Presentation on theme: "Present by: Rajeev Chowdhry"— Presentation transcript:
1Indigenization of Spare Parts and Consumables used in the Petrochemical Industries Present by: Rajeev ChowdhryManaging Partner – Alpha International Management Consultants28th December 2009
2PETROCHEMICAL INDUSTRY - SAUDI ARABIA An overview of the Oil and Gas and Petrochemicals IndustryProducts – Classified into various CategoriesProcess Flows for Oil & GasCapital Equipment and their typesSpares and ConsumablesObservation and Inferences
3Petrochemical Industry in Saudi Arabia: A Snapshot Hydrocarbons are the backbone of the Saudi economyThe single largest sector of Saudi Arabia’s economy is the extraction of crude oil and natural gas (hydrocarbons), which accounted for 27 percent of real GDP in Petrochemicals provided 9 percent of GDP last year, up from 7 percent a decade ago.The dominance of the hydrocarbons sector extends well beyond its direct contribution to economic output: hydrocarbons account for around 90 percent of export earnings, and thereby provides the main source of revenue for the public sector.The petrochemicals sector offers one of the most promising long term investment opportunities towards economic diversification in Saudi Arabia.
4Petrochemical Industry in Saudi Arabia: A Snapshot
5Petrochemical Industry in Saudi Arabia: A Snapshot The Product ChainRaw Material and FeedstockCrude Oil, Natural Gas, Methane, Ethane, Propane, Butane, NaphthaBasic PetrochemicalsEthylene, Propylene, Butadiene, Benzene, Toluene, Xylene, AmoniaEnd ProductsPlastics, Coolants, Cosmetics, Pharmaceuticals, Fertilizers, Packaging, Fibers, Paper, Textiles, Lubricants…Intermediates & DerivativesMTBE, Methanol, Vinyl Chloride Monomer, Mono Ethylene Glycol, Polyethylene, Polypropylene etc
6Petrochemical Industry in Saudi Arabia: A Snapshot Basic flow Chart for Oil ProductionRefineries can range from simple topping plants with only a crude oil distillation tower to the more complex refinery shown in the flow sheet. CD – Crude Distillation Tower, REF – Reforming, FCC – Catalytic cracking, COK – Coking, HYT – Hydrotreating, HR – Hydrodesulfurization.
7Petrochemical Industry in Saudi Arabia: A Snapshot Basic flow Chart for Gas Processing
8Feedstock and Petrochemical products produced Butenes and Butadienes Petrochemical Industry in Saudi Arabia: A SnapshotWhat do the Petrochemical Companies produceFeedstock and Petrochemical products producedMethaneEthylenePropyleneButenes and ButadienesBenzeneTolueneXylenesHydrogenPolyethylenePolypropyleneStyrene-Butadiene rubber(SBR)StyreneBenzoic acidPhthalic anhydrideAmmoniaEthanolIsopropanolMethyl tert-Butyl Ether (MTBE)PolystyreneToluene diisocyanatePolyestersMethanolEthylene glycolPropylene glycolPolybutadienePhenolPolyurethanesDmethyl terephthalateMethyl chlorideVinyl acetateAlkyl chlorideAcrylonitrile-Butadiene-Styrene (ABS)CumeneCaprolactamTerephthalate acidCarbon blackPerchloroAcrylonitrilePolybutenesAnilineNylonsPolyethylene terephthalateAcetylenePolyvinyl acetateAcrylic acidMethyl ethyl ketone(MEK)Adipic acidPolyureasDioctylPhthalateFormaldehydeGlycol ethersEpoxy resinsTert-butanol
9Petrochemical Industry in Saudi Arabia: A Snapshot What are the main Capital Equipment – Petrochemical IndustryThe Oil and Petrochemical Industry have a huge array of equipment that it needs for processing the feedstock into various end products. We give below a list of main equipment that each of the stages need.Oil Exploration and Pre processingDrilling Rigs, Platforms, Well Head Equipment like Christmas Tree, Oil Pumping equipment, Gas Oil Separation Plants.Refining & Petrochemical ProcessingDe-salter units, Distillation Columns, Hydrotreater, Catalytic Reformers. Fluid Catalytic Cracker. Hydrocracker, Visbreaking, Merox unit, Coking units, Alkylation, Dimerization unit, Isomerization unit, Steam reforming unit, Gas treaters, Solvent refining units, Solvent dewaxing unitsALL these are high end complex Plant and Equipment designed by the Process Patent Holders and Technology Providers (OEM’s).
10Petrochemical Industry in Saudi Arabia: A Snapshot What are the main Capital Equipment – Petrochemical IndustrySpecialized Equipment and SystemsApart from the capital equipment, this Industry needs a lot of highly technical equipment and systems which are designed for the specific highly critical application by highly specialized manufacturers. We list the most important ones below:Heat ExchangersElectrical systems including Rotary Drives,Automation systems incl. Process ControllersInstrumentation Systems including GaugesHydraulic and Pneumatic Systems – both prime movers and control systemsUtility systems like Compressed AirIT based control and monitoring systemsSafety equipment & systemsPackaging, Shipment and Delivery systems incl. Automatic loading for liquids and batchloading for solids
11Petrochemical Industry in Saudi Arabia: A Snapshot What are the main Capital Equipment – Petrochemical IndustryGeneric Equipment and SystemsGeneric equipment that is used in this Industry, usually produced by local manufacturers and some of them are actually built on site.Utility units such as Cooling towers, boiler plants and Water treatment PlantsBuildings and shelters for the process equipmentTechnology Structural Steel Works both in Stainless Steel and Mild SteelFlare Stacks and ChimneysLiquid Product Storage units like Tanks, Spheres and Bullets,Solid Storage areas like silosMaterial Handling Equipment like Cranes, Stackers, Reclaimer etc.A variety of piping works including cross country piping for product transportationLighting systems for the plantFire Detection and Fire Fighting systems (for the plant)Security Systems
12Petrochemical Industry in Saudi Arabia: A Snapshot Accessories and Spares PartsThe Petrochemical Industry needs a number of equipment and spares on a regular basis. The total list is huge and so we have tried to group the most important ones as listed below:Drives and Rotary equipment like compressors, pumps, motors (both Electrical andHydraulic), Gear Boxes, actuators etc.Heat exchangersValves – safety valves, control valves etc.Instrumentation like gauges, sensors, switches etc.Electronics and Automation sparesTransformers, Circuit breakers and other Power Electrical ItemsPiping and lining materialCables of all kindsPaints, Solvents, Rust Inhibitors etc.Spare Parts for Generic EquipmentLights and other Illumination items
13Petrochemical Industry in Saudi Arabia: A Snapshot ConsumablesApart from the Mechanical and Electrical equipment there are a number of consumables that are used in this industry… once again, we try and identify a few important onesDrilling Mud, Cement and a host of other non metallic solidsCatalyst – both new and processedTubing, Linings and RefractoryChemical additives like AgitatorsPackaging MaterialLubricants for various applicationsColumn Internals like Sieves and TraysTubing for boilersMost of these items are supplied by trading companies who represent International manufacturers in KSA
14Petrochemical Industry in Saudi Arabia: A Snapshot Investment OpportunitiesThe list of possible equipment and spare parts that can be produced locally is very big and we highlight the following 10 equipment, consumables and services. These items actually find use across a broad spectrum of Industry.Fabricated Steel ProductsValvesRotary equipment like pumpsGear ReducersCatalyst and Chemical additivesDrives like Electric and Hydraulic MotorsStandard Instrumentation partsRefractory and lining materialHeat ExchangersAlloy Steel Castings and ForgingsHydraulic and Pneumatic SystemsWe shortlisted 3 out of these 10 items for a brief study
15Petrochemical Industry in Saudi Arabia: A Snapshot Investment OpportunitiesThe rational for selection of these 3 items was based on the highest demand from Saudi Aramco’s estimate on expenditure it would make for various items between 2007 to 2012
16Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 1 : Fabricated Steel ProductsThis is one of most promising industries in the Support Sector in Saudi Arabia and there is absolutely no doubt about the need for a Quality fabrication shop. Local production capacities exist on the lower quality segment and the demand and supply scenario changes drastically from year to year depending on the projects released simultaneously.The number of projects planned for 2010 – 2013, the industry will face a supply squeeze unless new quality fabrication facilities are not set up.Saudi Aramco averages nearly US $ 1.5 billion worth fabricated structures a year and estimating that this value would be approx 40% of the total demand, the market size for Structural Steel Fabricated structures would work out to almost US $ 3.7 billionIn terms of tonnage, this would amount to approx 1.5 – 1.7 Million Tons / annum
17Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 2 : ValvesValves are devices that are used to either control, regulate or contain the flow of liquids, gases, slurries, semi-solids or any other flowing material.Valves can be broadly classified as follows:Based on ApplicationActuationConstructionNo. of PortsControl ValvesHydraulic ControlThere are more than 50 types of construction like Ball type, Needle Valves, Butterfly Valves, Bibcock Valves, Leaf Type etc.Single PortPressure ValvesPneumatic ControlDouble PortSolenoid ControlThree Port – multi DirectionManual LeveredFour Port – multi DirectionElectric Motor ControlSpring LoadedThermostatic Type
18Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 2 : ValvesEach of these valves have specific applications and OEM companies specialize in different ranges of these valves. Considering the local market, we recommend the setting up of a plant for the manufacture of Pressure Valves as a first step.Pressure ValvesThe factory should produce Pressure Relief Valves for a variety of liquids and Gases and should be designed and tested as per reputed international standards like ASMELow Pressure Safety Relief ValveHigh Pressure Safety Relief ValvePilot ActuatedSafety Relief Valve
19Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 2 : ValvesManufacturing FacilityA comprehensive manufacturing facility would include a Steel and Alloy Steel foundry, a Spring Manufacturing unit, a medium sized machine shop, a valve assembly plant, necessary testing facilities and a painting area.MachiningCentreAssemblyShopTesting CentrePaintingBoothPlantOverview
20Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 2 : ValvesWith only Saudi Aramco planning to buy over US1 billion worth of valves each year, the market for valves is huge and diverse.Recommended way forward for Saudi SME Investors is to form a Joint Venture with any of the worlds leading OEM’s in this field, with an assured off-take by the OEM.
21Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 3 : PumpsPumps are devices used to move liquids, slurries and gases from one place to other.Pumps essentially have the following components:A Casing or Body, within which the fluid is moved.A drive or prime mover with or without a gear reducer.A connecting shaft with coupling that connects the pump and the driveAn impellor or ram which actually moves the fluid from the input port to the discharge portSeals and Bearing that ensure the whole assembly stays together and operates smoothly without leaksAnd finally the instrumentation and control panels
22Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 3 : PumpsTypes of Standard Pumps for common industrial usesImpellor type single stage centrifugal pumpReciprocating pumpVane type rotary pumpDiaphragm type axial pumpMultiple stage – Diffuser type centrifugal pumpReciprocating pump
23Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 3 : PumpsTypical Production FacilityElectric Arc Furnace / Induction Furnace facility for casting the valve bodiesMould Shop for making mouldsFettling and Cleaning facilities for castingsMachine Shops for machining of various parts like impellor shaftsHeat treatment facility for various itemsAssembly shop for mechanical assemblyElectrical workshop for assembly of motors and drivesShot Blasting and painting facilitiesTesting facilityMaintenance workshops
24Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 3 : PumpsTypical Production FacilityMachine ShopAssembly ShopValve Testing Shop
25Petrochemical Industry in Saudi Arabia: A Snapshot Investment Opportunity No. 3 : PumpsWe anticipate the market for valves to be over USD 1 billion/year, given the fact that Saudi Aramco by themselves procure an average of US $ 680 million worth of pumps each year. SABIC companies are equally big users of pumps and if you add to that the other big users like SWCC, SEC and other Ministry of Water, the market size exists for a major investment in this field.
26Petrochemical Industry in Saudi Arabia: A Snapshot InferencesOil and Petrochemical Industry spends billions of Saudi riyal each year for procurement of Spares and Consumables and there exists a very big opportunity for local investors to Locally Manufacture some of this demand.The way forward recommended is to set up manufacturing plants in Technology partnerships and Joint Ventures with reputed OEM’s, with clear understanding on Technology Transfers and Training of local manpower, then develop core engineering competence within a planned time frameThe Major Players in Oil and Gas Industry on its part “must” support any new ventures by not only providing necessary technical assistance but also getting into suitable “Take Off Agreements” with new Start – Up companies, which will provide the necessary comfort to the local investor.