Increased investments in the exploration and production of conventional and non-conventional oil and gas reserves is propelling the adoption of pumps around the world.
This is according to a recent analysis from Frost & Sullivan, which projected market revenue to reach more than $14bn in 2020, after posting earnings of over $10bn in 2013.
Accoridng to the report, which came out in June, in the five years to 2015, the pump and compressor manufacturing industry has benefited significantly from renewed activity in downstream industries that employ pumps and compressors, including chemical manufacturing, gas extraction operations and water treatment and irrigation systems construction.
The industry has also been boosted by rapid economic development in emerging markets, which has driven the purchase of high-quality, durable pumps and compressors from manufacturers based in the US.
In the coming years, projections of stabilising growth in emerging economies and an appreciating dollar are likely to work in tandem to depress demand for US pumps and compressors in global markets. This could drive growth in Middle Eastern and Asian manufacturers.
“Increasing awareness on the economical and functional advantages of PD pumps is prompting customers to slowly but steadily shift away from centrifugal pumps,” said Frost & Sullivan Industrial Automation and Process Control Research Analyst Sakthi Sobana Pandian.
“PD pumps will prove indispensable in various applications such as hydraulic fracturing, the mixing and injecting of chemicals, and the mixing of solid proppants with water.”
“The need for water and wastewater management during the extraction of gas and oil from shale has added to the demand for pumps. However, as environmental concerns threaten market growth, efficient pumps are gaining importance,” the report said.
Aesseal, which specialises in the design and manufacturing of mechanical seals and support systems, told Oil & Gas Middle East it is planning regional expansion in response to growing customer demand.
“We are planning to expand our installation base and seal population in the region through strategic projects, and driving our zero emission valve upgrades in meeting statutory and legal requirements regarding fugitive emissions,” said Suvish Viswanadhan, regional manager at Aesseal.
With the fall of the oil price, refinery closures in North America and Europe have had a negative impact on pumps sales.
However, in the Middle East and Asia-Pacific, buoyant downstream sectors are opening up new opportunities for pump manufacturers. In addition, the focus is shifting from developed regions to the developing world, the survey said.
“The fall in price has definitely affected the oil and gas industry. Our customers are attempting to reduce the operations and maintenance costs by up to 60%. However, the oil price drop has not really affected our business as we always offer ‘value of money’ products, services and solutions with the best in the industry turnaround time,” Viswanadhan added.
Taking a central position in the region’s market, product development and innovation is often driven by project specifications and industry requirements.
“More than product development, it is about serving the end-users with the right solution. Depending on the customer requirements we develop products and sealing solutions to solve the problems and improve the reliability of mechanical seals and equipment,” Viswanadhan said. He also noted that Aesseal reinvests over 7% of its annual sales revenue in R&D.
In the sub-$60 oil price environment, operators are increasingly looking at ways to optimise efficiency and minimise cost, which is giving rise to demand for high performance tools.
Further to that, rising midstream investments in pipelines, railcars and trucks in the Middle East and Asia-Pacific are expected to add to the market potential and boost competition among manufacturers and suppliers.
“Challenges are bound to be there if you have to survive in such a competitive market. For us, competition is an enabler to improve and create UPS for our clients. We think a price war is imminent so cutting cost across the value chain is essential to move ahead of our competitors,” said D. Surendranath, managing director of Tran-Asia Pipeline Services.
“Our excellent track record on quality, safety and timely delivery enables us to have an edge over some of the larger competitors. Our goals are set and we use all of our strength to ensure that we compete, collaborate, supplement and complement each other in the market.”
“We have been awarded a project in Saudi Arabia which has extremely challenging timelines for completion. We mobilised our resources in a record time, our engineering team supported the existing EPC contractor to advance the activities. In a record time we were executing and completing the project milestones of the pre-commissioning of the first phase of pipelines for the Shaybah NGL Plant.” Construction of the 636 km pipeline is one in a number of projects planned to help meet rising domestic energy demand in the Kingdom.
