PCMay2014

May 2014

WHY EUROPE NEEDS TO ACT ON SHALE

EXTERNAL PIPELINE COATING IN RUSSIA

CONFERENCE: FIELD JOINT COATING 2014

THE ROLE OF POLITICS IN US PIPELINES

ISSN 2053-7204

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04 News

11 Europe needs to act on shale Europe is lagging the world in its development of shale oil and gas. AMI Consulting

senior vice president Noru Tsalic looks at why shale is so important and counters

some of the arguments of opponents.

17 Functionalised approach to pipeline protection Bredero Shaw’s SureBond 100 coating system uses functionalised PE to simplify

coating structure while offering improved mechanical and fi eld joint performance.

Cedric Oudinet explains more.

21 The politics of US pipelines Key pipeline projects are facing intense and delaying scrutiny in the US, to the benefi t

of rail, barge and road transport operators. Nicholas Newman explains more and why

pipelines will, in the end, win out.

28 Denso wins Indian rehabilitation project Denso secures a contract to supply 2.4m square metres of corrosion protection

products for Indian Oil Corporation’s pipeline rehabilitation programme.

31 External coatings for pipelines in Russia Russia’s pipeline coating and rehabilitation market is large and demanding. Andrew

Chalov provides some insight into the main technologies in use in the country.

34 Conference preview: Exploring FJC innovations AMI’s fi rst Field Joint Coating conference takes place in Germany in September. We

take a look at the speaker line-up and preview some of the topics that will be covered.

36 Product update

contents

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contact usHead of business publishing: Andy Beevers E-mail: [email protected]: Chris Smith E-mail: [email protected] editor: Noru Tsalic E-mail: [email protected]: Nicola CraneAdvertisement manager: Claire Bishop E-mail: [email protected] Direct tel: +44 (0)20 8686 8139

May 2014 | PIPELINE COATING 3

PIPELINE COATING | May 2014 4

news

Aegion Q1 revenues ahead 35%$217m attributed to the

Brinderson business unit. Total

group order backlog stands at

£749m.

Aegion has recently secured

a number of high value

contracts. In March, the City of

Baltimore in the US awarded it

a $10m contract covering the

application of Insituform CIPP

linings to around seven miles

Aegion Corporation reported a

35.5% increase in revenues for

the first quarter of 2014, up to

$306.2m due largely to the

first contribution from its

Brinderson oil and gas service

group acquisition.

The company also, however,

reported gains in its Commer-

cial and Structural and Waste

and Waste Water business

ShawCor’s Bredero Shaw pipe

coating division has won a

$70m contract from BP

Exploration (Shah Deniz) on

behalf of the South Caucasus

Pipeline Company for coating

the South Caucasus Pipeline

(SCP) Expansion.

The contract involves

The SCP Expansion Project

is intended to expand the

capacity of the existing SCP

system to accommodate

additional gas throughput from

the Shah Deniz Stage 2

development in the Azerbaijan

sector of the Caspian Sea.

❙ www.brederoshaw.com

Bredero Shaw to coat SCP Extension

units totalling $5m. However,

its Energy and Mining division

was slightly impacted by

decreased sales in in its

industrial lining activities and

a slowdown in Canadian

pipeline construction and US

pipe coating.

The Energy and Mining

division had an order backlog

of $416m at the end of March,

coating approximately 491km

of predominately 48-inch pipe

with a three-layer polyethylene

(3LPE) external anti-corrosion

coating and applying internal

flow coatings. Coating work is

expected to commence in 2014

and be completed in late 2015,

said the company.

❙ Developers of the Donlin

Gold project in Alaska,

Barrick Gold and Nova Gold,

have filed for a right of way

for a 315-mile natural gas

pipeline that will run from

Cook Inlet to the mining site

at Crooked Creek, according

to a report in the Anchorage Daily News.

www.donlingold.com

❙ Canadian crude oil exports

by rail increased by 83% in the

final quarter of 2013,

compared to the same period

in 2012, according to data

from the country’s National

Energy Board (NEB). Volume

exports were up from 1.16m

m3 in Q4 2012 to 2.14m m3 in

Q4 2013.

www.neb-one.gc.ca

❙ Europipe has placed an

order worth around $50m

with Bredero Shaw for

concrete weight coating of

Line 1 of the South Stream

Offshore Pipeline that will run

beneath the Black Sea

between Russia and Bulgaria.

The contract, will be carried

out at Leith in Scotland.

❙ www.europipe.com

news in brief Saipem contracted to build the first South Stream pipeline

of small and medium diameter

wastewater pipelines.

In late April, the company’s

Corrpro subsidiary won a

$6.6m contract to provide

engineering and cathodic

protection services for 700

onshore well casings in the

Dukhan oilfield in Qatar by

Qatar Kentz.

❙ www.aegion.com

Saipem has won the contract

to build the first of the four

South Stream offshore

pipelines designed to carry gas

from Russia to Bulgaria

beneath the Black Sea.

The contract, valued at

around E2bn, includes design

and installation of the subsea

pipeline plus the shallow water

sections, shore crossings,

landfall and associated

facilities for all four pipelines.

Construction will com-

mence at the end of 2014 and

is expected to continue to the

third quarter of 2015.

The pipeline will be laid by

Saipem 7000 (pictured), the

company’s state-of-the-art

J-Lay vessel for ultra-deep

water applications, and

Castore Sei. Parts of the South

Stream pipeline will be laid at

depths of 2,200m, according to

Saipem.

❙ www.saipem.com

newsnews

Canada’s National Energy

Board (NEB) has approved

Enbridge Pipeline’s plans to

reverse a section of its Line 9B

pipeline and to increase capac-

ity of the Line 9 pipeline to

carry heavy crude to refineries

in Ontario and Quebec.

NEB has given approval to

reverse the 639km section of

Line 9B between North

Westover in Ontario and

Montreal in Quebec (it already

had gained approval to reverse

Line 9A between Westover and

Sarnia). The approval will

increase the overall capacity of

Line 9 between Sarnia and

Montreal from 240,000 to

300,000 barrels a day.

The decision means

Enbridge will be able to run all

of Line 9 in an eastward

direction, allowing it to

transport crude oil from

western Canada and the US

Bakken region to Ontario and

Quebec refining operations.

“Bringing a new, reliable

supply of competitively-priced

crude oil to respond to the

needs of Quebec-based

refineries will protect more

than 4,000 jobs, sustain a

vibrant petrochemical industry

and strengthen the economy,”

said Enbridge president and

CEO Al Monaco.

❙ www.enbridge.com

NEB approves Enbridge Line 9B reversal scheme

Marathon Oil Norge has

awarded the contract for

extension of subsea infrastruc-

ture on the Alvheim field on

the Norwegian Continental

Shelf to Technip. The work

includes installation and tie-in

of spools and protection

covers, as well as installation

of one manifold.

❙ www.marathonoil.no❙ www.technip.com

❙ The month-long interrup-

tion to the Cano Limon

pipeline in Columbia

following a terrorist bomb

attack has cut the country’s

daily crude oil output by

72,000 barrels (some 7%),

according to data from the

state oil company Ecopetrol

reported by Reuters. The

pipeline carries oil from the

Cano Limon oilfield to

Columbia’s Caribbean coast.

www.ecopetrol.com.co

❙ Defective pipeline coatings

have been blamed for a

series of leaks that have

halted production from the

Kashagan oilfield in Kazakh-

stan’s Caspian Sea, according

to Reuters.

It reports sources

attributing the problems to

incorrect coating selection

for the sour gas product and

potentially incorrect storage

prior to installation. Produc-

tion may not restart until

2016 said Reuters.

www.reuters.com

news in brief

Marathon awards Alvheim contracts

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17-19 February 2015,

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Organised by:Applied Market Information Ltd.

To find out more about speaking, attending, exhibiting or sponsoring this market leading

event, contact the conference organiser Sabine Prack, Email: [email protected];

Tel: +44 (0)117 314 8111. Or visit the conference website: http://bit.ly/PC_2015

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news

TransCanada plans Eastern Mainline expansion

Technip reported a 23%

increase in year-on-year

revenues to €2.47bn for the

fi rst quarter of 2014, with

gains made in both the subsea

and onshore/offshore sectors.

Chairman and CEO Thierry

Pilenko (pictured) said its

subsea operations had

benefi ted from the start-up of

commercial production at its

fl exible pipe facility in Brazil,

as well as ongoing work in the

Gulf of Mexico; onshore/

offshore had gained from the

AMI publishes the 9th ElementOilfi eld conference programme

commencement of several

new projects.

“Order intake has been very

strong in subsea with over

€2bn of new orders, including

a very large project in Angola,”

said Pilenko. “In the offshore

segment, a number of smaller

and medium-sized projects,

for example a medium sized

EPC in Brunei or technology

FEEDs, contributed to over

€700m of new orders.”

Q1 subsea orders included

36km of fl exible risers and

fl owlines and 195km of pipeline

and subsea equipment for the

Jangrik fi eld in Indonesia.

� www.technip.com

AMI has published the

programme for the 9th

Element Oilfi eld Engineering

with Polymers conference,

which takes place in London in

the UK on 21-23 October 2014.

This well-established event,

formerly the MERL conference

(Materials Engineering

Research Laboratory is now

Element), examines the role of

thermoplastics, elastomers

and composite materials as

components in the demanding

oil and gas environment.

Speakers at this interna-

tional conference include

technical experts from

Hoerbiger Corporation of the

US, Prymsian Surfl ex Umbilic-

ais of Brazil, Statoil of Norway,

Swagelining of the UK, and

Technip and Total of France.

Download the full pro-

gramme and fi nd out more

about attending, exhibiting or

sponsoring the event click here:

http://bit.ly/ElementOEP14

TransCanada Corporation has

fi led a project description with

the National Energy Board of

Canada for its Eastern

Mainline Project, including

construction of up to 370km of

new pipeline.

The proposed project will

add new facilities to the

company’s existing Canadian

Mainline natural gas transmis-

sion system in south-eastern

Ontario, ensuring it can

accommodate growing

demand and new supplies of

natural gas from the northeast

of the US, the company said in

a statement.

The new project results

from the proposed transfer of

a portion of the Canadian

Mainline capacity from natural

gas to crude oil service, which

is part of TransCanada’s

proposed Energy East Pipeline

Project.

The new scheme proposes

construction of 370km of up to

36-inch diameter pipe together

with associated compression

facilities adjacent to the

company’s existing Mainline

facilities between Markham

and South Dundas in Eastern

Ontario.

“This new pipeline infra-

structure will be a vital

addition to the Canadian

Mainline system to meet the

needs of Ontario and Quebec

gas consumers,” said Russ

Girling, TransCanada’s

president and CEO.

� www.transcanada.com

Wood Group acquires SunstoneUK-headquartered Wood

Group has acquired

Sunstone Projects, a

pipeline consultancy

company based in Calgary,

Canada, that provides

engineering, procurement

and construction manage-

ment services to the

country’s oil & gas industry.

Wood is paying

CN$14.5m for Sunstone,

which employs 70 staff and

generated sales of around

CN$21m in 2013. The

company will be rebranded

as Wood Group Mustang and

will be run by the existing

management team under

president Barry Bauhuis.

“The Canadian pipeline

system is expected to

expand to ensure access to

markets for oil and gas

produced in western

Canada,” said Wood Group

Mustang president Steve

Knowles. “The acquisition of

Sunstone will strengthen our

ability to provide our clients

with services in this area.”

� www.woodgroup.com

Technip’s Q1 sales up by 23%


news

Arctic piling pipes byOMK

TMK IPSCO, the US Division of

Russian pipe manufacturer

TMK, is reducing operating

hours at its plants at Blythe-

ville in Arkansas, Camanchein

Iowa and Wilder in Kentucky. It

will also idle its 8-inch welded

pipe mill at Wilder.

The company says operat-

ing hours will be reduced by

around 30% in total in a

response to low cost imported

products.

“We have seen intense

pressure from low-priced and

TMK IPSCO cuts back at US welded pipe units

Russia’s United Metallurgi-

cal Company (OMK)

delivered the final batches

of custom coated steel

pipes for pile construction

on the first three sections of

the main Arctic Circle-Pur-

pe oil pipeline in March of

this year.

OMK has delivered a

total of 99,000 tonnes of

pipes over the past two

years. The pipes – 426mm

diameter with 12mm and

10mm thick walls and

325mm diameter with 9mm

thick walls – were all

produced at Vyksa Steel

Works from 09G2S grade

cold-resistant steel with a

double insulation coating.

The project has been

implemented to Transneft’s

specifications, according to

OMK.

❙ www.omk.ru

Global coatings group Valspar

reported a 10% increase in

sales for the second quarter of

2014 to $1.1bn.

“We are pleased to report

another strong quarter of

volume and sales growth from

International testing group

Exova has appointed Stuart

Bond to the role of global

business development

manager, corrosion. Bond

joins from UK-based TWI and

has more than 25 years of

consultancy and research

experience in the oil & gas

industry. He is a member of

the Institute of Corrosion and

is a NACE Senior Corrosion

Technologist. His role at

Exova will involve identifying

new opportunities for the

company’s corrosion testing

services.

People on the move

US-based radio frequency

power supply maker Comdel

has promoted Scott Johnson

from senior vice president to

president. He takes over the

Stuart Bond

leadership role at the firm

from his father Ted Johnson,

who will continue his long

involvement with the company

as chief technology officer.

Scott has worked in the RF

industry in design and

management roles for more

than 30 years.

Steve Orr has taken over the

post of CEO of Canada-based

Shawcor, succeeding Bill

Buckley who retires after 20

years with the company (nine

as CEO). Orr joined Shawcor as

president in September last

year and has more than 20

years of management

experience in the interna-

tional energy industry.

Aegion board director Charles

R Gordon has been appointed

Interim Chief Executive Officer

of the company following the

resignation of J Joseph

Burgess from his position as

President and Chief Executive

Officer for personal reasons.

In a statement, the company

said it will initiate a formal

search process to identify a

permanent CEO shortly.

both our Coatings and Paints

segments,” said Gary E

Hendrickson, chairman and

chief executive officer.

Coatings saw the strongest

gains, up by 12% to $603m.

However, this was largely

accounted for by its packaging

and wood coatings activities;

industrial and coil coatings

saw mid-single digit declines

due to uneven end market

demand.

❙ www.valspar.com

Valspar sees Q1 revenues rise

unfairly traded imports, particu-

larly welded products, for more

than a year and a half. Since the

International Trade Commission

(ITC) announced its preliminary

decision, we have seen a

considerable surge in the

import of Korean welded pipe,”

said TMK IPSCO president and

CEO Dave Mitch.

Mitch said almost half of

the welded OCTG sold in the

US in 2013 was manufactured

overseas.

❙ www.tmk-group.com

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Shale gas | energy markets

It has been observed many times before that energy is

the lifeblood of global economy. Reasonably priced

energy is the enabler of almost everything to do with

modern life – from basic survival needs to the produc-

tion of sophisticated goods and services. But where

does that energy come from? In recent years, we have

heard and read a lot about renewable energy; does that

mean that mankind is moving away from the more

traditional sources? Well, not quite! As the data in

Figure 1 unequivocally shows, we are using more fossil

fuels than ever before.

In fact, even consumption of coal (by far the most

polluting from a climate change point of view) is still

growing. The latest available data (2012) shows that

coal accounted for no less than 30% of global energy

inputs, only slightly below oil (33%) and well above

natural gas (24%). As for renewable sources, they

accounted for a mere 2% of the world’s energetic

balance.

Fossil fuel is what overwhelmingly powers China’s

manufacturing engine, supplying more than 90% of the

country’s primary energy. China’s huge reserves of

easily-exploitable low cost coal supplied 68% of that

energy demand in 2012.

Main image:

Test shale gas

drilling in

Poland’s Lublin

basin, one of

Europe’s

biggest

potential shale

reserves

Source: BP

Europe needs to act on shaleBut it’s not just China. Coal still accounts for a

signifi cant proportion of primary energy production in

the US (20% of the total) and even in the climate-change

conscious European Union (18%).

As for renewable sources (such as solar, wind power,

etc), in 2012 they accounted for around 2% of US primary

energy production – in line with the global average. Not

so in the European Union, where the proportion of

renewables has reached about 6%. This is a fairly

meagre result, in view of the fact it was achieved in

return for huge investments – which were directly or

(more often) indirectly paid by the consumers.

So why is this? For those disinclined to believe

conspiracy theories about oil companies sabotaging

tomorrow’s survival for today’s profi t, the answer is

clear: renewable technologies are still in their infancy.

Renewable technology is, by-and-large, still incapable

of delivering energy at competitive costs of production.

This does not mean renewable energy generation

technologies should be abandoned or neglected. Quite

the opposite, in fact: more work should be invested in

research and development aimed at fi nding innovative

solutions. A certain level of commercial-scale applica-

tion is also necessary, to provide experience and testing

Europe is lagging the world in its development of shale oil and gas. AMI Consulting senior vice president Noru Tsalic looks at why shale

is so important and counters some of the arguments of opponents


energy markets | Shale gas

grounds for new ideas. But the attempts at large-scale

roll-out at this stage of technological development

seem premature and a huge waste of our money. From

a climate change/CO2 emissions perspective, more

would be gained if that money was spent replacing the

highly polluting coal that produces 18% of our energy

requirements with clean-burning natural gas.

However, it is not just about wasting money. For

Europe, there is the bigger potential risk of squandering

an even more precious and future-related resource:

Europe’s economic competitiveness. In the modern world,

that all-important parameter depends on three factors:

� Cost of technology;

� Cost of energy;

� Cost of access to markets.

There is, in fact, a fourth factor – cost of labour – but

this is rapidly losing its importance in Europe. Very little

labour is represented in the cost of producing a new

car, or the cost of providing a minute of mobile phone

conversation.

Statistics show that much of the European Union

economy is mired in semi-stagnation, while the US

economy is beginning to grow once again. According to

the latest predictions by the International Monetary Fund,

the economy of the 28 European Union countries is

expected to grow by around 1.6% in 2014 and 1.8% in

2015 and annual growth is expected to remain below 2%

until at least 2020. As for the US, its economy is expected

to grow by 2.7% this year and almost 3% next year.

Some would argue that Europe is still struggling with

the effects of the economic crisis and that ‘economic

normalcy’ is bound to return sometime in the future.

But if that ‘normalcy’ fails to materialise while other

regions are enjoying economic growth then it could be

concluded that something more fundamental is wrong

– something that may cause the ‘crisis’ to become the

‘new normalcy’.

Japan provides an interesting case study in this

respect. Like the European Union and US, it has good

access to both technology and markets. But like the EU

(and unlike the US), it has experienced poor access to

affordable energy. The fact is that Japan has seen its

competitiveness evaporate, causing the country to

transition from the economic boom of the 1960s, 70s

and 80s to a virtual stagnation that started in the 1990s

and shows little signs of ending. Of course, the causes

are complex, but Japan’s disadvantage in terms of

energy costs has been – in the opinion of this analyst – a

major factor (Figure 2).

On the other hand, availability of cheap energy has

been a major factor in the current recovery of the US

economy – a recovery driven by strong growth in the

manufacturing sector. In the US, low cost energy is a

result of growing production of shale gas and tight oil,

itself made possible by a combination of technology

progress and sensible economic management.

It could be argued that, if it is to maintain or recover

its competitiveness, Europe also needs affordable

energy. If the continent is also to reduce CO2 emissions,

then rather than engaging in expensive renewables, it

needs to replace coal with natural gas.

Where is that gas going to come from? The North

Sea hydrocarbon reserves are gradually dwindling.

There may be many years of ‘scraping the barrel’ left,

but this is not a solution for growing demand. The

Middle East and Africa can produce cheap gas but

transporting it to Europe bites deeply into any competi-

expected to grow by around 1.6% in 2014 and 1.8% in

2015 and annual growth is expected to remain below 2%

until at least 2020. As for the US, its economy is expected

to grow by 2.7% this year and almost 3% next year.

the effects of the economic crisis and that ‘economic

normalcy’ is bound to return sometime in the future.

But if that ‘normalcy’ fails to materialise while other

regions are enjoying economic growth then it could be

concluded that something more fundamental is wrong

– something that may cause the ‘crisis’ to become the

‘new normalcy’.

respect. Like the European Union and US, it has good

access to both technology and markets. But like the EU

(and unlike the US), it has experienced poor access to

affordable energy. The fact is that Japan has seen its

Figure 1: World’s consumption of primary energy, by source. Values in billion tonnes of oil equivalent. Source: BP

the economy of the 28 European Union countries is transporting it to Europe bites deeply into any competi-

Figure 2: Assessment of regional economic competitiveness

Pipe blasting and coating systemsPipe handling equipment

Selmers Biesland 3 1948 RJ Beverwijk The Netherlands

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energy markets | Shale gas

tive advantage – not to mention that both regions are

plagued by political instability. Russia already supplies

almost 40% of Europe’s imports of natural gas and,

given the ongoing confl ict in Ukraine, Europe is likely to

want to decrease that share rather than increase it.

The obvious solution is much closer to home. Like

the US (and China), Europe possesses large reserves of

shale gas (Figure 3). The difference is that, while shale

gas has already revolutionised the US economy and

China is decisively moving towards commercial

exploitation, very little is happening in this direction in

Europe. In 2013, the US produced more than 200bn m3

of shale gas. China has produced in excess of 200m m3.

There is, undoubtedly, a strong anti-shale lobby in

Europe. Some oppose the exploitation of shale gas on

ideological grounds. Others, however, argue there are

other, more tangible, reasons why shale ‘will not work’

in Europe. One argument frequently put forward is

demography: it works in the US, some say, because the

population is much sparser there. In densely populated

Europe, however, there just isn’t room to set up the

necessary facilities without huge inconvenience to large

layers of the population.

At fi rst glance, there appears to be some truth in this

argument. The US does have a much lower population

density, compared to Europe. But a more detailed

examination shows that shale gas is not uniformly

distributed in the US and nor is the population. The bulk

of shale gas exploitation occurs in regions which are no

less densely populated than Europe, or at least the

European countries where most of the shale gas

reserves are located (Figure 4).

An additional argument opposing shale gas exploita-

tion claims that such activity presents a severe risk of

causing earthquakes, soil pollution and aquifer

contamination, or that it will require huge volumes of

fresh water. Again, this is not borne out by the facts. An

independent study published in January 2014 by the

UK-based Chartered Institution of Water and Environ-

mental Management (CIWEM) concluded that: “Com-

pared to other fossil fuels, the overall water use intensi-

ty of shale gas is low and claims by some opponents

that the shale gas industry represents a threat to the

security of public water supplies is alarmist.” The same

study also noted that: “Contamination of aquifers…is

unlikely where shale plays exist at depth in the UK.”

Of course, like many industrial endeavours, shale

gas exploitation can cause damage to the environment

and risk to health and safety if it is improperly conduct-

ed. But if we adopted an approach that blocked all

industrial activities on such criteria, then none would

ever be performed.

Some oppose shale gas exploitation on production

economics arguments and there is some merit in this.

The current production cost of shale gas in the US

fl uctuates between $3 and $5 per million BTU but due

to the different geology of shale and surrounding rocks

in Europe, production costs are expected to be much

higher, perhaps $8-$12 per BTU. However, Europe has

often bought natural gas at prices in excess of that

production cost, while experience and technological

progresses are likely to drive European costs down.

According to a recent study performed by Ernst &

Young: “Production costs in North America have

declined markedly over time with advances in technol-

ogy and knowledge transfer gained from the experience

of large-scale production. Technologies for drilling and

fracking are not at a developmental standstill. Growing

recognition of the potential of shale resources mean

that oil and gas and oilfi eld services companies will

invest in research and development to improve the

effi ciency and lower the cost of shale gas exploration

and production.”

Opponents also claim that if shale gas exploitation

does result in a lowering of energy costs in Europe, this

Above:

Protestors at

Balcombe in

the UK

demonstrate

against

Cuadrilla’s

fracking test

drilling

At fi rst glance, there appears to be some truth in this

distributed in the US and nor is the population. The bulk

Figure 3: Shale gas Total Recoverable Reserves(TRR, 2012 best estimate) Source: EIA

Shale gas | energy markets

would decrease the incentive to achieve greater energy

efficiency and develop renewable energy solutions. But

Europe is not an isolated island – it is a geo-economic

region in an increasingly inter-connected world. Europe

competes with other regions. Higher energy costs will

make Europe less competitive; this will not translate to

more ‘clean’ energy being used in Europe but to more

‘dirty’ energy being used in China and elsewhere.

In conclusion, while shale gas may not be a solution

for all of Europe’s economic issues it is certainly an

important component of that solution. However, left to

their own devices and faced with a vocal – if irrational or

poorly informed – opposition, politicians and bureau-

crats are likely to dither and prevaricate. It is imperative

that the Oil & Gas-related industries – including the

pipe coating industry – urgently mobilise to lobby

governments and to explain this issue to the public.

For further information:Shale gas and its potential impact on the economy in

general, and the pipe coating industry in particular, are

explained in AMI’s recent report on the global markets

for steel pipe coating. More information can be found

here. Or contact Noru Tsalic, Tel: +44 (0)117 924 9442,

Email: [email protected].

These issues will also likely form part of the

discussions at AMI’s Field Joint Coating conference,

which takes place in September in Düsseldorf, Ger-

many, and will deal with all aspects of field-applied

pipeline coatings.

❙ www.amiplastics.com

Figure 4: Population density

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Polyethylene | coating developments

Energy markets and the energy transportation sector

are under constant change. Global forecasts show a fast

growing energy demand over the next two decades,

primarily from non-OECD countries, which will be met

by tapping increasingly challenging and remote fi eld

developments. Energy demand and supply centres are

becoming increasingly distant from each other. As a

result, hydrocarbon transportation will play a critical

role in the energy value chain.

Safe and reliable hydrocarbon transportation

requires high performance anti-corrosion coatings.

Pipeline integrity specialist Bredero Shaw has devel-

oped a new pipeline protection platform launched

earlier this year under the SureBond name. The new

system uses a functionalised polyolefi n topcoat resin

that eliminates the need for an adhesive layer while

providing enhanced real-world performance.

Global challengesThe starting point for the project was to research the

global view of the current challenges faced by pipeline

operators, which was used to frame out the functional

requirements. This fi rst step in the standard Bredero

Main image:

First application

of the SureBond

100 coating

technology is

the Audex

Rotary oil

terminal project

at Fujairah in

UAE

Functionalised approach

to pipelineprotection

Shaw technology development process typically reveals

common clusters of requirements, spanning geogra-

phies and historically-used coating types.

It is well known in the pipeline industry that the

quality of application of a coating has a dramatic impact

on long term system performance so it is important to

choose a reputable coating service company. For those

that do, and who are satisfi ed with the current

performance levels of existing pipeline anti-corrosion

coating systems, the overwhelming feedback focused

on the fi eld joint as a primary root cause of integrity

concerns.

Further improving the performance of the anti-cor-

rosion main line pipe coating system will have only a

marginal impact on overall pipeline system perfor-

mance when the weakest spot, which is known to be

located around the fi eld joint, remains unaddressed.

It was clear that development of a next generation

coating would have to not only exceed current perfor-

mance levels as measured against specifi cations

(temperature rating, impact, cathodic disbondment,

bending, thermal cycling and the like) but also to help

mitigate fi eld joint concerns.

Launched this year, Bredero Shaw’s SureBond 100 coating system uses functionalised PE to simplify coating structure while offering

improved mechanical and fi eld joint performance.Cedric Oudinot explains more

�


coating developments | Polyethylene

Process developmentBredero Shaw’s research scientists were presented with

a mandate based on this customer feedback and

allocated over two years to develop and evaluate the

optimal formulation platform that would meet clients’

needs. The research team fi nally settled on a polyolefi n

matrix (primarily PE) with a novel and patented

molecular design which gives SureBond performance

similar to typical 3LPE systems yet does not require the

often problematic adhesive interlayer. The coating

construction is shown in Figure 1.

This novel approach is based on a tightly controlled

set of chemical reactions that take place between the

topcoat and the non-fully cured FBE substrate during

application. The result is a fully fused, chemically

bonded system with exceptional performance. The

functionalised PE blend results in a topcoat that exceeds

3LPE performance requirements due to creation of a

tough secondary network in the polymer while offering

an improved cutback substrate for fi eld joint application.

The next stage in the development process was to

scale the laboratory formulation to an industrial solution

ready for the factory fl oor. This additional twelve month

programme pulled in Bredero Shaw’s extensive plant

network, global engineering expertise and material

science expertise to ensure a reliable coating solution

that meets stringent and proven capability require-

ments. Multiple trials were held at several manufactur-

ing facilities to bring together fundamental knowledge

and operational expertise within a cross-functional

initiative designed to compress time-to-market. As part

of this programme, new plant equipment had to be

designed to accommodate the nature of the topcoat,

which reacts with a non-gelled FBE substrate, without

impacting on plant accreditation or line speed perfor-

mance. Figure 2 shows an inline curing oven developed

as part of the industrialisation process.

Performance benefi tsOver the course of these process trials samples were

sent to globally recognised testing labs across several

geographies to independently validate the enhanced

performance observed during the research stage. The

results showed that the engineered formulation

comfortably exceeded specifi cations such as ISO21809-

1. The SureBond coating has excellent barrier proper-

ties, which minimises the diffusion of corroding species

such as oxygen and water to the coating/steel interface.

Consequently, adhesion to the steel is very stable in

service environments. The system shows excellent

performance in 28 day cathodic disbondment tests at up

to 95°C compared to equivalent systems, working

synergistically with cathodic protection systems to

Figure 2: The

in-line curing

oven where the

SureBond 100

curing process

is initiated

Figure 1: Illustrative thickness models

of SureBond compared to 3LPE and

DFBE coating systems


Polyethylene | coating developments

provide long term pipeline protection.

Another benefit of the SureBond system is that

mechanical properties such as impact resistance,

hardness and flexibility – all of which are directly linked

to installation performance of the coating system in the

field – exceed those of equivalent 3LPE systems. Impact

resistance is so improved (>12J/mm) that the sug-

gested topcoat thickness for a SureBond-based system

is roughly half of that of an equivalent 3LPE.

While SureBond was designed to meet existing 3LPE

specifications, its adhesive-less design results in a

positively distinct performance in adhesion testing,

where the topcoat cohesively fails. This provides a

failsafe mechanical and moisture barrier that further

protects FBE. This cohesive failure behavior occurs even

at high operating temperatures and is shown in Figure 3.

The interlocking chemically bonded system also

helps spread strain across the total thickness, which

results in very good flexibility performance at much

lower temperatures than alternative anti-corrosion

systems. Bredero Shaw testing has shown SureBond

yields a 2.5° ppd system bend test at -50°C and passes

a 2.5° ppd topcoat bend test at -70°C without cracking.

This opens up a variety of new installation applications,

including previously unavailable cold bending capability

or artic installation conditions.

The coating system design also offers minimal

component thermal mismatch and reduces shrinkage

from the melt to solid phase, which eliminates issues

with residual stress delamination during storage or

field joint application. This results in outstanding

thermal cycling properties, showing no disbondment in

over ten -70°C to +100°C cycles. Even more aggressive

thermal shock testing with -70°C to +100°C shock

cycles and no thermal equilibrium also resulted in no

disbondment.

Given the performance data, Bredero Shaw is

confident a SureBond pipeline will offer the asset owner

a safer operating window and provide operators with a

higher level of confidence even after unexpected process

upset, such as a sudden gas line depressurization,

which could otherwise result in coating failure. This

advanced thermal stability performance also delivers a

higher level of pipeline protection in permafrost settings.

Field joint performanceAs discussed earlier, a key design parameter for the

SureBond topcoat was to deliver enhanced field joint

performance. The system is based on a blend of reactive

and functionalised polyethylene. The reaction between

the components begins during the extrusion process

and continues in the inline post cure oven after the

extrusion step, locking the polymer networks in place.

However, the system retains a small amount of reactivity

from the adhesion promoter and the functionalised

polyethylene, which reacts at the temperatures typically

reached during field joint installation. This small amount

of residual reactivity enhances the chemical bond to the

adhesive group or epoxy group in a typical field joint

solution. In addition, SureBond exhibits a substantially

higher surface energy than the typical polyethylene

grades commonly used in 3LPE application, as shown in

Table 1. Higher surface reactivity translates to greater

chemical affinity and hence a stronger bond to the field

joint material.

Global availabilityBredero Shaw secured and executed its first SureBond

100 application at its Ras-Al- Khaimah, facility in UAE in

January of this year. The coating system was applied to

6, 18, 24 and 30-inch pipes for the Audex Rotary oil

terminal project at Fujairah. The SureBond product will

be rolled out across the company’s global coating

facilities over the coming months.

❙ www.brederoshaw.com/Surebond

About the author:Cedric Oudinot is global product line manager for

anticorrosion and internal coatings at Bredero Shaw in

Houston, US. Oudinot graduated in engineering in

France, gaining a chemical engineering masters degree

and an MBA in the US. He has more than a decade of

experience in commercial and technical roles in the

international oil & gas industry. Oudinot joined Bredero

Shaw in 2010, taking on his current role in 2012.

Figure 3: A

SureBond 100

peel test under

way (left) and

example of the

cohesive failure

(right) resulting

in peel

performance

above 4N/mm

at 80°C

Table 1: Typical surface energy results (in mJ/m²/

dynes) for different coating systems

Polymer material Surface Energy

3LPE Surface 34-36

3LPP Surface <30 (28-29)

SureBondTM 44-46

Epoxy 54-56

FINAL REMINDER – BOOK NOWOrganized by:Applied Market Information LLC

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North America | pipelines

Vital pipeline projects are facing intense and delaying scrutiny in the US, to the benefi t of rail, barge and

road. Nicholas Newman explains why pipelines will, in the end, win out

One of the biggest challenges facing the North

American energy industry is how to deliver the huge

new shale oil and gas fl ows made possible by new

technologies such as horizontal drilling and fracking in

a safe and effi cient manner. The novel nature and

location of much of these new hydrocarbon products is

just part of the problem, the energy industry also faces

a proliferating range of environmental, regulatory and

political pressures.

Selecting a delivery option can no longer be deter-

mined by a simple cost- benefi t analysis. The choice of

pipeline, road, rail, barge or coastal tankers will depend

on the interplay of safety issues, operational and capital

costs, as well as environmental and regulatory

considerations.

In the aftermath of recent large scale accidents,

there appears to be growing public, political and

regulatory concern over the absolute and relative safety

of different transportation modes for oil and gas

industry products. Examples include the oil train

railway explosion in July 2013 in Lac-Megantic in

Quebec in which 47 people died and the explosion in

February 2014 on a major natural gas pipeline in

southern Kentucky, which led to a forced evacuation of

residents. Incidents such as these have sparked

growing public and political concern over new energy

transport projects, most visible in public protests

against TransCanada’s Keystone XL project and the

The politics of US pipelines

mile-long crude oil trains moving through cities such as

Philadelphia to the refi neries on the Delaware River on

the east coast.

The fundamental question being asked today is: How

safe and reliable are pipelines? Given that some 40% of

US oil pipelines were constructed in the 1950s and 1960s

and 15% of the country’s 281,000km network even

earlier, according to data from the Association of Oil Pipe

Lines, it is a fair question to ask. However, reliability is

less a question of age and more one of pro-active and

effective maintenance, argue pipeline operators.

“The age of the pipe shouldn’t make any difference,”

says Pat Denial, CEO of pipeline operator Enbridge.

That view is supported by US Department of Transpor-

tation safety statistics (Figure 1), which show that

pipelines incur fewer spillage incidents and personal

injuries than either road or rail. US casualty statistics


pipelines | North America

for the period from 2005 to 2009 show that oil pipelines

are around 70 times safer than truck transportation (the

latter resulted in the deaths of four times as many

people over the period despite carrying only a fraction

of the fuel shipments).

According to US government statistics, pipelines are

the primary means of transporting crude oil, petroleum

products and natural gas across the country with some

70% of crude oil and petroleum products transported by

pipeline on a ton-mile basis. Domestic tanker and barge

traffic accounts for 23% of oil shipments, road tankers

4% and rail tankers 3%. Currently, all natural gas in the

US is transported by pipeline.

Pipelines are also the safest transport means. Last

year the Congressional Research Service (CRS) 2014

report ‘US Rail Transportation of Crude Oil: Background

and Issues for Congress’ presented data showing

pipeline transportation is safer than road, rail or barge,

when measured by incidents, injuries and fatalities. The

report also noted that many road and rail incidents are

unreported, suggesting the safety margin of the pipeline

industry may be even larger.

Cost considerationsOf course, cost is also a key consideration. Moving large

amounts of crude oil along the proposed 1,179-mile

Keystone XL pipeline (Figure 2) will cost around $7 per

barrel, according to the US State Department. Pipeline

operator Enbridge charges a tariff of $13 per cubic

metre for travel of light crude along the 800 mile

pipeline linking Kerrobert Station in Saskatchewan to

Superior.

For refineries located next to major navigable

waterways, such as the Atlantic Seaboard or Gulf Coast,

shipment by barge is cheaper than rail or pipeline.

“Barges are about 30% cheaper than rail,” according to

Steve Clark, commercial manager of shipping and

logistics agency GAC Shipping USA.

Clark quotes a day-rate of around $8,500 for a

two-barge tow, each carrying 30,000 barrels of West

Texas Crude oil. That means the 14 day-round trip of

600 nautical miles from Corpus Christi to refineries in

New Orleans works out at around $4 per barrel. An

American Petroleum State Class coastal tanker with a

carrying capacity of 330,000 barrels of cargo capacity

would cost around US$54,000 a day, equivalent to $2.3

per barrel for the same shipping duration. It is,

perhaps, fortunate for pipeline operators that the US

Jones Act – designed to protect US shipping from

foreign competition in home waters – remains in place

as it is highly likely barge rates would be even lower if

open to global competition.

In comparison, transporting crude oil over the 800

miles by rail from the Bakken oil fields to the Gulf Coast

will cost between $15.5 to $31 per barrel, according to

the US State Department. Leasing costs for a class

DOT-111 rail tanker carrying 31,809 gallons can reach

$2,500 a month, excluding the additional cost of

accessing the rail network and the use of rail operator

services (Figure 3). However, the North American rail

network is much more extensive than the pipeline

network and this presents the opportunity for producers

to exploit market conditions and sell to the highest

bidders at any given time.

Obtaining meaningful investment figures for

comparison of the different transport modes is difficult.

Figure 1: Comparison of petroleum incident rates by transport mode

Transport Incidents per Average billionmode billion miles ton-miles per year

Barge/domestic tanker Data not available Data not available

Road 19.95 34.8

Rail 2.08 23.9

Hazardous Pipeline 0.58 584.1

Natural Gas Pipeline 0.89 338.5

Source: US Department of Transport: Bureau of Transportation Statistics 2013

Figure 2: It will

cost around $7

a barrel to

move oil using

the 1,179-mile

Keystone XL

pipeline

Source: TransCanada

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Testing, calibrating, advising



“Rail has cheaper capital costs than pipelines but costs

more to operate,” says Steven Paget, director of energy

industry financial and investment service provider

FirstEnergy Capital.

The capital cost of pipeline construction is certainly

eye-watering. For example, TransCanada estimates the

capital cost of constructing the Keystone XL Phase Four

1,179-mile (1,897 km), 36-inch-diameter crude oil

pipeline at $7.6bn.

Oil shipments by rail have ballooned with the

development of new shale oil fields in North America.

Carrying oil by rail requires dedicated oil tank rail cars

costing between $120,000 and $175,000 each, according

to industry experts. Warren Buffet’s BNSF railway

recently announced plans to buy 5,000 new tank cars to

transport crude oil, placing an estimated investment

cost on the project of $1bn. In addition, there is the cost

of locomotives and track to consider. A single track

freight line with a few locomotives and simple signalling

running across a flat, geologically sound, sparsely

populated landscape might be built for as little as $2m

per kilometre, including electrical and mechanical

equipment, according to railway-technical.com. A typical

diesel locomotive costs between $1.75m to $2.3m.

Turning to tanker barges and coastal freighters, a

second-hand 2,760 ton river tanker with a cargo

capacity of 2,736 ton/3,684 cbm may cost around

$600,000. As for coastal fuel carriers, coastal tanker

operator American Petroleum is currently building four

State Class vessels, each with a carrying capacity of

330,000 barrels, at a total cost of $214m.

According to Haartztankersales.com, a road tanker

tractor unit and transport trailer with a capacity of

43,000 litres will cost around $143,000 to buy, or around

$1,683 per week to lease. These costs do not take into

account the public cost of traffic jams, crumbling roads

and the not insignificant cost of road repairs, mainte-

nance and upgrades to cope with new oil traffic. The

Texas Legislature, for example, has budgeted $450m to

cope with new shale oil being moved by road from the

Eagle Ford formation.

Funding the expansion of North America’s energy

infrastructure is becoming increasingly difficult as the

traditional lenders – banks – adapt to increased capital

ratio requirements. The new sources of infrastructure

finance that are stepping in to fill the gap include private

equity firms, pension funds and insurance companies

seeking a regular income. KKR, for example, plans to

invest $2bn in infrastructure, while Calpers is planning

to increase its funding for infrastructure from 2% to 3%.

A recent as a decade ago, the big issue In North

America was to simply ensure oil and gas was delivered

to the people that needed it and, in general, energy

companies faced very little resistance to projects that

helped accomplish this goal . As FirstEnergy’s Paget

says: “Seven years ago, there was almost no permitting

risk around new energy transportation initiatives. Now

permitting risk is probably the single largest risk facing

new energy transportation projects. Investors can no

longer assume that a commercially secured energy

project will be permitted.”

Changing prioritiesPriorities have changed for both energy transport

regulators and operators. “The main safety issue in all

cases is to avoid a product release, particularly one onto

third-party property,” Paget says. As a consequence,

construction plans for new pipelines are being exam-

ined closely by environmentalists, landowners and

indigenous First Nations seeking to prevent or delay

projects.

TransCanada’s Keystone XL pipeline, which crosses

the Canadian-American border and so has to undergo

detailed environmental impact assessment, is perhaps

the prime example of how long a decision can be held in

the balance. In the latest in a long-running series of

delays, President Obama has deferred a final decision

until after the next election. However, the proposed

610-mile $2.6bn Sandpiper pipeline, which is designed

to transport oil from the Bakken region to Lake

Superior, falls under state jurisdiction so requires

neither the President’s permit nor a comprehensive

environmental impact statement.

Pipeline operational regulation is also an issue as far

as opponents are concerned. At present, day-to-day

operational regulation of US pipelines lies in the hands

of a patchwork of federal and state agencies that some

argue are inadequate and lacking in public scrutiny. At

Federal level, the US Department of Transport’s

Pipeline and Hazardous Materials Safety Administration

(PHMSA) subjects only 7% of natural gas lines and 44%

of all hazardous liquid lines to regular and rigorous

inspection, leaving it to the discretion of pipeline

companies to manage their assets.

A recent US Government Accountability Office (GAO)

report estimated that of the roughly 230,000 miles of

gathering lines that connect wells to process facilities

Figure 3: Comparison of North American transportation costs by mode

Transportation mode Cost per barrel Distance

Pipeline $7 per barrel 1,179-mile Keystone XL pipeline

Rail $15.50 to $31 per barrel 800 miles

Barge $4 per barrel. 600 nautical miles

Road Tanker Details not available Details not available

Sources: US DOT, AAR, US Coast Guard


North America | pipelines

or larger transmission lines, only 24,000 miles are

federally regulated. The National Wildlife Federation

argued in a 2012 report ‘After The Marshall Spill:

Pipelines in The Great Lakes Region’ that federal laws

are inadequate in a number of respects and that state

legislatures have not covered the gaps.

Until this year, the US public had no free right to access

the industry standards incorporated into the regulations.

There is also no opportunity for the public to comment on

the safety of individual lines during their construction or

operation, except when an operator applies to obtain a

waiver from general requirements. Furthermore, the

public does not have an opportunity to comment on

operators’ spill response plans. Public scrutiny and access

to requisite information is constrained.

As US oil and gas production has grown, US pipeline

plans have become a political hot potato. Despite a

string of high profi le accidents and the growing

effectiveness of anti-pipeline pressure groups, US

public opinion remains mixed. In September 2013, Pew

Research Centre carried out a survey of public attitudes

towards the Keystone XL pipeline project. It found 65%

in favour; 30% against, and 5% don’t knows. However, it

also found a sharp division by political views. An

overwhelming majority of Republicans (82%) favoured

construction of the pipeline, as did 64% of independ-

ents, but only around half of Democrats (51%). Pipeline

developers are having to take such fi ndings into account

– the public has to be won over and strong political

support gained if large pipeline projects are to be

realised in a democracy.

Rail has benefi ted from booming shale oil extraction

and public opposition to new pipelines. However, a

surge in accidents of rail oil-tanker traffi c has attracted

the attention of the regulatory authorities and a

tightening of regulations.

State emergency planning agencies are responsible

for co-ordinating emergency response during a major

accident. In addition, there are Federal-level mandatory

requirements. First, the Department of Transport

requires rail cargoes to be tested for classifi cation

purposes. Second, the PHMSA has introduced new

safety design standards for crude oil rail tanker

specifi cations to reduce the risk of explosion caused by

derailment and collision. The Federal Rail Administra-

tion has also begun unannounced spot inspections of

crude suppliers and transporters.

Public anxiety has been fuelled by rail accidents

involving oil. In North Dakota, for example, the oil train

collision of December 2013 was the fourth in just six

months. Meanwhile, in Washington State the frequent

Figure 4: North

American Class

1 railroad

network

Source: Wikipedia Commons

US Refi nery receipts of crude oil by mode of transportation

Source: Prepared by CRS; data from EIA, Refi nery Capacity Report, Table 9, June 2013

Notes: Some shipments may involve multiple modes, such

as rail to barge. This fi gure indicates only the mode used for

the last leg of such shipments.


mile-long crude oil trains are reported to be causing

traffic chaos at rail crossings. It is ironic, in fact, that

growing public opposition to new pipeline construction

is contributing to oil producers’ switch to trains while

the evidence shows that pipelines are safer.

As for road and water movements, the Federal

Highway Administration and the US Coastguards

regulate road oil tankers and water traffic respectively.

Neither transportation mode has seen particular public

pressure to tighten safety standards or restrict usage

- road oil tankers are perceived by the US public as just

another part of day-to-day traffic on America’s roads,

while barges benefit from a general perception of

safety. This would suggest that road and water traffic

may nibble away at demands for new pipeline capacity

along selected routes.

Pipelines are, in many respects, the victim of their

own effectiveness. It is undoubtedly much easier to

mobilise public opposition against one big project than

to effectively challenge many small ones. But despite

the highly organised and vociferous opposition to the

construction of new pipelines – and the competition

from rail, road and water – the demand for new pipeline

construction will inevitably grow to accommodate the

vast expansion in shale gas and oil output.

Inevitably, some pipeline projects will be delayed or

will fail, but the majority will be built. Pipelines simply

offer higher investment returns, superior safety and

better environmental performance over long distance

rail and road tankers, while barges can provide only

limited competition in large volume long distance oil

and gas transportation.

Rail has gained

from the delay

in approving oil

pipelines

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■ Real co-extruded 3-ply tape system.

■ No risk of spiral corrosion compared to 2-ply tapes.

■ Exceeds the requirements of class C 50 accroding to EN 12068.

■ Compatible with mill coatings from PE, PP, FBE, PU, CTE and Bitumen.

■ Designed for max. temperatures up to 85°C (185°F).

■ Maximum mechanical protection combined with outstanding tape fl exibility.

■ Tape system total thickness 3,2mm.

■ Tape system

product

DIN C 50


project | Field-applied coating

Denso wins contract to supply 2.4m square metres of corrosion protection products for Indian Oil Corporation’s pipeline rehabilitation programme

Indian Oil Coporation (IOCL)

– the largest pipeline operator

in India – has selected

tape-based coating technology

from Germany’s Denso as part

of the ongoing rehabilitation of

its more than 11,000km

network of oil, petrochemical

and gas pipelines.

Denso is to supply coating

materials to protect more than

2.4m m2 of IOCL pipelines,

which will be rehabilitated while

in operation. The system

tendered by the German

company comprises its

Densolen AS39P/R20HT

combination of a three-ply inner

and a two-ply outer polyethyl-

ene/butyl tape, which is claimed

to offer very good technical

performance and easy

application in the field.

Parts of ICOL’s pipeline

network have been in continu-

ous operation for more than 40

years. Denso Germany says it

has previously supplied more

than 2.6m m2 of the Densolen

AS39P/R20HT Tape System to

IOCL for rehabilitation

operations. This latest 2.4m m2

contract will be fulfilled in

batches over the period from

2014 and 2015 and will be used

to rehabilitate around 320km

of oil pipeline.

IOCL’s requirement for

pipeline rehabilitation is that

the coating should provide

protection from corrosion for

at least a further 40 years. The

company’s technical commit-

tee is convinced the three-ply/

two-ply polyethylene/butyl

tape system technology can

deliver this performance,

according to Denso.

Denso says its Densolen

corrosion protection tapes and

tape systems been used

successfully in many pipeline

projects worldwide and are

protecting more than 100m m2

of pipelines.

The Densolen AS39P/

R20HT system is a two-tape

coating solution comprising a

self-amalgamating inner wrap

applied over a layer of

Densolen primer. Denso says it

is capable of continuous

operating temperatures of up

to 50˚C and carries a C-50

stress class rating. The system

comprises two layers of inner

wrap tapes and two layers of

outer wrap tapes, which

results in a total protective

layer thickness of 2.6mm.

IOCL is India’s largest

company reporting total

revenues of more than

INR4,700bn (around E58bn) for

the 2012/13 financial year. It is

the highest ranked Indian

company in the Fortune Global

500 listing, ranked in 88th

position (just ahead of Procter

& Gamble).

IOCL’s 11,214km of

pipelines carries more than

200,000 tonnes of oil and 10m

metric standard cubic metres

of gas each day. The company

has 14 new pipeline projects

under development represent-

ing a total investment value of

INR6.7bn ($830m). Altogether,

these projects will expand its

transport capacity by a further

16m tonnes a year.

Planned projects include

the 700km Paradip-Haldia-

Budge Budge-Kalyani-Dur-

gapur and 400km Ennore-

Trichy-Pondicherry LPG

pipelines, the 295km Sangan-

er-Bijwasan naptha pipeline,

and the 120km Cauvery Basin

Refinery to Trichy pipeline.

Germany-based Denso has

been manufacturing corrosion

prevention and sealing

technology products since

1922. Since the introduction of

its first passive corrosion

prevention for pipelines – the

petrolatum-based Denso-Tape

– in 1927 the company has

developed a wide product

range including Densolid liquid

coatings, Densit sealing tapes,

Dekotec heat shrinkable

sleeves and Densolen

polyethylene/butyl tape

systems.

❙ www.denso.de

Application of DENSOLEN

AS39 P/ R20HT at

IOCL in India

Denso secures major Indianrehabilitation contract

BASF Performance Materials provide customized solutions for the most challenging conditions – onshore and offshore. From foam breakers, rock shields to anti-corrosion and thermal insulation coatings – we design high performance, reliable solutions. Oil and gas pipelines navigate the toughest terrain, on land and in subsea environments. And you can count on absolute protection for pipes, safety for workers and sustainability for the natural world. Because at BASF, we create chemistry.

www.polyurethanes.basf.us/oilandgas

that makes pipelines love extreme conditions.

We create chemistry

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Pipelines are playing a crucial role in this development. Pipelines are needed not just to gather, transport and distribute the gas, but also to connect LNG import and export terminals, which are mushrooming around the globe. Pipeline-related industries are, therefore, likely to benefit from this process. Steel pipe coating is likely to be among the top beneficiaries: as new pipelines tend to operate under harsher conditions in terms of temperature, pressure and external environment, coating is becoming more demanding, more sophisticated and hence more valuable.

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External coatings | Russia

Andrew Chalov provides an insight into the coating and rehabilitation

technologies in use in the demanding Russian oil & gas pipeline sector

More than 90% of Russia’s 260,000km oil and gas

industry pipeline network is controlled by two compa-

nies , Gazprom and Transneft. Gazprom owns Russia’s

unifi ed gas supply system - including gas extraction,

processing, transmission, storage and distribution

activities – and operates some 168,000km of pipelines,

around two thirds of the total. Transneft’s main activity

is in transportation of oil and petroleum products – it

handles more than 90% of all the oil produced in

Russia. The company operates a total of 73,000km of

long distance pipelines, comprised of 54,000km of oil

trunk lines and 19,000km of petroleum product

pipelines. All of the other operators in Russia combined

account for just 19,000km of pipelines.

As might be expected, given the scale of their

networks, Gazprom and Transneft play key roles in

determining the factory and fi eld-applied coating

technologies used in Russia, which due to its extreme

climatic conditions is also a highly demanding market

for the coating industry.

The vast majority of the factory-applied coatings

used in Russia are employed for onshore pipelines. A

number of different coating systems are used, includ-

ing: fusion bonded epoxy (FBE); three layer polypropyl-

ene (3LPP); heat shrinkable tapes with hotmelt

adhesive layer (no primer); and three layer polyethylene

with primer (3LPE).

Both FBE and 3LPP coatings are sensitive to the low

temperatures experienced during Russian winters.

Some FBE coated pipe is used but it is restricted largely

to heat-insulated applications; onshore application of

3LPP in Russia is mostly in pipelines operating at high

temperatures. Heat shrinkable tapes are used in some

small production plants but this is mostly for small

diameter pipes produced at low quantities. As a

consequence, the factory-applied coating market in

Russia for onshore pipes is dominated by 3LPE.

As oil and gas extraction moves into Russia’s high

north and Arctic Circle regions there is a growing

demand for heat-insulated pipelines, either buried or

laid above ground (permafrost geographies frequently

make burying a pipeline impractical). Rosneft’s 560km

Vankor oilfi eld pipeline, for example, includes 200km of

above ground heat-insulated pipe (diameter 32 and

40-inch). Two heat-insulated projects are currently in

construction; Transneft’s 490km Zapolarye-Purpe crude

trunkline (30% of which is buried) and Novatec’s 300km

Main image:

Demand for

heat-insulated

pipelines is

growing in

Russia as

producers

move further

into the

country’s

northern

regions

External coatings forpipelines in Russia


Russia | External coatings

Yarudeiskoye fi eld gas pipeline.

For both buried and overground heat-insulat-

ed pipelines, 3LPE is the preferred coating

technology together with a factory-applied

insulation layer of PU foam. The

insulation is typically protected with an

outer layer of zinc galvanized steel

(with a 3LPE coating applied to the zinc

galvanized steel for underground

applications).

Offshore pipelines are estimated to

account for less than 1% of the total

Russian oil and gas pipeline sector. The

best known are the two 1,200km Nord Stream

pipelines under the Baltic Sea, and the 400km

section of the Blue Stream and 160km section of the

Dzhubga – Lazarevskoye – Sochi pipelines under the

Black Sea. 3LPP is the preferred coating solution for

offshore applications in Russia.

Field-applied coatings in use in Russia include hot

and cold applied polymer bituminous coatings (which

will be discussed later in this article), butyl rubber

tapes (no longer used by either Gazprom or Transneft

but still employed by some smaller companies), and

liquid coatings such as FBE and PU.

With 3LPE coatings dominating the Russian oil and

gas pipeline sector, it is little surprise that the main

girth weld protection option is heat-shrinkable 3LPE

sleeves. A limited, and declining, amount of mastic-

backed PE sleeving is also used, while some heat-insu-

lated pipe girth protection systems combine 3LPE with

a PU layer and coated zinc steel external protection.

The greater part of Russia’s oil and gas pipeline

network was constructed during the 1960s, 1970s and

1980s. It is estimated, for example, that one third of the

country’s oil trunkline network is between 20 and 30

years old, around one third older than 30 years and only

one third is younger than 20 years. In the gas sector,

Gazprom’s data shows just 25% of its gas trunkline (by

length) is less than 20 years old while 38% is more than

30 years old. As a result, both the major network

operators are investing considerable sums in pipeline

repair and maintenance programmes; in 2012 Gazprom

allocated RUB23.6bn (€590m) in upgrading its gas

transmission network.

Gazprom will replace coatings in the fi eld where the

protective function has been impaired by damage but

the underlying steel is in good condition. The pipeline

will usually remain in operation during the repair

process, although operating pressures are reduced over

the repair period. A typical replacement will use a hot

applied coating process comprising: excavation of the

pipe; removal of the old coating; cleaning of the metal

surface, application of bituminous primer; application

of hot glass fi bre-containing mastic; application of a top

layer of crosslinked PE tape; reburial of the pipe.

Hot coating repairs can be made at a rate of between

300m and 700m per shift, depending on the pipe

diameter. It is Gazprom’s most commonly used in-fi eld

repair method but cannot be applied in all situations - it

cannot be used on pipes running at a high inclination,

for example. In such cases, slower cold applied

methods are used (cold application takes around twice

as long per linear metre).

Gazprom’s cold application method follows the same

process up to the point of primer application. However,

the hot applied mastic is substituted with a cold-applied

glass fi bre reinforced mastic tape installed by winding

with a 50% overlap and topped with a mastic-coated PE

tape.

These in-fi eld coating repair processes are defi ned

by the Gazprom’s VNIIGAZ technical institute and have

been in use in Russia for around a decade. It is estimat-

ed that Gazprom reinsulates around 700km of gas

pipeline each year, mostly 48 and 56-inch diameters.

Looking specifi cally at Transneft’s oil trunkline

For both buried and overground heat-insulat-

ed pipelines, 3LPE is the preferred coating

technology together with a factory-applied

best known are the two 1,200km Nord Stream

pipelines under the Baltic Sea, and the 400km

section of the Blue Stream and 160km section of the

<10 years13.2%

<11-20 years12.1%

<21-30 years36.7%

<30 years38.0%

Age of Gazprom gas trunklines (%)

Source: Gazprom

Heat shrikable

3LPE sleeves

are the most

common girth

weld protection

option in use in

Russia

External coatings | Russia

pipeline repair processes, the company will in most

cases – as much as 90% - replace damaged sections

with new pipe with a factory-applied coating. However,

it also carries out some in-fi eld coating repair using

both hot and cold application techniques (developed

within its own institute).

Transneft’s hot applied coating process is very

similar to that used by Gazprom, differing most

signifi cantly in not using glass fi bre in the hot applied

mastic. Its cold applied method uses a different coating

system comprising a bituminous primer, glass fi bre-

free mastic tape, non-crosslinked polymer tape with

mastic layer, and a fi nal top layer of polymer tape with a

butyl rubber adhesive.

Last year, the Russian government published a

document outlining planned investments in the

country’s oil and gas transport infrastructure “Territo-

rial planning scheme of the Russian Federation in the

fi eld of federal transportation (in terms of pipeline

transport)”. It includes gas, oil and petroleum product

trunklines, gas condensate pipelines, and gas distribu-

tion pipelines on Russian territory (so does not include

major cross-border projects such as South Stream).

Summing up the projects, the document shows a

potential 15,000km of new gas pipelines could come into

operation over the period from 2015 to 2030 (around

1,000km a year on average) while some 4,000km of oil

and petroleum product pipelines may begin operation

over the period to 2018 (around 800km/year).

Pipeline projects in Russia are large and there are

plenty of them. There is also growing investment in

repair and replacement of existing pipelines. As a result,

suppliers of both factory and fi eld-applied coatings /raw

materials, as well as girth weld protection systems, can

look forward to continuing demand for their products.

About the author:Andrew Chalov is deputy general manager foreign trade

at Russian heat shrinkable corrosion protection

products manufacturer TIAL. His role at the company

includes market research, pricing policy development,

international certifi cation, and export sales manage-

ment. This article is based on his own analysis of the

Russian market.

TIAL claims to be one of the largest manufac-

turers of heat shrinkable corrosion protec-

tion coatings with a production capacity of

300 tonnes a month. The company’s

products carry international certifi cation.

Aside from its domestic sales, it supplies to

a growing number of export customers.

� www.tial.ru

Russia’s oil and gas pipeline network extends to some 260,000km

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conference preview | Field Joint Coating 2014

AMI’s fi rst Field Joint Coating conference

takes place in Germany in September, providing

a meeting and networking point for all

involved in the fi eld-applied coating supply

chain. We take a closer look at the event

The fi rst Field Joint Coating conference will be held in

Dusseldorf, Germany, on 2-4 September this year.

Organised by Applied Market Information (AMI) and

supported by Pipeline Coating magazine, this brand

new global conference focuses exclusively on fi eld-

applied coating solutions for steel pipelines.

Field Joint Coating 2014 is a development of AMI’s

highly successful Pipeline Coating conference, which

was held for the sixth time in Vienna, Austria, in

February. The new event will be chaired by Noru Tsalic,

senior vice president at AMI Consulting, chairman and

driving force behind the Pipeline Coating conference,

and author of AMI’s respected steel pipe coating market

study (Steel Pipe Coating – The Global Market).

“Pipelines are only as reliable as their weakest

point,” says Tsalic. “While line pipe is typically coated in

specialised plants under carefully controlled process

conditions, joints and rehabilitation work has to be

coated in the fi eld. This poses a whole array of addi-

tional challenges.”

The new conference, which is sponsored by Denso,

BASF and TIAL and is booking quickly, examines all

forms of fi eld applied coatings, including fi eld joint

protection, damage repair, and in-fi eld coating rehabili-

tation.

“Our high level speakers will provide expert insight

into coating selection and application. Which solution is

most suitable for each situation? How do they measure

up in terms of compatibility with the parent coating?

How easy are they to apply under real fi eld conditions?

What are the main performance and cost related

issues? All of these important questions will be

addressed,” says Tsalic.

Like AMI’s Pipeline Coating conference, Field Joint

Coating 2014 will also include an exhibition area (only

open to conference attendees) where delegates can

network with and learn from exhibitors in a relaxed and

informal atmosphere.

The high level conference programme covers

onshore and offshore solutions, design, testing,

certifi cation and application of the full range of

fi eld-applied coatings. In this article we take a look at

the programme content and speakers.

Offshore marketsNoru Tsalic will open the conference with a review of

the global fi eld-applied coatings market touching on

some of the key commercial and technical areas. The

focus will then turn to offshore applications, with the

fi rst presentation in this session given by Bruno Cunha,

equipment engineer with Petrobras in Brazil. His paper

will look at fi eld joint coating solutions for use in

pre-salt areas offshore of Brazil at ultra-deep depths of

7,000m. It is a challenging environment that is expected

to account for more than half of the company’s oil

production by 2018.

In-fi eld

application of a

tape-based

outer wrap.

Image: Denso

GmbH

Exploring FJC innovations


Field Joint Coating 2014 | conference preview

The development of a new solid polyurethane fi eld

joint coating material for application on subsea

pipelines will be explained in a joint presentation given

by Technip USA principal coatings engineer Roberto Del

Callejo Vargas and Dow Chemical Services UK offshore

coatings specialist Dave Parker. This will be followed by

discussion of a novel solution for improved offshore

pipeline fi eld joints given by Paul J Kleinen, vice

president engineering and technology with Bredero

Shaw in the US.

Design, testing, certifi cation and validation are key

elements in the development of fi eld-applied coatings.

Dr Philippe Thibaux, technical manager at OCAS in

Belgium will present an analysis of design validation

carried out on fi eld-applied spacers used in a natural

gas transmission pipeline project. His presentation is

co-authored with Florenc Cochard, technical manager

at Eurpec Pipecoatings France, and Sylvain Cozzolino,

study engineer at GRTGaz in France.

Coating selection for fi eld joints on buried steel

pipelines will be explored by Ali Fazlinejad, general

manager of Tolerant Coating Co of Turkey, while Dr

Amal Al-Borno, president of Canada’s Charter Coating

Service (2000) will explain her “3-Rs” of fi eld joint

coating – reality, repair and review.

Specifi cation of pipeline coatings will be discussed by

Dinko Cudic, responsible for business development and

offshore engineering at Stopaq Seal for Life Industries.

His presentation will look at how design criteria can be

brought in to the specifi cation development process. A

case study of abrasion testing on a glass fi bre thrust

bore coating will be presented by Tim Mally, senior

project engineer at Citadel Technologies in the US.

Coating innovationsLuc Perrad, manager of Polyguard representative

ExParTech, will speak about the advantages of selecting

non-shielding fi eld-applied coatings in terms of

corrosion protection. While Caio Santo Mauro and Andre

Koebsch, commercial manager and consultant

respectively at Brazil-based Polikote, will detail a new

polyurea hybrid joint coating material.

Long term performance data covering applications

for advanced three-ply tape coating systems will be

discussed by Denso Germany director of sales pipelines

international Michael Schad. And a composite pipe

repair system proven to extend pipeline lifetime by up to

20 years will be detailed by Henkel market development

manager for western Europe Bernd Hammer.

Akzo Nobel Powder Coatings global RD&I technology

manager Dr Volker Börschel will speak about the

company’s latest developments in LAT fi eld joint powder

coatings for fast application onto temperature sensitive

steel pipe at the conference.

The discussion on coating materials will be rounded

off with a presentation on multi-component liquid

coatings for external girth weld protection by Ian

Robinson, division scientist electrical markets infra-

structure at 3M UK, while Trenton Europe sales director

Philibert de Bonnafos will speak about the use of

wax-based tapes.

Application methodsThe fi nal session of the conference will look specifi cally

at application of coatings in the fi eld. Canusa-CPS UK

EAR business development manager Peter Boyce will

open the session with a review of some of the latest

advances in fi eld joint coating technology. Dr Sidney A

Taylor, president of France-based Incal Pipeline

Rehabilitation, will explain the role of fl ow rate control

in liquid fi eld joint coating applications.

Matthew Green, international sales manager at NRI

in the US, will explore protection options to prevent fi eld

joint coating failures and pull-back during horizontal

direction drilling, while Plascoat Systems technical

business development manager Thomas Bied-Charre-

ton will explain some best practice examples for

successful application of fl ame sprayed coatings.

For more information:Organised by AMI, Field Joint Coating 2014 takes place

in Dusseldorf, Germany, on 2-4 September 2014. To fi nd

out more about attending, exhibiting or sponsoring the

event, contact Becca Utteridge, Tel: +44 (0)117 314 8111,

Email: [email protected] (registrations taken before

18 July 2014 qualify for a €100 booking discount).

Alternatively, visit: http://bit.ly/FJC2014

Developed

from AMI’s

successful

Pipeline

Coating

conference

(pictured left),

Field Joint

Coating 2014 is

attracting

delegates from

across the

entire fi eld-

applied coating

supply chain


products | Update

Osborn adds 144-knot cut-back brush

cleaning

nORSOK compliant PeeK from Solvay

new option for 3lPO pipe joints

PeeK

cOatingS

POlyOlS

Industrial brush maker

Osborn has announced

availability in North America

of its 114-knot cut-back

brush for angled removal of

three or more layers of

coating from pipe ends.

The company says it

worked with leading

machine makers to develop

the new brushes, which are

heavy duty products

designed for fast and cost

effective removal of pipeline

coatings by combining pipe

edge cleaning, coating

removal and angle grinding

in one step.

The company says the

brush uses ultra-high

density AB wire and feature

a larger than normal

diameter with more knots

than competitive products

on the North American

market.

❙ www.osborn.com

applications including but not

limited to bearings, seals,

and back-up rings.

Ketron PEEK shapes have

proven superior performance

in NORSOK M-710 sour

single-phase aging tests at

high hydrogen sulfide (H2S)

levels. In addition, Ketron

shapes have met NORSOK

M-710 multi-phase testing

requirements.

❙ www.solvay.com

Ultra Perform Z-2 F Poly is a

new solvent-free repair filler

from Germany’s Ultra Perform

Coatings that is said to be

formulated to provide the high

levels of adhesion to PE and

PP required in pipe joint

reinstatement applications.

The new product contains a

special adhesive promoter that

allows it to bond with the

polyolefin surface without the

need for pre-treatments,

according to the company. It

also incorporates a high

modulus fibre reinforcement

offering temperature resist-

ance up to 250˚C and tear

strength of 500 N/mm2.

According to Ultra Perform

Coatings, which is a sister com-

pany to coatings maker

Ceramic Polymer, the Z-2 F PO

filler can provide an effective

alternative to the typical epoxy

primer and heat shrink sleeve

protection system used in

weld joint cut-back areas.

❙ www.ultra-perform.de

Perstorp promotes its capa polyolsPerstorp claims that its Capa 3050 and 3091 polyols

are a good option for the formulation of high

performance protective polyurethane (PU) coatings

for pipeline products. The two Capa grades are

formulated to provide high flexibility and good

chemical resistance. Both are low VOC products.

❙ www.perstorp.com

Solvay Specialty Polymers has

announced that stock shapes

made of its KetaSpire KT-820

polyetheretherketone (PEEK)

polymer have achieved

NORSOK M-710 compliance

for use in highly demanding oil

and gas applications.

The ultra-high performance

material is one of the NORSOK

M-710 compliant resins used

by Quadrant Engineering

Plastic Products (EPP) to

produce its Ketron PEEK stock

shapes.

“With down-hole operations

in the oil and gas industry

witnessing higher tempera-

tures and more severe

environmental conditions,

there is a growing trend toward

stricter requirements and the

need for even greater material

performance and durability,”

says Shayel Ahmed, sales

development manager for

Spire Ultra Polymers for Solvay

Specialty Polymers.

KetaSpire PEEK delivers

good chemical and abrasion

resistance combined with

exceptional heat resistance

and strength, making it an

ideal choice in extreme oil and

gas environments. Parts

manufactured from Ketron

PEEK, based on KetaSpire

PEEK, are currently being used

in a range of oil and gas

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Pipeline Coating – NovemberThe November edition of Pipeline Coating examines global energy markets, internal fl ow coating for gas pipelines, a major refurbishment project in Iran, plus details of the Ethylene Pipeline South project.

� Click here to view

Pipe and Profi le – Mar/AprThe March/April edition of Pipe and Profi le extrusion looks at the latest developments in pipe grade polyolefi ns and reviews the titanium dioxide pigment market. This issue also previews the Chinaplas show and reports on the latest Euromap machinery statistics and forecasts.


Film and Sheet – AprilThe April issue of Film and

Sheet Extrusion contains articles on new ways to recover agricultural fi lm, developments

in recycled PET sheet, the latest fl at die designs, and

European machinery trends. It also has highlights from

Interpack 2014.


Compounding World - MayThe latest edition of

Compounding World looks at new developments in

photoluminescent pigments, and reviews the latest innovations in

additives for controlling electrical conductivity. Plus, an

essential update on REACH and the newest clarifi er and

nucleator products.


Pipeline Coating – FebruaryThe February edition of Pipeline

Coating examines the latest global energy forecasts and

reviews prospects for pipeline investment in North America. Plus, a look at Shell’s Stones deepwater FPSO project and

details of the fi rst NordStream internal inspection.


Injection World – MayThe May edition of Injection World magazine reviews the latest developments in the plastic closure market. It also looks at the latest innovations in high temperature plastics and new temperature control solutions. PLUS, news from the Chinaplas trade show.


Compounding World - MayThe latest edition of

Compounding World looks at new developments in

photoluminescent pigments, and reviews the latest innovations in

additives for controlling electrical conductivity. Plus, an

essential update on REACH and the newest clarifi er and

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PIPELINE INTEGRITY HANDBOOK: RISK MANAGEMENT AND EVALUATION

CORROSION CONTROL IN THEOIL AND GAS INDUSTRY

2013, by Guo, Song & Ghalambor,€66.00 or £55.00 or $88.00

New edition. Revised and expanded to include principles of condition based maintenance.

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2013, By Papavinasam,€135.00 or £110.00 or $180.00

New. Tools and methods for corrosion management in all industry segments.


2013, by Singh,€93.00 or £77.00 or $125.00

New. A practical day-to-day reference ranging from risk assessment to repair.


2013, by Beieler,€67.00 or £56.00 or $90.00

New. Manual of practice covering 11 types of pipe and 20 key characteristics.


2014, by Schutze,€150.00 or £125.00 or $200.00

New. Essential guidance for scientists and engineers from a corrosion expert.


2013, by Ehrenstein & Pongratz,€500.00 or £417.00 or $667.00

1460 pages. Encompassing chemical, mechanical, thermal and biological effects, weathering and radiation.

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Tel: +44 (0)117 924 9442 Fax: +44 (0)117 311 1534 email: [email protected] prices are correct at the time of publication but may be subject to change.

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OFFSHORE PIPELINES: DESIGN, INSTALLATION, AND MAINTENANCE, 2ND EDITION

1460

PAGES

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Our selection of the latest titles and essential reference works for the pipeline coating industry

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