solutions such as Kamm-orj or Carrier ring, that can accommodate the flange damages, avoiding flange replacement.”
The expansion campaign
Flexitallic has been working with global oil and gas majors such as Total, Shell, Maersk Oil Qatar, Valero in the US, and oilfield services provider OEM. Regionally, the ISO 9001 and 14001, and OHSAS 18001-certified company — the first manufacturer in the Middle East to get the safety accreditation — works with NOCs such as ADCO, GASCO and ZADCO of the ADNOC Group, Saudi Aramco, Qatar Petroleum, and Petroleum Development Oman (PDO) to name a few.
The company has also worked with a number of EPC contractors in the region, the likes of Technip and Petrofac to name a few, more importantly on projects such as the Zakum Oil Line replacement project in Abu Dhabi, Salalah gas field development project, the West Qurna project in Iraq, and the Sohar refinery project in Oman.
In Flexitallic’s experience, most oil and gas companies, like ADNOC, prefer to deal with distribution partners over the actual suppliers, so the company maintains a network of 750 distributors in 30 countries.
Labre concedes that, much like every other company associated with the oil and gas industry, the year 2016 hasn’t been kind to Flexitallic. The company, which earns an average annual turnover of $180-200 million globally, has secured lower than average revenues this year due to subdued demand for its products, although Labre says, the company definitely fared better in the third quarter of 2016 compared to the first two quarters.
“We have definitely seen a reduction in investments, there are less projects in the market, there have been delays or shutdowns in the market as well,” Labre admits. “There is still demand, people want to reduce prices but they don’t want to compromise on the quality. So that’s where we are focussing on — providing the same quality products that we did before. We don’t want to compromise on it while optimising the prices,” he says.
Flexitallic has been able to establish its regional client base post setting up the base in RAK. “In the Middle East,” Labre states, “our main market is in the UAE – Abu Dhabi, Dubai, and the Northern Emirates. Our next big markets are Oman and Qatar. The next goal is to expand in Saudi Arabia, Bahrain, and Kuwait.
“Iran also presents a great opportunity for us. There is some progress, and we are trying to make inroads into the country. We conduct some of our business in Iraq as well despite the current (security) situation.”
As for the company’s expansion strategy, Labre says, “Our objective is to maintain close contact with the end-user, and to do so, we need to be geographically present in places where our end-user is. That’s why the company is expanding in key geographical locations such as the UAE, or in Germany recently. Our next step would be to open some service centres in Oman, Qatar, and Kuwait to expand our local geographical coverage and responsiveness to customer needs.”
Labre, the charmingly humble executive, wants to tackle competition in the market by adhering to the company’s core ethics and quality, and feels Flexitallic has the edge over its peers as being a holistic sealing solutions provider over others who are just gasket suppliers. “My goal is to make the customer see us very different from the competitor, not only as a gasket but also a sealing provider. Something which our competitors don’t do. That’s really what we aim for — to differentiate from the others with services and specific solutions to answer the toughest industries issues.”
