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World Downstream Maintenance Market Forecast 2015-2019energy business insight
World Downstream Maintenance Market Forecast 2015-2019
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Supply Chain – Middle East
Chapter 3 : Market Structure and Methodology
The Middle East is characterised by
operators awarding multiple contracts
direct to lots of different small
companies, with the aim of achieving
perceived value for money. Bundling
is still uncommon.Whilst infrastructure is ageing, the
concept of fabric maintenance has
still not been fully incorporated by
the industry. In addition, much of
the maintenance work is carried out
in-house.EPC contractors (brownfield and
greenfield) contract fabric mainte-
nance and other specialist service
providers for services such as the
preparation and application of spe-
cialist coatings on modification and
newbuild work.The Middle Eastern market is char-
acterised by many local providers
across all service lines.
NOTE: This supply chain is intended to illustrate the most common routes to market for the
main service lines. The companies in each box are intended to be indicative key market players
World Downstream Maintenance Market Forecast 2015-2019
By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Asset LifecycleChapter 3 : Market Structure and Methodology
Pre-FEED Studies
and Conceptual
Design
Operations &
Maintenance
ModificationsDecommissioning
CAPEX Phase
Liabilities
OPEX Phase
Commissioning
and Start-up
Construction
FEED
Maintenance:
Ongoing inspection, repair and upkeep of downstream assets is a vital process within the
downstream plant lifecycle. Maintenance services reduce operational costs over the long-
term, maximise uptime of the facility and ensure the efficient running of all equipment within
it. High ongoing levels of maintenance can also prolong the asset’s life; significantly pushing
back the plant’s decommissioning date.
Maintenance services are essential to ensure the asset is able to perform its required function
effectively and efficiently whilst adhering to any health, safety and environmental regulations
in place.
Asset Services
Asset Services encompass a number of service lines all implemented with the
aim to reduce the operational cost and downtime of the various electrical,
mechanical, rotating and process equipment that is vital to the smooth running
of the facility.
Mechanical Services
Electrical & Instrumentation
Fabric Maintenance
Rotating Equipment
Process equipment
Asset Integrity
Asset Integrity services aim to prolong the downstream lifecycle through the
management and development of maintenance strategies, ensuring maximum
plant uptime and an efficient maintenance schedule.
Consultancy
Asset Management
Integrity Services
The service lines covered in this report are split into two sections:
World Downstream Maintenance Market Forecast 2015-2019
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Refinery Yeild and Petrochemical Output
Chapter 2 : Drivers and Indicators
The two most common petrochemical
feedstocks are olefins and aromatics.The major hydrocarbon sources
used in producing petrochemicals
are obtained from gas processing and
petroleum refining.The main yields from refining are
gasoline, kerosene, distillate fuel and
residual fuel.
In 2014 US refineries produced 45% of
their yield as gasoline, although yields
can be altered in response to price. Figure 15: US Refinery Yield 2014
Motor GasolineKerosene Jet FuelDistillate FuelResidual FuelOther
Refining YieldsThe chart shows the yield from US refiner-
ies in 2014. Refiners can adjust product
yields in response to changing product
prices and other market conditions by
varying refinery processes and the types of
crude oil they choose to refine. The refinery
output will also be determined by the com-
plexity of the refinery; those with a catalytic
converter are generally more complex and
able to refine heavier crudes.The yields sum to more than 100% due
to the processing gain from refining; the
volume by which total output is greater
than input for a given period of time. Dur-
ing refining processes such as fluid catalytic
cracking, volumes can increase when large,
heavy molecules are broken
into smaller and lighter molecules that take
up more space.Petrochemical process
The diagram shows some of the petro-
chemical feedstocks and the consumer
goods produced by them. The two most
common petrochemical classes are olefins
and aromatics. Olefins include ethylene,
propylene and butadiene and can be used
to produce industrial chemicals, plastics and
rubber. Aromatics include benzene, toulene
and xylene (BTX).The main hydrocarbon sources used in a
petrochemical plant are either obtained
from gas processing (methane, ethane, pro-
pane, butane) or petroleum refining (naptha
and BTX).
Gas-produced ethane is typically the
favoured feedstock across the petrochemi-
cal industry due to lower costs. With the
majority of European petrochemical plants
focusing on naphtha-based cracking, this
has placed pressure on European plants in
recent years.
However, the recent crude oil price
downturn has prompted a sharp decline in
the price of naphtha. Ethane had an almost
tenfold advantage over naphtha at the start
of 2014. This had decreased to less than
twofold by December 2014, benefiting Eu-
ropean petrochemical plants by increasing
their margins. Although, these benefits may
be short lived depending on the longevity
of oil price decline.
“Margins are high currently, but it
really depends on the equipment in
the refinery and the complexity. The
catalytic cracker is the most complex
part of the refinery”Integrated Downstream Operator
Operator budgets tighten, but Downstream Maintenance spend still sees riseBetween 2015 and 2019, global downstream asset maintenance spend is expected to total $322 billion (bn), an increase of 12% when compared to the previous five-year period. In 2014, expenditure totalled $63bn for the world’s global downstream asset population of approximately 13,000 facilities, DW expect this to increase to $71bn by 2019. Despite a minor drop in 2015, resulting from industry-wide price deflation of equipment and services and budget tightening, an ageing existing asset population as well as a number of new installations drive the overall growth.
By sector, Asset Services accounts for the majority of expenditure, 72%, with Asset Integrity accounting for the remaining 28%.North America and Asia dominate global expenditure, accounting for 35% and 28% of spend over the forecast period respectively. US downstream facilities are also expected to see a revival as a result of the recent shale boom.
The World Downstream Maintenance Market Forecast 2015-2019 analyses the demand for maintenance in two key equipment and service
lines: downstream asset services and down-stream asset integrity services, and across four facility types: refineries, petrochemical plants, gas processing and LNG.
The report includes:
• Drivers & Indicators – in depth discussion of the factors encouraging asset mainte-nance expenditure including: E&P trends, oil & gas prices, analysis of the recent oil price downturn), downstream facility popula-tion, asset lifecycle, policies & regulation and trends and drivers detailed by refinery, petrochemical, gas processing and LNG.
• Service Line Analysis – for downstream as-set services and asset integrity services split out by service line, asset type and region with competitive landscape and detailed supply chain analysis.
• Regional Analysis – expenditure by service line 2010-2019 with trend commentary for Africa, Asia, Australasia, Eastern Europe & FSU, Latin America, Middle East, North America and Western Europe.
World Downstream Maintenance Market Forecast 2015-2019
By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Methodology: OverviewChapter 4 : Asset Services
Assumptions
Asset based
As the asset varies by age, capacity and
region the cost assumption is adjusted.
Asset type
As each asset type performs different
processes the cost assumption is
adjusted to reflect this.
For LNG facilities, DW accounts for
the differences in process and com-
plexity of export and import terminals
by adjusting the cost assumption.
Regulation and culture
These are adjusted for in the cost as-
sumption by applying a regional index.
Onshore
Douglas-Westwood
In-House Database
Ass
et D
ata
Mod
ellin
g Pr
oces
s
Refining
PetrochemicalsGas Processing
LNG
ExportImport
Capacity
Varying facility sizes and the
associated level of maintenance
required is accounted for by the
use of a cost assumption per
barrel for refining, per mcf for
gas processing and per tonne for
petrochemicals and LNG.
Age
Age multiplier applied to all
assets to account for the extra
maintenance requirements as
facilities age.
Region
A regional index is applied to
account for environmental,
labour and regulatory differences
between regions.
Asset Integrity Market
Comprised of:
Consultancy
Asset Management
Integrity Services
Asset Services Market
Comprised of:
Electrical & Instrumentation
Fabric Maintenance
Mechanical Services
Process Equipment
Rotating Equipment
Annual Cost Assumption by Service Line (including Inflation Assumption)
The cost assumption will vary by asset type, accounting for the variations in complexity of equipment and machinery used. DW
assign different cost assumptions for export and import terminals due to the higher complexity of export terminals.
World Downstream Maintenance Market Forecast 2015-2019
By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood
Australasia
Chapter 6 : Regional Summary
Figure 39: Maintenance Expenditure in Australasia 2010-2019
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Why purchase the Downstream Maintenance Market ForecastDouglas-Westwood’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
An essential report – for financial institu-tions, equipment manufacturers, operations & maintenance companies and contractors, oil & gas companies and government agencies & departments wanting to make more informed investment decisions.
Our proven approach includes:
Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.
Detailed methodology – the report uses research from our own in-house downstream databases for refineries, petrochemicals, gas processing and LNG, an information system ex-clusive to DW, to form the basis of the models. Assumptions used to generate market demand are the result of our primary and secondary research. Demand-side analysis by service line provides a metric on which to establish future opportunities and provide a context for market share assessment.
Comprehensive market forecasts – examina-tion, analysis and 10-year coverage of expendi-ture.
Concise report layout – consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and support-ing materials condensed to enable quick review with ‘speed-read’ summaries of key points throughout.
ISBN 978-1-910045-16-9
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2 Drivers and Indicators ........................................... 10Population & GDP Growth Drive Energy Demand ............................................................. 11
Changing Energy Mix .................................................................................................................. 12
Natural Gas .................................................................................................................................. 13
Market Forecast: By Service Line ............................................................................................ 35
Market Forecast: By Asset Type .............................................................................................. 36
Market Forecast: By Region ...................................................................................................... 37
5 Asset Integrity ......................................................... 38Market Forecast: By Service Line ............................................................................................ 39
Market Forecast: By Asset Type .............................................................................................. 40
Market Forecast: By Region ...................................................................................................... 41
Africa ............................................................................................................................................. 45
Asia ................................................................................................................................................ 46