Reaching new paradigms business

Reaching new paradigms of business

7:20 AM, 12th April 2018
Richard Gadd, Director – Sales & Business Development and Member of the Executive Management Board, TGE Gas Engineering GmbH
Richard Gadd, Director – Sales & Business Development and Member of the Executive Management Board, TGE Gas Engineering GmbH.

In an interview, Richard Gadd, Director – Sales & Business Development and Member of the Executive Management Board, TGE Gas Engineering GmbH with Chemical Today magazine discusses at length the changing dynamics of the EPC industry.

By Shivani Mody

Global trends in storage and terminals in petrochemicals/ chemical gases segment.

The key trends which we are currently experiencing can be summarized as:

Economies of Scale – our customers’ demands are progressively for larger facilities, exploiting flexibility in supply and seasonal feedstock price variations; acceptance of the new paradigm created from shale gas resources as reflected in feedstock availability and prices, and finally; the continuation of emerging market driven demand, with Asia remaining the strongest potential for new build-outs.

Trends in small-to-mid scale LNG production plants segment.

Small-to-mid scale LNG production brings in interest from many new localized investors, in most cases with a business model for which success is dependent upon ‘first-mover’ advantages. This often places the viability of projects within very tight investment budgets and the demand of fast-track delivery. This in turn leads to a high level of standardization in terms of technical solutions. In Russia, Asia and South America, the potential of small to mid-scale production remains high, especially for remote areas to take part in the LNG export business with low or no pipeline gas competition.

Potential for cryogenic systems and installations in Asia Pacific.

With growing petrochemical / chemical industry in Asia Pacific & India, there has been significant advancement for cryogenic systems and installations. Increasing focus on safety & reliability has led to a shift in cryogenic storages from single containment, steel / steel full containment to steel / concrete full containment storages.

Rising demand for methane gas and other natural gases in Asia.

Asia pacific and India are growing markets for petrochemical / chemical industry as major countries in this region are still developing economy. The average per capita consumption of polymers in India is 10 kg as compared to world average of 32 kg. And the 10-12 percent annual growth in consumption seen over the past decade is set to rise to 12-15 percent over the next decade. In terms of feedstock, India relies on naphtha for 50 percent of its feed, followed by 24 percent of propane & 22 percent of ethane. With tapering down of international gas price during past couple of years, natural gas is narrowing down the competitive price advantage of naphtha and likely to increase its share in the petrochemical feedstock.

Requirements of chemical manufacturers for gas production plants.

Typical requirements on gas production plants are safe and stable operations, high levels of availability over the entire plant life time, meeting the gas product specifications and low operational and maintenance costs. In the clear majority technical gases are liquefied for further storage and transport. For this purpose, but also to fulfill the required product specification for feeding downstream processes, the gas needs to be treated and purified prior to liquefaction. Generally, components like water, carbon dioxide, nitrogen, sulfur and aromatics must be removed to an acceptable limit. Depending on the downstream process requirements the product needs to be further purified. Educts in the chemical industry like Propylene and Ethylene have very high levels of purity. LNG and LPG being commonly used for combustion purpose allow a wider range of gas composition / product specification.

Gas plants in developed versus emerging markets.

As the developed markets have already mature and established gas plant infrastructure the majority of new requirements come for installations or modifications within existing facilities, so-called “Brownfield” projects, whereas new requirements in emerging markets have more tendency to be “Greenfield” projects. While local regulations need to be respected for each specific location the application of international codes and standards brings a greater homogeneity to the technical solutions which are employed.

Additionally, for the product demand, emerging markets are rapidly looking to establish similar end-product portfolios as developed markets offer, so again a greater on homogeneity on requirements and technical solutions is seen.

Role of IIOT and automation systems in process systems.

The potential for IIOT within process & control systems is vast. However, due to the high levels of safety, availability and reliability required within our cryogenic storage products ours is a very conservative industry and it will still take some time before this potential is fully embraced and implemented in general.

Insight into company’s Asia Pacific business.

At TGE we are looking for robust market growth to continue for petrochemicals / chemicals industry across this region. We have enjoyed sustained growth in the past 20 years mainly driven by markets such as China & Taiwan, though we do expect a shift in focus of growth areas, such as India, Bangladesh, Indonesia and Vietnam.

Meeting the demand for Syngas and derivatives in terms of EPC equipment requirements.

EPC for specialized facilities as for Syngas is very complex. Within the start of the project, the facility must be designed as per customer requirements allowing maximum equipment and plant availability and complying with site location requirements including but not limited to international codes and standards as well as local regulations for obtaining permits and technical capability. For these tasks, different engineering disciplines are working closely together to fix the design and to prepare the procurement activities for this specialized equipment.

This equipment needs to be designed for its purpose, fulfilling the codes and standards including environmental specification, it needs to be transportable and erected under the health and safety guidelines of TGE. This all needs close and continuous coordination of interfaces within design, procurement, delivery and construction disciplines where TGE is specialized as total solution provider to our customers.

Focus on R&D and innovation.

TGE follows two paths. We focus on investigating continuously on how added value can be brought to all customers within TGE’s existing product line portfolio.

Further we look for new customers and applications by continuously monitoring market trends to guide our development and to innovate our products. To share some examples, for customers which do not need fully tailor-made solutions, we developed standard plant design and execution concepts improving execution schedule and return of investment plans. Furthermore, we strongly believe in LNG as a future marine, truck and power generation fuel and have already adjusted our market offering accordingly.

Challenges faced by manufacturers in the gases EPC industry.

The challenges that we face for EPC business are not dissimilar to those faced by many industries today – to deliver cost-effective solutions in the shortest time frame while maintaining high levels of quality, environmental sensitivity and reliability.

The cornerstone for TGE in the EPC business is management of stakeholder risk, by meeting commitments, obligations and timely delivery of high value assets to our customers.

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