BrazilWhy non-metallics can be a game changer for oil and gas
Non metallics can be a gamechanger for the energy and oil and gas industry, improving corrosion, cost efficiency and asset management, among others. Vinodkumar Raghothamarao, a Director in the Consulting arm of IHS Markit, outlines the competitive edge non-metallics can bring about.
Energy companies operate in complex environments, where they face constant challenges especially with respect to corrosion. According to a NACE study, the total annual cost of corrosion in the oil and gas production industry is estimated to be $1.37 billion. Diving further, that figure can be broken down into $589 million on surface pipeline and facility costs; $463 million annually in downhole tubing expenses; and another $320 million in capital expenditures related to corrosion.
These costs and environmental risks could rise further in the years ahead, as new hydrocarbon sources are found in more challenging environments – deeper reservoirs with higher temperatures and pressures and containing greater concentrations of acid gases. Now with the above-mentioned corrosion risks looming at different industries, the time has come to evaluate use of alternative materials such as non-metallics to combat corrosion and overcome the challenges.
Non-metallic materials are increasingly being deployed across multiple industries, including oil and gas, construction, maritime, automotive, packaging and renewables. They offer several advantages over metallic materials, such as corrosion-resistance, reduced weight, increased durability, lower cost, and improved environmental efficiency.
Certain industries are already using non-metallics in coatings, components and structures to improve product performance in specific markets. For example, the automotive industry, are using higher volumes of plastics in cars to reduce weight and decrease CO2 emissions. Likewise, the construction industry uses fibre-reinforced concrete to improve durability.
Ship building is one such area the deployment of non-metallics could potentially lead to greater benefits. Steel ships are often damaged by corrosion and repair is eventually no longer possible, which is not a problem when non-metallic materials are used. Using non metallics materials such as fibre-reinforced plastic (FRP) instead of steel, for example, should reduce a ship’s weight and lower fuel consumption.
Overcoming corrosion
Non-metallics could bring about a paradigm shift in the way that industry deals with corrosion. There could be significant urge for industries to shift from corrosion control to corrosion prevention strategies. Developing sustainable non-metallic solutions may significantly reduce long-term corrosion costs for industries, benefitting one and all.
Cross-industry collaboration has the potential to leverage on the expertise and champion generate solutions that will benefit multiple industries and sectors. Without cross collaboration, individual industry segments could face longer timeframes and higher costs for innovation.
Diving deeper into the energy sector, the oil and gas global demand for non-metallics has been growing at faster rate than general oil and gas pipeline demand as the non-metallic operating envelope and life cycle cost have become more competitive due to the need to replace the traditional carbon steel pipelines.
This growth trend is expected to continue due to large investments by both oil companies, plastic pipe manufacturing companies and petrochemical producers focusing on the development of new plastic technology and manufacturing which continues expand the operation envelope and capture market share from the traditional carbon steel pipes.
The trend in the oil and gas sector is to replace conventional steel pipes with non-metallic pipes wherever possible and this has generated benefits in-terms of lower total cost of maintenance and ownership.
Aramco setting an example
Saudi Aramco is already a leader in the use of non-metallic materials in oil and gas facilities to reduce corrosion, weight and the cost of construction and operation. The company also uses non-metallics in other construction materials, such as composite cladding, asphalt and soil.
Building on the success of using RTP in crude oil applications, Aramco introduced a 6” RTP non-metallic pipe at its Hawiyah gas well in 2018 and expanded the utilisation of RTP in conventional gas, after realising significant cost savings at Hawiyah. RTP is resistant to corrosive environments such as high H2S, CO2 content and sour water, making it more durable than steel pipe in environments where these agents are present. It provides a longer lifespan for the entire piping system while offering the potential to reduce costs associated with maintenance and corrosion control. RTP is estimated to be more economical than carbon steel when measuring the incremental net present value over the life cycle of the pipe.
Saudi Aramco is working with local and international suppliers and research institutes to accelerate the development and deployment of non-metallic piping solutions, launching a non-metallic roadmap to drive industry advancements, with a key goal being to reduce the annual cost of corrosion by 10 per cent across Aramco’s entire flow line network.
Drivers of demand
Within the GCC, the non-metallics demand from Saudi Arabia’s infrastructure segment is expected to reach a peak of $1.75 billion in 2022 as the delayed and postponed projects are moved forward. The Saudi Arabian demand market for non-metallic pipes is more consolidated when compared with the GCC market. There is only limited overlap in demand between the non-metallic pipe infrastructure manufacturers and the specialists that provide non-metallic pipes for the oil and gas industry.
Saudi Arabia and UAE will be the major drivers of non-metallic demand within the GCC in the next 2-3 years.
Going forward, oil and gas companies seeking to leverage the best of non-metallics can adapt and/or implement some of the practical measures listed below:
- Leverage non-metallic capabilities from other industry segments and understand how it can be incorporated within oil and gas
- Develop a thorough non metallics technology assessment including understanding new monitoring technologies, new non-metallic manufacturing technologies and how IR4 and digitalisation can impact non-metallics
- Conduct a value chain analysis of non-metallics to explore their applications across the spectrum through joint industry projects and research collaboration
- Localise and strengthen the non-metallic supply chain to unlock growth opportunities in non-metallic materials
- Undertake critical and non-critical non-metallic supply chain mapping and bottlenecking assessments
- Proactively manage the non-metallics supply base, select relevant suppliers, focus on alignment and sustainability and ensure company ownership and accountability is clear to suppliers
The non-metallic pipe sector is an attractive segment, and with the right investments the GCC can create a globally competitive supply chain. The key reason for this is that most of the raw materials needed to manufacture non-metallic pipes is available in-country or regionally.
Going forward, the adoption of non-metallics has already begun for many industries, but the rate of adoption is increasing albeit at a slower pace. The consensus amongst the industry is that tackling such a challenge requires collaboration across the supply chain, multidisciplinary research and development efforts, and appropriate policies and regulations to enable adoption.
However, collaborations of this nature do not happen spontaneously – it requires strategic planning and coordination to enable partnerships between the many stakeholders that deliver long-term benefits for all.
Improved non-metallics supply chain resiliency and collaborative non-metallics supplier relationship management is the way forward for the energy and other industries to embrace and deploy non-metallics. It will be interesting to see how energy and other industrial sectors can effectively deploy non-metallics and take the game to the next level in 2021 and beyond.
