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How 3D Printing Is Tackling Big Oil’s Supply Chain Crisis

Irina Slav

Oil company X had problems this spring. It was time for field maintenance, but company X couldn't go ahead with it because it needed spare parts that weren't coming anytime soon. Coronavirus-prompted lockdowns were breaking down international supply chains.

Refinery Y had the same problem. It was maintenance time, and maintenance could not begin because of that same disruption to the supply chain. Refinery Y had to delay its maintenance, risking outages.

The problems of X and Y are very real and also dangerous. They also reveal one of the less pleasant aspects of the globalized economy: an overdependence on long international supply chains. But there is an alternative to these long supply chains: additive manufacturing or 3D printing.

Shortening the supply chain

One of the advantages of additive manufacturing is that it can address problems such as the ones that companies X and Y were having amid the lockdowns, and that it can address them fast. All X or Y would have to do is contact their oilfield service provider—if it has additive manufacturing capabilities—and order the parts that they need to have printed. 

With access to a 3D printer, companies don't need to wait for the delivery of complex parts from thousands of miles away. What's more, they don't need to keep as much inventory as they have to now, for emergency replacements, because of something called digital inventory.

According to Baker Hughes' global head of additive manufacturing services, Mikhail Gladkikh, keeping digital inventory and providing what BH calls “emergency services” are two of the biggest growth areas for the technology in oil and gas.

Digital inventory, as the name suggests, is the non-physical storing of component parts in a form Gladkikh calls a digital passport. It includes details about what the part looks like and how it should be built. Once there is a call for the part, the digital passport is put into use to 3D print the part much closer to home.

These changes, says Shell—another early adopter of 3D printing—will make the industry's supply chain more resilient and flexible because it will simplify it. And the current crisis will accelerate this trend, with more industry players opting for the advantages the technology offers.

Lowering costs

To avoid any excessive hype, it needs to be said early on: 3D printing will not replace traditional manufacturing. It is costlier than that when it comes to some of the most popular things used in oil and gas, such as pipes, for example, or nuts and bolts. 3D printing is not meant for cheap mass production of nuts and bolts. What it is meant for is limited production of highly complex components of oil and gas, and power generation equipment.

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It is here that additive manufacturing shines, Gladkikh told Oilprice.com. For the 3D printer, the complexity of the item it is printing is no problem at all. What's better, you can improve the design of this item to optimize it for a certain task. And what's even better, you can design your own parts that could not be manufactured the traditional way to do a task even better.

Gladkikh calls it generative design, where you have the freedom to do pretty much whatever you want with a part for functional optimization. In other words, making it as good as it can possibly be for the performance of a certain task, whether that's for oil drilling or power generation. 

According to Shell additive manufacturing manager Ron van Wolferen and supply chain digitalization executive Nick van Keulen, the rapid turnaround times of additive manufacturing thanks to digital passports and digital inventory are a major point of cost reduction.

This, and the fact that companies can delay their spending on new parts until the moment they are needed, will minimize production losses and therefore save money. And this benefit extends across the supply chain, from manufacturers, who won't need to stock up on so many parts when they can print them on demand, to the companies that use them.

Lux Research analyst Arij van Berkel told Oilprice.com that "additive manufacturing has the potential to become important in the maintenance and construction of upstream production in the long run. It does offer a cost advantage for small series production, and it potentially solves the issue of having to keep a large stock of many different parts at every site."

… but not all costs

3D printing is not a cure-all solution to supply chain and functional efficiency problems in the oil industry. Digital inventory and print-on-demand emergency services are great, but they are not for everyone because, like many cutting-edge technologies, this, too, requires a substantial upfront investment. Right now, few can afford this.

3D printing, says Gladkikh, is a niche technology, which is why it will never become the default way things are manufactured in the oil and gas industry. It is suitable for low-volume, high-complexity parts but not that good, economically, for high-volume, low-complexity items.

According to Lux Research's Van Berkel, "The technology is not yet ready for full-scale deployment and the cost savings are not significant enough to matter in the current crisis. Therefore, we don't believe that COVID-19 and the current market conditions for oil and gas will have a significant effect on the introduction of 3D printing in the industry."

More challenges

As is the case with everything new, 3D printing is facing strong skepticism in the industry. As Gladkikh told Oilprice.com, when people are used to doing things a certain way and happy with this way, it takes time to convince them there is an even better way to do things. And then there are the regulatory constraints.

Regulation tends to lag behind technological innovation, and 3D printing is no exception. If a 3D printed part is not approved for deployment by regulators, it cannot be used. But regulators have yet to devise rules and standards for a larger number of 3D printed parts. 

And then there are the limitations of the technology itself.

"The main barrier for the technology is the reliability of 3D printed parts," Lux Research's Van Berkel told Oilprice.com. "The technology is not yet capable of printing parts with sufficiently predictable mechanical properties. As a result, every part needs to be tested before it is used in the field. This means the cost advantage is nullified by the cost of testing."

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What's more, for now, 3D printers used in oil and gas services cannot print parts over a certain size and dimension simply because the printers are a certain size. With 3D printers, it's not as easy to scale up the size while maintaining the necessary degree of accuracy. The size of the parts is also a limitation in terms of cost: the more material a part requires, the more expensive it is, meaning many larger and complex parts are still cheaper than 3D printed replicas.

So what's all the fuss about?

Emergency part supply services and print-on-demand are two of 3D printing's attractive points. One other point is that with just a tweak of the design of a part, you can boost the performance of this part significantly. Take a turbine, for example. A traditionally designed and manufactured turbine has a certain standard performance that cannot be improved in any meaningful way without a major design change that would necessitate changes to the production process, too. These changes would be expensive.

With 3D printing, you can play around with whatever improvements come to mind and see which one would work best at—this is important—no additional cost at all because you don't need to manufacture anything until you are confident the improvement will work. What's more, you can do a lot of this close to the oil field. And this is what the fuss is all about.

"3D printing will be used to design and prototype new parts that will function better and cleaner or to rework obsolete parts," Shell's Van Wolferen and Van Keulen told Oilprice.com. "Also, 3D printing-related technologies will be used to do on-site repair of oilfield equipment. This means that repair or renew through 3D printing are also options compared to buying new parts."

So, the innovative design of new parts, rapid prototyping, short lead times, and on-demand production are all major growth areas for additive manufacturing over traditional manufacturing, Van Wolferen and Van Keulen said. A move towards local production and a repair culture are also among 3D printing's advantages with the added benefit that they will reduce the carbon footprint of the business.

Despite the challenges, additive manufacturing has a bright future in oil and gas. The industry must have realized now how its over-reliance on extensive international supply chains could interfere with its normal operations, with potentially grave consequences such as production outages at fields. 3D printing could help solve this problem and many others.

On a final note, 3D printing is versatile. A printer could be quickly configured for many different tasks such as printing protective gear for front-line workers during the pandemic, something that both Baker Hughes and Shell are already doing.

By Irina Slav for Oilprice.com

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