Valves are an integral piece of any oil and gas operation. Leaking valves can hamper production, while an effective system of valves and actuators can keep a refinery running smoothly during maintenance.
Therefore the quality of the valves and the maintenance provided to them is paramount to a well oiled operation. As with all crucial sectors, the valves market is also an extremely lucrative one.
The Middle East makes for an ideal location for valve and actuator companies to be working in. Emerson is one such firm which works globally, but finds the Middle East to be an extremely important market.
“The Middle East continues to develop for us and is an important source of growth. We are investing in infrastructure to better serve our customers and the equipment they have installed.
We have manufacturing facilities in both Dubai and Jubail and are expanding in these locations in terms of both capacity and capability,” says Mike Rauber, vice president of Fisher Valves and Valve Automation, Emerson Process Management Middle East & Africa.
“We also have service centres across the region and continue to expand our footprint so that we have a presence in close proximity to our customer’s facilities. Although service and support facilities are important, people make the difference to our customers and we and our local business partners have therefore invested in service personnel,” he adds.
The firm uses a network of local people and facilities to offer its global products, underlining the need for a regional presence in the Middle East, which can be something of a unique market.
Such is the strength of the market right now, that some local firms are looking to use their capital to branch out globally. Wael Lotfy, marketing coordinator at Delta Doha, a Qatar-based equipment design, oilfield engineering and manufacturing firm, explains that his firm generates 95% of its revenue from the Middle East currently but is “trying to target Russia and the USA in the close future”.
There is good reason for these firms to be hopeful when looking to the future. Despite the economic troubles suffered around the globe, the valves market is still performing well.
“On a global basis, we have seen a strong recovery after the downturn in 2009/10,” comments Emerson’s Rauber.
“In the Middle East, our business suffered much less while the world’s economy was slowing down. Middle Eastern countries continue to make capital investments and we see growing demand in the region, especially in oil and gas, but also in the chemical, refining, and power industries.
In addition we have seen a disproportionately large upturn in smaller orders, as well as our spare parts and repair services business, as valves in the growing installed base need repair or replacement.”
Some of the more fruitful markets for firms in this region are Saudi Arabia, the United Arab Emirates, and Qatar, although there are emerging countries such as Iraq which are performing well.Delta Doha also lists Kuwait, Iran, Egypt and Syria as some of the other countries dominating its revenue stream.
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Added to this will be countries such as Libya, which is currently looking to get as much production back online as possible following the civil war which hit the energy sector hard.
One company which has experience working in Libya is Merla Wellhead Solutions.
Both Libya’s Waha Oil Company and Sirte Oil Company installed a large amount of Merla Valves (1500 and 800 respectively) over 30 years ago. Even in the harsh desert conditions, the valves have stood up the test of time only needing regular maintenance.
“There are a number of aspects that make the chokes so reliable. For one, you can perform maintenance in-line, meaning that you don’t need to remove the valve body form the line,” explains Maurice Salsa chief operating officer of Merla Wellhead Solutions.
Another country which is rebuilding following war is Iraq. Although it has been for a lot longer than Libya, opportunities are still available in the country. Companies in the valves markets have wasted no time in getting a foothold there through local investment.
“We see enormous potential in Iraq and are delighted that we have been having good success in winning several brownfield upgrade projects. We have invested in the largest support facility of any automation vendor in the country, and have employed people in Iraq to support our customers,” reveals Rauber.
“These people are experienced Iraqi nationals who have also gone through rigorous training in our global facilities. Our customers tell us that they feel assured by the fact that we have local support available. We will continue to expand our local capability in Iraq as fast as we can find the right personnel to recruit. In addition, our local partners in Iraq offer another layer of support,” he adds.
Emerson has used its local personnel and support infrastructure in order to pursue major Iraq projects with the major IOCs which have signed deals with the Iraqi oil ministry to develop the oil and gas fields in Iraq.
Delta Doha, meanwhile, has won projects in Iraq and has looked to increase its presence in the region through participating in exhibitions in the country, of which there are many.
One of the key factors, as in all industries is the quality of valves on offer. And in the Middle East this is important for more than one reason.
“Our clients are currently looking to find every drop of performance in their assets no matter how big or small their operation is. By investing in technologies like gas lift or digital automation, we are delivering ways to optimise production and reduce costs,” says Salsa.
A major trend in the Middle East is the production of increasingly sour oil and gas. The danger here for valve firms is that their products are not suited to handle H2S rich content.
“We saw this trend start several years ago, and we invested heavily to meet the market demand. We have been supplying control valves in applications with H2S for decades.
However, the high H2S content we are now encountering in the Middle East is higher than we have seen elsewhere, and this adds significant complexity to control valve manufacturing requirements,” explains Rauber.
Emerson has responded to this by developing its supply base to accommodate the special metallurgy requirements that high H2S brings, with high-nickel alloys like Inconel, duplex stainless steels, or cladding.
The pumps sector in the Middle East has a number of challenges facing it, not least the aforementioned issues with sour oil and gas. But despite this the sector is performing very strongly, and with the worst of the economic crisis seemingly behind it, firms in the industry are now looking to push on throughout the year.
“2012 is a very strong year for us; we expect our Middle East business to increase by 25% over what we saw last year,” concludes Rauber.
