Five Big Opportunities for Pipe and Tank Fabricators

Creative suppliers can turn marketplace challenges into business opportunities.

Suppliers of FRP pipes and tanks agree that the past year has been comparatively slow when it comes to new projects. Few of the major industrial manufacturers who so often demand composite-lined tanks or FRP pipes seem to be undertaking new construction, and in some market segments replacements are slow as well. But a number of indicators suggest that now is the time for fabricators to focus attention on educating end users across several industries about the benefits of FRP compared to alternative materials, as business stands poised to pick up. A 2015 report from Research and Markets forecasts a modest 3.1 percent increase in the global FRP pipe market from 2015 to 2020. Demand in certain industries – including water/wastewater, chemical/industrial and onshore oil and gas – is expected to drive this growth. For the optimistic, every challenge presents an opportunity. Fabricators facing the five challenges listed below may find themselves well-situated for opportunities in the coming year. Challenge #1: Chemical M&A activity has slowed major construction. Opportunity: Need grows for pipe and tank maintenance and replacements. “In the chemicals industry, everything has a lifespan,” says John Istre, quality control manager for Resin Systems Inc. in Sulpher, La. That holds true for the pipes currently serving chemical manufacturers. As a result, replacement work is an ongoing need. In a recent presentation for NACE International, John Busel, vice president of ACMA’s Composites Growth Initiative, noted that in 2014, processing industries, including the chemical industry, saw a direct cost of corrosion as high as $67 billion. It’s one reason that many facilities seem to be focusing on repairs. Tim Morton, production manager for FiberSystems in Dayton, Ohio, sees this emphasis on repairs versus new construction as a sign of the economic times. “We’re doing replacement fittings or pipes, and the same with tanks,” Morton says. “Not a whole lot of tanks fail, but I have a tremendous amount of work refurbishing tanks.” For Istre, 2016 has been slow largely as a result of high turnover in the chemical industry. “One of the big things that’s been running the market right now has been the changing of the guard – companies buying out plants,” he says. In fact, A.T. Kearney, a global management consulting firm, notes in its 2016 Chemicals Executive M&A report that a number of megadeals have put 2016 on track as a record year for chemical mergers and acquisitions, potentially twice as high as already-high 2015 levels of activity. The resulting challenge, Istre says, is that few companies are spending money on additions or refurbishments as an air of uncertainty around future acquisitions continues. “But I think it’s going to settle down a little bit, back to almost normal,” he predicts. With doubt about future ownership, many of these chemical companies have “let a lot of maintenance go,” Istre adds. As activity settles back to normal, new owners assessing their portfolio may be interested in pursuing infrastructure improvements in the year ahead. If this is the case, Morton predicts that there may be plenty of opportunity for smaller fabricators. “With the [down] economy, the big shops aren’t willing to set up special tooling to meet their customers’ [repair] needs. The customers are really in a jam, and that’s our niche,” Morton says. Challenge #2: Municipalities are unsure of solutions for failing pipes. Opportunity: Demand increased for corrosion-resistant piping for water infrastructure improvements. It’s not every day that the pipe market finds itself in the news, but in the last year failing water systems have made pipe improvements very much a topic of discussion. Busel notes that the drinking water, sewer treatment and sewer sectors saw direct costs of corrosion exceeding that of processing industries, coming in at $68 billion in 2014. One of the most talked-about failures came when the city of Flint, Mich., switched its water supply in 2014 to the Flint River. High levels of chlorine, which reacted with high levels of bacteria in the river, ultimately corroded the city’s lead pipes. Subsequently, lead seeped into the drinking water supply, causing widespread lead poisoning. By the time the city returned to its original water supplier late in 2015, it was too late to reverse the damage to the pipes. Flint may be the best known example of failing infrastructure, but it’s not the only one. In early 2016, a concrete water pipeline servicing Silicone Valley failed, leading to $20 million in repairs. As a result of these failures, the U.S. Senate introduced the Water Resources Development Act of 2016 to authorize $9 billion in water infrastructure improvements, including $220 million specifically for Flint, Mich., and other cities that may have contaminated water supplies. The bill passed the U.S. Senate on September 15 on its way to the House. If signed into law, it promises to drive broad water and sewer infrastructure replacements, presenting opportunities for suppliers of corrosion-resistant FRP pipes. “We promote FRP composite pipe for all water systems, but adoption of the material has been somewhat slow due to municipal budget restrictions,” Morton says. The availability of funding could help municipalities, although Morton notes that there are built-in savings with FRP piping. “FRP is a higher premium upfront, but the advantages quickly give customers a return on investment. Lighter weight reduces field installation costs, and corrosion resistance means minimal maintenance and a long service life. When you do the math, the savings counties can realize with FRP composites versus replacing pipe again and again are significant.” Among other examples, officials in Dayton turned to FiberSystems for a composite solution when five packed tower aeration systems installed in the late 1980s began to fail. The aeration systems are used to eliminate volatile organic compounds from ground water. “The spools were experiencing early failure,” Morton explains. “In addition to being able to rebuild the damaged sections, we also significantly extended the lifecycle of the structures.” Using a high-performance, high-temperature epoxy vinyl ester resin, the 12-inch diameter flanged reducing spools were filament wound and joined through adhesive welding. The spools were also coated with specialty UV-resistant polyurethane to provide the surfaces with corrosion resistance and protection for an improved cosmetic appearance. There’s another area of water infrastructure that is leading to increased demand for FRP piping and tanks, too. “While not a new application, the increase in seawater and brackish water desalination in the Americas has contributed to the growth of FRP piping and tank use in this market segment,” says Chaun Trenary, vice president of marketing and sales for Denali Inc., a Houston-based manufacturer of FRP tanks, pipes and related equipment. “We’re currently looking at several projects on the West Coast,” Morton says. “Large diameter, low-pressure FRP piping is best suited for above ground applications, but we’ve also provided continuous filament-wound FRP pipe and fittings for burial underground.” Challenge #3: Oil and gas industry hits new restrictions with move into more remote locations. Opportunity: FRP meets the pressure and weight needs of deep-sea applications. The report from Research and Markets indicates that onshore oil and gas is expected to emerge as the leading FRP pipe market by value and volume consumption, after chemical/industrial applications. The growth of oil and gas exploration activities, coupled with a boom in shale gas production in the onshore oil and gas industry, is expected to spur growth for this segment. Raymond Burke, product leader – flexible pipe, for Houston-based GE Oil & Gas, explains that given the massive cost of mounting an offshore drilling and construction campaign, oil companies concentrate on operating large, highly productive fields. This scale is pushing more wells into deeper and more remote locations. “One consequence of this trend is that floating production systems dominate new subsea developments, and flexible risers (the pipelines to hook the subsea production system up to floating platforms) become heavier as a consequence of depth,” Burke says. He notes that the industry seems to have reached a challenging point between roughly 5,000 and 6,500 feet deep where the contradictory metrics of pressure resistance, combined with an operational need for larger diameter pipe, requires more steel. But more steel means more weight, which increases the axial force near the riser hang-off, which in turn requires more steel, Burke explains. “Composite pipe resolves this technical tension by adding the optimal pressure resistance needed, without the associated weight penalty that traditional designs would incorporate,” he says. GE’s solution leaves the dynamic and highly-loaded components of flexible pipe unchanged. “Specifically, the tensile armor layers and the end fittings remain unchanged, allowing operators to retain and leverage their existing knowledge and understanding of these products,” Burke says.
[caption id="attachment_3922" align="alignleft" width="400"]fibersystems-corrosion-resistant-frp FiberSystems supplies its corrosion-resistant methacrylate epoxy FRP pipe to chemical manufacturers that need a high-performance alternative to alloys and specialty metals for projects with fire-retardant and explosion-resistant requirements. Photo Credit: FiberSystems[/caption] As he puts it, the challenge – and solution – is in making lighter, cheaper products that can reach deeper and safer than ever. And it is a significant challenge, given the tough environment. “Bear in mind just how critical the durability and robustness of these products is,” Burke says. “They will be installed into thousands of meters of turbulent seawater; attached to a highly dynamic platform; exposed to high pressures, wide temperature ranges, fluid surges, shut-downs and chemically aggressive well contents – and they are expected to function continuously, without intervention or maintenance for 20 or more years.” This means there is a very high qualification threshold, and a range of life-cycle and environmental testing must be completed and independently verified before a product can be operated subsea. It was a challenge that FiberSystems had to address when tasked with modifying a positive break tank on a potable water system aboard the world’s deepest offshore oil drilling and production platform. Shell Exploration & Production contracted Jacobs Engineering to oversee the modifications for the offshore platform in the Gulf of Mexico. The tank needed to let out gases trapped in the service line and let in seawater that would pass through the water makers that would turn it into drinking water. The tank needed to be corrosion-resistant, lightweight and low maintenance, which is what led the engineer to FRP. “One of the problems we had to solve was how to anchor a freestanding pipe on the inside of the tank,” says Dave Orr, production supervisor for FiberSystems, the tank manufacturer. “Fabricating the tank’s cradle and determining the best method for adhering the top dome to the main body of the tank was also challenging.” The main body of the tank, along with eight stubs and flanges, was filament wound using a high-performance grade of methacrylate epoxy resin pigmented gray. To meet a tight turnaround time, the fabricator used 113 yield fiberglass that allowed it to build tank walls up quickly – twice as fast as the thickest glass. The tank’s flat base and cradle also were filament wound. A hand lay-up process was used to fabricate the tank’s upper and lower domes, which were then bonded to the tank with adhesive. Strength was paramount for this application. The joints were butt-welded and wrapped for added strength, and the fabricator used a resin wax coating to seal interior layups, the freestanding pipe inside the tank and the exposed openings. The final product weighed 1,000 pounds and measured 11 feet, 8 inches tall with a 30-inch inside diameter. Challenge #4: Conservative companies are slow to adopt new solutions. Opportunity: Existing FRP solutions are poised to meet new demands. Burke notes that customers appreciate seeing products that meet their needs for lightweighting and corrosion resistance without the associated risk of brand-new technology. Even so, fabricators are constantly watching for the next innovation. He cites several improvements in materials, including these:
  • More robust polymers that can operate at higher temperatures and pressures
  • Stronger fibers to withstand harsh environments
  • Structural geometries and manufacturing methods to incorporate fibers and polymers in “unique and advantageous means,” such as pultrusion technologies
  • Incorporation of additional functionality into the pipe structure, such as fiber monitoring for operational monitoring
“These are all of great interest to us as we contemplate the next generation of composite pipe for offshore oil and gas production,” Burke says. Busel predicts that to better meet future demands in the chemicals and other processing industries, FRP fabricators will need to experiment with resins that can withstand higher temperatures. In certain industries, a little experimentation can be a big risk, points out Dan Naugle, general manager for Composites USA in North East, Md. “Big companies like Honeywell, DuPont, Dow Chemical, etc., are pretty conservative in that they approve certain resins, in certain products, with certain processes. If it works for them, they don’t want to change it because they are getting into an unknown,” Naugle says. In some cases, today’s needs can be met by taking a fresh look at how tried-and-true products can meet new applications. For example, Aram Mekjian, president of resin distributor Mektech Composites Inc. in Hillsdale, N.J., says that phenolic resins should be more closely considered in certain corrosive environments due to their heat-resistant properties. “Phenolic resin is a little more difficult to use – it requires heat to cure – but the big advantage over any of the other resins is the far superior fire, smoke and smoke toxicity properties,” Mekjian says. “Also, it has very good high-temperature resistance.” He adds that phenolic ducting passes Factory Mutual (FM) requirements. “Other polymers would require water sprinklers inside the duct to reduce flame spread and heat release, which would cause failure,” he says. Busel agrees that phenolic resins are a strong alternative for high-temperature applications. But, he adds, it all comes down to the application. “The debate goes on out there that fire-retardant resins are just as good as phenolics. Each has its own strengths,” he says. “We use phenolic resins, which are very good for sulfuric and hot hydrochloric acid – very good for hot acids,” Istre says. “But they’re not very good for caustics, so we have to watch the application.” And while the material does need to be processed differently than vinyl esters, Mekjian points out that even in the composites industry some misconceptions around phenolic processing may remain. “Some fabricators may still not know that phenolics can be processed via hand lay-up and filament winding,” he says. “Most still think phenolics are used in the form of prepreg used in autoclave.” Challenge #5: FRP is still an unknown for some markets. Opportunity: Targeted education can lead to a new generation of end users. For many conservative end users FRP is still a relatively new solution, at least compared to materials such as steel. As a result, customer education remains a critical business development tool. “A lot of companies aren’t aware of what FRP can do,” says Naugle. “There are some companies that have always used steel tanks or piping that have come to us and said, ‘Show us the advantages.’” Naugle is quick to point out benefits, including FRP’s ability to create custom shapes. For example, during building rehabilitations new pipes often have to go around existing pipes and other structures. “You can’t do that with steel duct; It just can’t be formed that way,” Naugle tells customers. “But with FRP, you can make custom pieces to fit in those areas.” Trenary points out today’s up-and-coming engineers are entering the market with a greater understanding of composites and, as a result, greater willingness to evaluate the material’s merits for specific projects and products. They don’t simply default to metal or concrete with a cursory consideration of composites. “This shift, although a longer term development, will likely result in significant further acceptance and standardization in the FRP composite corrosion market,” he says. Trenary finds the biggest challenge to growth for the corrosion-resistant FRP industry is its fragmentation. “While FRP has been successfully used in a wide range of markets for many decades, there still tends to be some significant differences among suppliers with regard to design practices and design capabilities,” he says. “In addition, it is often difficult for a customer or end user to identify a single published specification that they can rely upon for standardization.” For example, ASME RTP-1 is an FRP tank standard, but not all design variables allow use of the standard, says Trenary. Morton adds that in some instances, end users view FRP as an exotic choice that will solve any problem, and that’s a challenge that demands more education as well. When FRP is misapplied, its failure can present problems for the industry. “I had a customer call and ask for some piping that would haul sulfuric acid,” says Morton. “Unfortunately, FRP pipe is not the right material to use, although you can use an FRP tank to store sulfuric acid if it’s stored below ground because the ground acts like an insulator. So we find that there are still questions, and education needs to be given out there.” As Morton puts it, “Is FRP right for every job? No. But it’s right for a lot of them.” And the possibilities are increasing. Now it’s up to FRP suppliers to educate end users on how composite pipes and tanks can be the best choice for them.

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