New Survey Shows Valves Still Top the Equipment Agenda

Peter Everett, Chief Executive of H.S. Pipequipment, discusses the results of a new industry survey which highlights the procurement challenges associated with valves as well as the economic pressures faced by oil and gas assets and petrochemical plants.

As a leading equipment supplier, we see the trends, issues and pressures encountered in the industry on a daily basis as we help to tackle the problems faced by our customers. While this valuable insight has allowed us to stay responsive to their needs, earlier this year we conducted a survey with the aim of achieving an even clearer picture of the challenges – both old and new – that are currently being faced in the oil, gas and petrochemical industry.

The Survey
The in-depth questionnaire, which was sent to a variety of key industry workers such as engineers, buyers, materials controllers and directors covered essential topics such as the challenges associated with essential equipment, the effects of the economic downturn and the vital, yet lengthy processes still causing costly delays during the procurement process.

The results showed that valves have continued to remain a top priority subject for petrochemical plants and onshore and offshore oil and gas assets. 34 per cent of those surveyed said that valve related issues caused them significant challenges, with a similar number (27%) citing other equipment including pumps, compressors and other rotating machinery as also being problematic.

The Valve Specification Puzzle

The fact that valves were found to be the most challenging piece of equipment may come as no surprise to those who deal with this type of apparatus on a day-to-day basis, yet when you consider that individual valve-types are manufactured to a multitude of different specifications, it is clear that the significant headaches that they cause during the procurement process are vastly disproportionate to their actual monetary value.

Add to this mix that any individual plant may have five or six of the same valve type that have been manufactured to different specifications and it’s clear why even more time is spent getting clarification of exactly what part is needed. Additionally, in older petrochemical plants, a valve can last up to 20 years, so it is easy to see why it is very difficult to track down the original paperwork and specifications which the manufacturer might have archived long ago.

With a profusion of subtly different variants, each ball, gate or globe valve can have hundreds of different combinations of components and materials. The survey showed the effect that this complexity has during the procurement process, with as many as 55 per cent of respondents saying that identifying the correct product/specifications was the most time-consuming part of the procurement process in petrochemical plants. In the oil and gas industry, the biggest delays came from the engineering review of quotations with 37% of respondents saying this held up the process the most.

Overseas Trends and Home Challenges

Another issue raised by the survey included the trend towards the manufacture of valves in the Far East. While 45 per cent of respondents said that their organisations never procure valves made in the region, 56 per cent believe that, in future, valve manufacture is likely to shift to the Far East, largely for reasons of cost.

During site shutdowns, an unexpected requirement for essential components was the most common problem reported. An overwhelming 79 per cent of respondents in the survey said it was the most likely factor to cause difficulties, with 26 per cent reporting that a lack of out-of-hours support from the supply chain contributed to the problem.

From our perspective, these results put even greater emphasis on the role of the supplier, which must be able to offer an extensive inventory and access to fast track manufacturing in order to respond to these essential needs more quickly.

Economic Pressures

The survey also allowed us to fully explore the effects of the uncertain financial climate experienced in the last couple of years, with the results clearly showing that most of us have been affected in one form or another. Despite good progressive recovery in many sectors, the survey showed that many of these economic challenges still remain. 29 per cent of survey respondents said that they had seen reduced production and a similar number reported movement away from purchasing new equipment.

Other effects included the postponement of shutdowns (24%) and staff cuts (29%). 17 per cent also said their hours had been reduced. Overall, 45 per cent of those surveyed said that there was now a greater need to do more with fewer resources. When it came to sourcing equipment, 50 per cent of plants and rigs said that they kept limited or no replacement inventory on site, with 63 per cent saying that this was because they were trying to keep costs down.

How Can We Help?

As the procurement process often includes mandatory documentation and the inspection of valves and their sub components, it is essential that, however complex, suppliers can be relied on to attend to all the technical and commercial details, provide the necessary paperwork and keep their promises when fulfilling an order under extreme time pressures.

With continuing financial pressures still being felt across the industry, more and more of those involved in the process are now turning to equipment suppliers for support; particularly those with a strong engineering background. Cost and quality have always been major influences when selecting an equipment supplier yet, according to the survey, many users are also seeking a whole range of additional skills and qualities.

In particular, responsiveness (66%), product availability (72%), consistent reliability (63%), technical expertise (63%), and providing the proper documentation (69%) were also found to be extremely desirable virtues.

Whilst we cannot change the fact that essential equipment such as valves are produced to a multitude of varying specifications - and that this is unlikely to change - it is clear that equipment suppliers with a greater level of technical understanding and responsiveness are in a better position to solve problems quickly and, in doing so, help to save both time and money.

HS Pipequipment, Tel: 01635 201329
Website: www.hsp.co.uk

Published: 11th August 2010