By THOMAS BLACK
Honeywell International has a solution for oil producers that
need a refinery
in a region where bombs
and bullets fly. It will ship one ready-made.
The first of these small, portable units will be built in a
factory, sent by sea to Iraq, trucked inland and
plunked down on a prepared foundation, said
Rajeev Gautam, president of Honeywells oil and gas
service unit. The daily production capacity will be about 10%
of a big refinery
that would have to be
built on location.
Assembling the equipment off-site may help energy companies
solve the critical challenge of keeping large construction
crews out of harms way while erecting infrastructure to
tap oil fields in dangerous locales. Nigeria, the OPEC member
thats fighting the Boko Haram militant Islamist group,
is among the markets where Honeywell sees sales potential,
There are certain geographies where this is going to
make sense, Gautam said in an interview at UOP,
Honeywells oil and gas service unit, in Des Plaines,
The modular building of oil and gas equipment helps reduce
cost overruns and construction
time and is also a
way for Honeywell to boost sales of its energy technology
. UOP already has
experience building modular equipment for natural gas
processing and is expanding that technology to crude oil
The company bought a 70% stake in Thomas Russell Co., a
builder of modular natural gas processing plants, for $525
million in 2012.
Plans to take Thomas Russell global are under way with the
sale of a modular gas processing facility that will be
delivered to Iraq, the first outside of North America for the
business, said Rebecca Liebert, chief of UOPs gas
processing and hydrogen business.
As it expands the modular concept to refineries, UOP this
week signed a contract to deliver a prefab unit for crude oil
UOP, whose sales rose 31% to $2.96 billion in 2013, is also
seeking opportunities to build modular pieces for large
refineries, Gautam said. Sections of a refinery, such as a
Merox unit to remove sulfur, are small enough to assemble in
a factory and plug into the work site, he said.
When you look at mini-refineries and modular units of
various kinds, this is a pretty good growth factor for
us, he said.
The portable refinery
, which takes about two
years to build, will help restart stalled project
s in Iraq, Gautam said.
Although front-end engineering work has been done for large
refineries, funding hasnt been available because
partners are unwilling to risk operating in a country racked
by violence, he said.
In regions, including Southeast Asia, where its
challenging to build large project
s and stay within budget,
the small modular refineries also make sense, Gautam said.
With the modules, the foundation work is completed at the
site and Honeywell ships the equipment encased in a steel
frame thats ready to be installed.
The modular processors for natural gas, which separate the
different gases contained in the fuel, reduce fabrication and
rework costs by about 30% compared with building them from
scratch in the field, Liebert said. In US gas fields, rain
delays or harsh winter weather can slow construction
and its getting
harder to find qualified workers in places like North Dakota,
she said. UOP builds its modular processors in Tulsa,
In these really rough environment
s, modularization to
the fullest extent that you can is the way to go,
UOP in September formed a joint venture with Black &
Veatch to offer modular liquefied natural gas plants, which
could help ease some flaring of natural gas while Bakken
drillers wait for more pipelines to be built. The
factory-built processing and liquified natural gas plants can
be delivered in 12 months, Gautam said.
We can really promise the customer fast gas, he
said. That is worth real money to them.
Its worth real money to UOP too. Modular construction
of equipment helps
the company sell its refining
and gas processing technology
, which is where the
profits are, Gautam said.
You can license and have it stick built or I can
deliver it as a modular unit, he said. Its
still the technology
that were known
for, otherwise Im just a metal bending shop.