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Winds of change
Success in business, not to mention survival, requires adaptability – and nowhere is this more evident than in the 61 inspiring case studies of transformational change featured in the fi fth EIC Survive and Thrive (S&T) Insight report.
Following a tumultuous year for the oil and gas industry – COVID-19, the climate change crisis and collapsing oil prices – this year’s S&T report reveals that diversifi cation is once again the most popular growth strategy for participating member companies in challenging market conditions.
Of the 45% British and 21% international participants that de-risked their revenue sources to rely less on oil and gas going forward, 25% of these companies diversifi ed into renewables.
Move to off shore wind
For AIS – an established global leader in the engineering, manufacture and application of insulation and passive fi re protection systems, buoyancy, and subsea products for the energy industry – it was the stability of the complementary off shore wind market that proved appealing.
“Although there was a slowdown during COVID-19, activity remained, with windfarm projects going ahead and off shore works continuing,” says Andi Cunningham, Business Development Manager for Renewables at AIS.
“This makes it an attractive market, and one where we can transfer our existing expertise. The market has massive potential: it is relatively new, and as countries and companies understand the importance of moving away from fossil fuels, the potential growth is huge.”
Indeed, AIS is anticipating that 4% of 2021 revenue will be derived from renewables – up from 0% last year.
Balmoral is another example. Established in 1980, the company’s core business was tied to the subsea oil and gas sector. Today,
change
Diversifi cation is again the most used growth strategy among EIC members. With oil and companies moving into the resilient renewable energy market, Editor Sairah Fawcitt looks at the shift to off shore wind
The renewable energy industry can take advantage of the expertise evolved from years of oil and gas operations in the North Sea
Global opportunities in floating offshore wind
The UK and Europe are currently leading in operational capacity, with the 30MW Hywind project in Scotland and Portugal’s 25MW Windfloat Atlantic project successfully deployed. New proposals are rising in France, Norway, Spain, Greece, Italy and Sweden, and analysis by WindEurope estimates that up to 7GW could be installed by 2030.
There is also movement in the US, Japanese and Korean markets, with predictions currently indicating that by 2050 up to 50% of floating capacity will be produced in the Asia-Pacific region alone. DNV estimates that, in that time, global capacities will increase from 100MW to 250GW, and costs will reduce by 70%. There are significant barriers to commercialisation, including supply chain development, shipyard availability and quayside space, financing and regulation. Policymakers need to help mobilise the supply chain and technology companies through subsidies and other supportive legislative mechanisms. Nevertheless, with interest and growth seen in the last year alone, FOW is forecasted to become a leading future energy production source.
however, the company is enjoying considerable success in off shore renewable energy. Having been awarded three new contracts within the off shore wind sector, its order intake from diversifi ed sectors is expected to increase from £700,000 in 2020 to £7m in 2021. Its success is undoubtedly thanks to its quick and agile responses to the clean energy transition, a sound long-term strategy, and the natural evolution of its existing product range.
“Our established solutions are all heavily used in off shore wind,” says Steve Gibb, Public Relations Manager at Balmoral. “However, oil and gas products are traditionally designed to suit deepwater operations, when compared to renewables cables that are deployed in relatively shallow waters, in terms of both strength and subsea movement. We had to re-imagine our product portfolio to harness our oil and gas experience but operate within the parameters of off shore renewables, ensuring the evolved range addressed the new demands at optimum price and performance.”
Seize the potential
For companies looking to enter the renewable energy sector, one emerging market that is continuing to progress towards commercialisation is fl oating off shore wind (FOW), says EIC Energy Analyst Sharanya Kumaramurthy.
“The oil and gas sector (O&G) is uniquely placed to profi t from its synergies with FOW, due to its logistical and commercial experience with off shore developments – in particular oilfi eld support systems, supply-chain relationships, marine duediligence, contracting, and asset maintenance and operations. Off shore platform electrifi cation with FOW can also further reduce costs and emissions, giving players a stronger foothold in the energy transition,” says Kumaramurthy.
Although FOW is still in its infancy, energy developers have shown increasing interest. Examples include Equinor and Saipem, with Total also joining France’s EolMed project, the UK Erebus project, and entering the South Korean market with a 2.3GW portfolio acquisition.
“Entering at a relatively early stage allows companies to become active players in the future FOW supply chain,” Kumaramurthy goes on.
Towards a net-zero future
For oil and gas supply chain businesses that have been impacted by the energy transition journey, “the renewable energy sector off ers the opportunity to transfer high-level skills and experience to develop and grow the renewable energy workforce we will need to meet our net-zero ambition,” says Emma Harrick, Energy Transition and Supply Chain Manager at Scottish Renewables.
“Our industry can take advantage of the expertise which has evolved from years of oil and gas operations in the North Sea, specifi cally around complex technical project management techniques, a familiarity with harsh environments, decades of precision engineering and robust commercial know-how,” she adds.
“These skills will also be a great export opportunity and can improve our economy as more countries across the globe work to decarbonise their energy systems.”
What advice can you offer companies thinking about moving into renewables?
Emma Harrick, Energy Transition and Supply Chain Manager, Scottish
Renewables: “The ScotWind Leasing process will mean a signifi cant expansion of off shore wind capacity, while the repowering of our existing onshore wind fl eet, alongside the development of new projects, opens up the playing fi eld for supply chain businesses to compete. Renewable heat, green hydrogen, as well as developing technologies like wave energy and those on the cusp of commercialisation, like tidal power, also off er extensive diversifi cation possibilities for the supply chain.”
Andi Cunningham, Business Development
Manager, Renewables, AIS: “It is important to spend time to understand the market. I think it is important to realise that it is not the same as oil and gas. From a technological perspective, the shallow water, highly dynamic environment seen in off shore wind is both demanding and unique. Legacy oil and gas technologies are not always suffi cient to meet the challenge.”
Steve Gibb, Public Relations Manager,
Balmoral: “The industry is developing very quickly, and if you sit on the sidelines, you will be overtaken. Look at your current off erings and consider if and how they might be adapted to suit this and other sectors. When you are confi dent you have a product or solution that is fi t for purpose, let everyone know about it. Join industry organisations and associations to help you reach potential clients and sign up to government international trade missions where appropriate.”
Creates Industry First Solution for High Pressure Topside Application ½” 20,000psi Manual Gate Valve for Topside Applications Completes API 6A 21st Edition Appendix F PR2 Qualifi cation
The recently qualified Oliver Valves ½” Bore Topside Manual Gate Valve has provided our client and end user a solution for use in an industry first high-pressure development in the Gulf of Mexico.
The Challenge: The project required 20ksi DBB Isolation for vents, drains and chemical injection points around the TUTA (Topside Umbilical Termination Assembly), Boarding Valves and Production Manifold. Process operating pressures were expected to be around 16,500psi. A fully rated API 20k valve was required by the customers specifications. Small bore instrumentation needle or ball valves were available to the customer at working pressures of 20,000psi but a full through bore gate valve, such as the one above, was a new market requirement: • Fully rated PR2 Tested API 20,000psi • Fire Safe & NACE Compliant • Process Connection - Compact Flanged • Instrument Connection – Cone & Thread • High Alloy Construction • ½” Bore • Gate Isolation with Needle Vent because ball deflection had been noted as an issue by the customer with high pressure ball valves.
Our Challenge: As the supplier of choice, Oliver’s were required to design and build a valve very quickly to meet the stringent application and also the project time-line. All of the considerations below had to be met: • Conceptual Design and Engineering Calculations • Arrangement Drawings • Size & Weight Considerations • Detailed Bill of Materials • FEA Analysis • PR2 Testing • Fire Testing • 3rd Party Witness testing • Customer approval of all test documentation, procedures and FEA • Prototype; Procurement of materials, Machining, Assembly, Development • Only a complete, fully tested, and qualified valve would allow production to begin. Any miscalculation could delay delivery of the valves and causes serious project impacts. This was roughly 12-months from start to finish. • Design that would meet BSEE requirements • Customer confidence
Solution: Oliver Valves and their master distributor, AWC Inc, have been a long-time trusted supplier to this customer. They have demonstrated experience in project execution, quality, and specifically the desired technology to meet the requirements of this project. The Oliver team were able to meet and exceed all of the customers’ requirements. Collaboration with the customer from an early stage in the project resulted in a mutually beneficial solution. The Result: Oliver Valves will be supplying multiple ½” Manual Gate Valve DBB’s to a Gulf of Mexico Project. In this project application the ½” Gate Valve DBB will be used to drain the 20,000psi rated pipework surrounding the large boarding valves on a semi-submersible floating production unit. First oil is anticipated 2024. The high-pressure rating of this design allows our clients and end users alike to access other high pressure resource opportunities across the industry. • Working Pressure:20,000psi (1379 bar) • API 6A 21st Edition Appendix F PR2 Compliant • Independently Witnessed and Approved Qualification • Qualified Temperature Range -29oC to 121oC operable • ½ Turn Manual Operation • Can be offered in single isolate or DBB format utilising a 20Ksi OS&Y Vent • Qualified in ASTM A182 F55 with UNS N07718 & N06625 Trim • Fire Tested In accordance with API 6FA 5th Edition
