CRL 1-hr: 9/26 Introduction to Uptime Elements Reliability Framework and Asset Management System

Once primarily the province of under-capitalized independent producers who refined horizontal drilling and hydraulic fracturing technology to tap into the once-marginal tight gas reservoirs in Appalachia, the Central U.S., and Western Canada, the massive reserve has now sparked attention from the major industry players. ExxonMobil, through its acquisition of XTO Energy in 2010, other supermajors, and a host of gas-short Asian players have since taken positions in the U.S. and Canadian shale gas play, with total capital commitments exceeding $100 billion.

While the long term strategic merits of this massive inflow of capital remain unclear, the short-term effects have been profound. The focus of North American natural gas production has shifted to developing shale gas resources at a frenetic pace, with U.S. shale gas output growing from 1.5 TCF in 2007 to 7.8 TCF in 2011, inflicting massive change on the landscape of the North American gas industry.

And this is only the beginning…

Interesting facts about the shale boom:

  • The U.S. Energy Department forecasts shale gas production alone will grow to nearly 13 TCF by 2025, becoming 45% of total U.S. supply, with tight sands adding another 23%. From a global market perspective, U.S. net gas imports peaked at 3.6 TCF in 2007 and have declined steadily, to 1.5 TCF in 2012. However, the DOE projects that the United States will become a net exporter of natural gas by 2020, directly as a result of shale gas commercialization.
  • Natural gas transportation infrastructure - Today, 13 LNG terminals are operating in North America, and as the focus turns to exporting, several import facilities are adding liquefaction capacity to reverse their originally-intended use.
  • Pricing - Historically high differentials now exist between oil products and natural gas. Given the large volume of potential gas supply that has been shut-in or undeveloped in North America due to weakness in pricing, the high spread between oil and gas prices is expected to become the industry norm until longer-term, demand-side response can bring some equilibrium to the market.
  • GTL plants, which require a large and sustainable premium between oil and gas prices, are perhaps the most salient indicator of the changing North American gas paradigm. A secondary consideration of GTL plant design lies in the potential to channel some portion of paraffinic wax produced from Fischer-Tropsch (F-T) condensation toward the production of very high quality (Group III) lubricant base stocks. If GTL becomes embedded in the mainstream refined products supply as a function of sustained high oil/natural gas price differentials and a learning curve reduction in new facility capital-intensity, GTL plants will begin to put pressure on conventional refinery margins…

The growth in GTL base stocks supply will ensure that this product will emerge from the shadows of an internally-captive supply to one with a rapidly-growing merchant market where it will compete directly with conventional oil-based Group II and Group III base stocks. Key players who may take advantage of this source of new supply are large lubricant marketers who are not significantly backward-integrated into base stock supply, such as BP/Castrol, Fuchs, and Ashland/Valvoline, as well as large NOCs who wish to lead advanced lubricant formulations in their home markets, but do not wish to assume the costs and risks associated with GTL investments.

To learn more about Kline’s perspective on how the shale gas boom is shifting natural gas conversion and lubricant base stock manufacturing, download the white paper by visiting: http://www.klinegroup.com/articles/shale_gas_overview.asp

Upcoming Events

August 8 - August 10, 2023

Maximo World 2023

View all Events
banner
80% of Reliabilityweb.com newsletter subscribers report finding something used to improve their jobs on a regular basis.
Subscribers get exclusive content. Just released...MRO Best Practices Special Report - a $399 value!
DOWNLOAD NOW
Seven Chakras of Asset Management by Terrence O'Hanlon

The seven major asset management chakras run cross-functionally from the specification and design of assets through the asset lifecycle to the decommissioning and disposal of the asset connected through technology

Reliability Leader Fluid Cleanliness Pledge

Fluid Cleanliness is a Reliability Achievement Strategy as well as an asset life extension strategy

MaximoWorld 2022 Conference Austin Texas

Connect with leading maintenance professionals, reliability leaders and asset managers from the world's best-run companies who are driving digital reinvention.

“Steel-ing” Reliability in Alabama

A joint venture between two of the world’s largest steel companies inspired innovative approaches to maintenance reliability that incorporate the tools, technology and techniques of today. This article takes you on their journey.

Three Things You Need to Know About Capital Project Prioritization

“Why do you think these two projects rank so much higher in this method than the first method?” the facilitator asked the director of reliability.

What Is Industrial Maintenance as a Service?

Industrial maintenance as a service (#imaas) transfers the digital and/or manual management of maintenance and industrial operations from machine users to machine manufacturers (OEMs), while improving it considerably.

Three Things You Need to Know About Criticality Analysis

When it comes to criticality analysis, there are three key factors must be emphasized.

Turning the Oil Tanker

This article highlights the hidden trap of performance management systems.

Optimizing Value From Physical Assets

There are ever-increasing opportunities to create new and sustainable value in asset-intensive organizations through enhanced use of technology.

Conducting Asset Criticality Assessment for Better Maintenance Strategy and Techniques

Conducting an asset criticality assessment (ACA) is the first step in maintaining the assets properly. This article addresses the best maintenance strategy for assets by using ACA techniques.