Leading automation and power technology group ABB Ltd (ABB) and Statoil ASA (STO) recently signed a $100 million Joint Industry Program (:JIP). The two industry behemoths will develop solutions for transmission, distribution and power conversion systems for subsea pumps and compressors. The program is expected to take five years to complete.
The scope of the JIP requires ABB to develop technologies for powering and controlling subsea pumps and gas compressors at a depth of 3000 meters. While ABB will focus on technological development, Statoil will lead the program and represent all the other oil companies who are participating and funding the program. In 2012, Statoil and ABB had conducted a detailed subsea power study and that forms the base for this program.
The equipment will be enclosed in pressure compensated tanks filled with liquids, which will be then tested under full pressure that the equipment will have to face at the targeted water depth. ABB will be providing detailed design with material and component report. It will conduct an extensive testing for the 36 kV distribution unit and a couple of variable speed drives for the pumps and gas-compressors.
There are various deepwater and subsea projects planned globally and especially in regions like Norwegian continental shelf and the Gulf of Mexico. This JIP would be vital development on the technological front for supporting these large-scale subsea projects by powering and controlling the pumps and the gas-compressors.
The program is expected to have greater recovery rates, which will not only improve the oil and gas resource utilization but will also reduce the costs; thereby leading to an increased production. This is because an efficient subsea power distribution technology can supply power to several electric loads through a single power cable.
Hence, this new technology is expected to save as much as $500 million by linking eight loads via a single cable to an infrastructure located 200 kms away. The remote oil and gas fields with limited access to the core infrastructure will be the primary beneficiaries as the JIP is expected to support a 100 megawatt electrical power transmission spreading over a distance of 600 Kms and the depth of 3000 meters.
ABB is a leading provider of integrated power and automation solutions for conventional and renewable power generation plants and water applications. The company’s extensive offerings include turnkey electrical, automation, instrumentation and control systems supported by a comprehensive service portfolio to optimize performance, reliability, and efficiency while minimizing environmental impact.
ABB currently has a Zacks Rank #4 (Sell). Other stocks worth considering at the moment are Rexnord Corp. (RXN),having aZacks Rank #1 (Strong Buy), and Smith (:AO) Corp. (AOS) that carries a Zacks Rank #2 (Buy).Read the Full Research Report on ABBRead the Full Research Report on STORead the Full Research Report on RXNRead the Full Research Report on AOSZacks Investment Research
- Oil, Gas, & Consumable Fuels
- Statoil ASA
- ABB Ltd