With the increasing demand for renewable energy sources, the traditional infrastructure that has supported our energy supply is experiencing a significant transformation. Despite this “energy transition”, top-notch manufacturing and engineering remain crucial. The oil and gas industry continues to excel in these areas.
However, is there an untapped opportunity that the industry may be missing?
As per a market report published by SkyQuest in February 2023, the global oil and gas fabrication market had a valuation of 5.1 billion USD in 2021, which is expected to increase to 17.91 USD billion by 2028.
The oil and gas fabrication market in North America is likely to experience substantial growth due to the escalating demand for crude oil and refined products, including natural gas. As natural gas is a cost-effective fossil fuel that is projected to have a high demand in the near future, the global oil and gas pipeline fabrication and construction market is anticipated to expand as the natural gas pipeline networks grow in line with the consumption growth.
SkyQuest’s research further indicates a steady rise in the global demand for natural gas, with an estimated annual consumption of 4,626 billion cubic meters by 2026. This demand is set to propel the growth and development of the oil and gas fabrication market significantly. All these factors indicate that the fabrication processes in oil and gas need to continue evolving to meet the new demands of the energy transition and other global events that impact the industry. With an enormous potential sum of 18 billion USD on the table, those within the industry must stay up-to-date with the market’s developments, trends, and opportunities.
As a specialist fabricator of large pressure vessels, we have had the opportunity to utilize the best practices and techniques from the nuclear engineering sector and apply them to other industries, including the oil and gas sector which has been a mainstay of our work over the decades.
The IP and processes that we have assimilated from working within the highly regulated nuclear sector have directly shaped our work in other industries, such as water utility, chemicals manufacturing, as well as energy. And it’s not only our own company undergoing this, our experience and observations of this are consistent with other suppliers across the Tier 2 and Tier 3 nuclear supply chain.
Lessons in quality assurance
First and foremost, the civil nuclear sector is governed by some of the most stringent and rigorous documentation and processes of any industry. It goes without saying that the implications of a serious accident in the sector are significantly higher than in others, and for that reason, the tried and tested methodologies deployed here can be usefully cross-pollinated, especially where safety and risk are critical considerations as they are too in oil and gas.
Extensive quality plans and inspection and test plans play a crucial role in shaping various aspects of the manufacturing workflow. In my opinion, individuals engaged in manufacturing and engineering in the oil and gas sector stand to benefit significantly by incorporating some of these concepts into their own processes, starting from design to inspection and quality control.
In the nuclear sector, for example, there is a highly developed focus on identifying counterfeit, fraudulent, or suspect (CFSI) items. Proving and validating their provenance is critical. This is not solely about potential problems with purchased materials but also maintaining a stringent level of traceability throughout the entire manufacturing journey. For instance, there should be documented evidence that the material legitimately procured is still the same material from the same source, in case it needs to be divided across different components.
To mitigate the risk of CFSI, both the civil nuclear and oil and gas industries rely on strict materials sourcing and quality control protocols. This includes the use of trusted suppliers, strict inspections, and detailed documentation of materials and components. Furthermore, they must be able to identify these items using a variety of methods such as physical and chemical testing, electronic tracking and traceability, and certification programs such as CFSI, BS EN 4872, and other global certifications.
The Health and Safety Agenda
Components in oil and gas production and exploration are not without their own strictly controlled quality and safety requirements, not just in the protection of valuable resources but in terms of the colossal risk to the environment in the event of a major leak or breakdown. Controlled welding and monitoring techniques are vital in meeting these uncompromising standards. This includes the manufacture of transmission pipelines, storage vessels, or vessels that need to withstand immense pressures, temperatures, or weights, such as those found on and offshore from rigs and platforms to gas processing plants. Additionally, structures and equipment used in the industry must have a long lifespan, welding being critical to durability and resilience.
Having said this, it is also my experience that both the nuclear and oil and gas sectors are still relatively slow at embracing new technologies, such as modern methods of welding and fabrication, like synergic MIG welding which is proven in so many other sectors. It has a relatively low defect rate and could I believe be employed more widely in oil and gas for the fabrication and manufacture of pressure vessels, heat exchanges and columns within refineries and exploration platforms. However, it all comes back to safety, and with change comes perceived increased risk.
Speed is crucial in industries that involve production. This is especially true in oil and gas where minutes of production downtime are measured in the millions potentially. It is imperative that sufficient time is given for the advance preparation of documentation prior to manufacturing. Oil and gas suppliers should expect the process to be iterative and precise with no room for misinterpretation or vagueness.
Typically, civil nuclear work involves more inspection hold and witness points than oil and gas work. However, both industries share the same ultimate goal, and effective preparation and documentation management should be established from the outset to increase workflow efficiencies and, ultimately, profitability.
In the nuclear industry, innovation is a constant requirement, especially to expedite traditionally slow processes due to the need for traceability and safety auditing. Even minor improvements can have a significant impact on the bottom line for all tiers of the supply chain, especially for Tier 2 and 3. In addition to novel methodologies, there is a demand for new materials such as yttrium in the nuclear fusion sector.
Similarly, there is a need to manufacture components more rapidly and economically while maintaining quality. Sharing these lessons with other manufacturing industries can benefit global engineering, particularly during a period of significant change in energy production and consumption, with exponential market growth predicted.