Fluid & Gas Flow

Nuclear Plants, Subsea Oil Projects Lead Market Opportunities

December 9, 2014

Valves photo

(Photo credit: Westinghouse)

The Sanmen electricity plant in China, built by Westinghouse, is one of a number of new nuclear energy projects around the world generating demand for valves.

The global energy market is awash in oil and natural gas, boosted by shale oil reserves in North America and current and emerging natural gas fields such as those in the eastern Mediterranean, off the shores of several Southeast Asian countries, and in the Middle East.

While the abundance of fossil fuels is reducing oil and gas prices in some countries, many nations are looking beyond carbon-based sources for future power needs and energy independence. Although sustainable alternatives like wind and solar are slowly finding places in some national grids despite their high cost and scarce infrastructure, conventional routes to energy generation such as nuclear power remain viable and popular despite lingering concerns over safety.

Data developed by consultant McIlvaine Co. of Northfield, Ill., indicate that despite the concerns and, in some quarters, hostility toward nuclear energy, the industry will become an even larger consumer of valves for nuclear power plants by 2017. In a report titled "Nuclear Power Plant Valve Forecast and Analysis," McIlvaine states that the global market for valves installed in nuclear power plants will exceed $2.4 billion by then.

Much of this demand - more than 30 percent - will come from China and East Asia, which combined are forecast to spend $755 million on valves. Spending by Western Europe for nuclear plant valves will account for more than 20 percent of the projected total, while the U.S., Canada and Mexico will combined spend less than 15 percent of the projected market value.

Most of the purchases will go to existing plants, many of which have been in service for years and need ongoing replacements and upgrades. A nuclear power plant typically has more than 5,000 valves, McIlvaine explains, ranging in size from those that handle a few liters of flow per minute to those that regulate 100,000 gpm.

There are about 150 nuclear power plants planned for construction around the world, McIlvaine reports, most in Asia, and more than 300 have been proposed.

Valve manufacturers seeking growing markets should thus evaluate the business potential that nuclear power plants can offer their companies.

China Market Strong

Meanwhile, China remains a major market for all types of industrial valves, according to the findings of another study, by RnRMarketResearch.com of Dallas. In "Global and China Valve Industry Report," the company states that valves for the gas and petroleum, energy and power, and chemical industries have, from 2008 to 2013, yielded a compound annual growth rate (CAGR) of 7.3 percent for the country's valve industry, compared with a global CAGR of 3.3 percent during the same period.

The nuclear power industry in China is gradually picking up steam as a valve consumer, primarily for globe, diaphragm and ball types. RnRMarketResearch.com forecasts that the nuclear power restart that took place in China this year after a moratorium on new plants following the meltdown of Japan's Fukushima reactor, will result in sales of CYR9.5 billion (Chinese yuan renminbi), or about $1.5 billion, in 2015.

China has many local producers of valves. One company that specializes in valves for nuclear power plants is CNNC Sufa Technology Co. Ltd. RnRMarketResearch.com says the company is accelerating R&D programs in valves for nuclear power stations. Demand in this area is strong enough that in the first half of 2014, CNNC Sufa reported 49 percent growth in revenue from the nuclear market over the same period in 2013.

Subsea Pump Demand High

Lower oil prices have caused some subsea drilling projects to be canceled, or at least put on hold for the foreseeable future. However, more than 100 are moving forward, according to McIlvaine. The subsea vessel industry, as a result, continues to generate demand for thousands of pumps, according to a report titled "Pumps World Market," from the consultant.

Subsea vessels are, of course, surface ships with undersea drilling equipment. Construction of the vessels is growing by 7 percent per year, the report finds. More than 54 percent of the active fleet was delivered in the past eight years, and 115 ships are under construction.

Pump manufacturers are, as a result, winning major orders. Examples include Lewa, which received a $41.6 million contract for 40 process diaphragm pumps for two gas fields offshore of Saudi Arabia.

Other companies supplying an undisclosed number of pumping systems for subsea work include: Sulzer Pumps Ltd. in collaboration with FMC Technologies Inc.; Andritz, working with two Chinese shipyards; and Flowserve, which is supplying equipment to Sabah Shell Petroleum's Malikai oil field off Malaysia.

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