Running on plenty?

The demand for oil-based products appears to be never ending, barely affected by the global financial downturn; the importance of this sector within supply chains has continued to grow. It has meant that some sectors connected to the petrochemicals industry have developed an increased dependency on the value of oil. The lifting industry benefits from the world's reliance on petrol and plastic, providing the equipment for the process of turning the natural resource into a saleable product. These are major projects, that require multiple machines over many years. They can be very lucrative for crane rental firms and manufacturers. Strict safety regulations on petrochemical sites require equipment to be updated on a regular basis, generating a significant demand for cranes.

"The mobile crane rental business is intrinsically linked to petrochemicals due to the almost continuous need for lifting services on site." says John Lowton, Ainscough's director safety, health, environment and quality (SHE-Q), "The work is relatively consistent year on year, we have a number of cranes sited permanently on refineries and undertake a number of shutdowns every year where part of the production is closed down whilst the plants undergo major component replacement."

This is a sentiment echoed by Jerry Maloney, Manitowoc's global product director, who says trends can be traced across the two sectors: "There is definitely a connection between the petrochemicals industry and the crane business. Every time the price of oil rises we see it drive our business."

Maintain the gain
Maintenance is the driving force behind much of the work that cranes do on refineries; manufacturers and rental companies both vie for contracts linked to the maintenance of these sites. The length of these deals varies but significantly long-term contracts can ensure the regular sale of equipment for several years.

Sarens Nass recently agreed a fifteen-year deal with Saudi Aramco, the national oil and gas company of Saudi Arabia, to provide cranes for the service of its refineries. These type of deals are something that the company plans for even at the construction stage of a project. Philippe Verdure, the company's sales manager for projects in the Middle East, says: "For the next five years we'll be caught up with the building and expansion of refineries, and after that the challenge will be to keep the equipment in use in terms of maintenance. This is something that we've already been anticipating as we prepare to make an adjustment."

"Our 15 year agreement with Aramco is for maintenance of the refineries. [We will supply] 17 smaller telescopic cranes that will be used on the site. It is the EPC and the construction companies that will be onsite."

Contracts of this length are not ubiquitous; there are many regions where fifteen-year deals are unheard of, and it can take a great deal of effort to change shorterterm attitudes towards maintenance. These longer term deals that benefit both the rental firm and manufacturer, as the supply chain provide business for both parties over an extended period. In South America, Sany Brazil are actively looking to form partnerships to help rental companies secure longer term deals says Guilherme Saraiva a sales manager for the Chinese firm's Latin American business: "One of our major strategies is to move from construction jobs and continue to work with the refinery on maintenance. Traditionally, in Brazil, contracts have been between three-to-five years but we are looking to secure longer-term deals of five to ten years. So far we have been successful in securing two or three of these contracts. These clients have been happy with the service we have provided and we hope this will encourage more people to work in this way."

Size and space
With such long-term deals in place, listening to a customer is crucial. A client that feels neglected can cost a company business for a decade. For a manufacturer this means responding to what the rental company needs to be most effective on an ever-changing job site.

"Our customers are large rental houses hired by the refineries to carry out maintenance. Particularly on turnaround maintenance that takes place non-stop for 24 hours for a set period. We listen to the rental firms, when developing new machines, adding different features if the customer asks for it. Most of our clients are people we have long relationships with going back many years, and its their advice we seek" says Jerry Maloney.

The range of the machines used on these sites is diverse, changing sometimes quite dramatically from one site to another. Guilherme Saraiva believes that the selection of equipment Sany Brasil offers gives them a distinct advantage "20% of the company's work comes from oil and gas and the range of cranes we have allow us to perform many more jobs in this sector."

This range was demonstreated by Sany Brazil's recent job at the Petrochemical Complex of Rio de Janeiro (Comperj) construction located in the city of Itaboraí, Rio de Janeiro. Guilherme Saraiva continues, "We have been involved in a job that involved the building of pipelines and pipe racks. The task required five crawler cranes, three telescopic cranes, three rough terrain cranes and two ferry cranes. There were two kinds of lattice and telescopic cranes. In terms of challenges we had a large range of stability points. Our cranes were lifting parts within a large range, and it was a lot of weight to lift with a small boom."

One of the most common demands from customers is for more capacity and clients performing refinery work are no different. Jerry Maloney from Manitowoc can certainly vouch for this: "Lifts are getting bigger and bigger. Customers want to install components in one lift rather than several. 20 years ago 150t and 300t lifts were considered big, now a 600t lift even is being considered the norm"

The greater the capacity the more ambitious tasks can be carried out. For refineries this means components that had to be moved into place prior to construction can now be installed in a fully formed state, its something Guilherme Saraiva has seen with the increase in capacity: "Our range of lattice boom crawler cranes in particular is part of a set that of larger models bigger capacity cranes. These have changed the way in which refinery construction takes place, now components can be constructed before they are installed."

John Lowton of Ainscough has also seen an increase capacity across the sector although he believes the change has been gradual: "As larger capacity cranes are developed, heavier components may be utilised. This is the same across other sectors of our business; evolution not revolution."

There are other factors that dictate a crane's operation in the Petrochemical environment; in older refineries particularly how the machine operates on a site is defined by spatial constraints. Jerry Maloney of Manitowoc explains: "A lot depends on how the machine maneuvers, because space can be restricted on some of these jobs sites. Older refineries also cause logistical challenges not in terms of how heavy the lifts are but in terms of travelling over existing structures."

"Predominantly we see our crawler cranes from 250t up being used, these machines are performing jobs such as taking out equipment from the refinery and replacing it. We don't find that we are customising machines, but we do include features such as luffing jib and Max-Er attachments, these can be added to the to the existing structures, giving the machines more versatility."

It's a trend that Philippe Verdure of Saren Nass has also noticed: "Over the last few years we have seen a growth in demand for versatile equipment, machines with greater ease of use and that can be quickly mobilised."

Local knowledge
There are only certain places in the world that have oil, and therefore only select number of locations where refineries can be built. Each different region presents a variety of challenges as the natural environment and local regulation changes from place to place.

It something Sarens Nass' Philippe Verdure has seen: "across different geographies processes are similar, but there is variation in the capacities of the plants themselves. In Europe, the capacity of refineries is much less than in the Middle East, which means that the equipment sizes will be different."

"Sites in Saudi Arabia are separated into small packages: the acceptable space to work is not so wide. So effective ways to lift within these parameters have to be found."

A globalised economy has resulted in some countries reaching across many borders but there are still trends that are region specific. Particularly when it comes to the modernisation of older plants and the construction of new facilities. Jerry Maloney from Manitowoc explains: "We serve a lot of companies in the American gulf coast, Texas, Louisiana, Mississippi. Outside the US we see our cranes put to work in Saudi Arabia, and Indonesia amongst others. More and more business is also happening in Africa. Similar cranes are in demand across these geographies many of these are international companies so they serve a range of different places. We have customers in Europe and for them we make units that comply with the EN 13000 charts if they require it." Safety first Ensuring these environments are safe isn't just a question of protecting staff and assets, it's a legal obligation. The regulations relating to cranes working in these environments does differ which means that as well as meeting internationally established standards, machines need to fit the requirements of the specific region in which they work.

"I would say that refineries are one of the strictest job sites in the world" says Jerry Maloney "This is good because all our products are designed to be as safe as possible. More and more for customers safety is a top priority."

Ainscough are also proactive in their approach to safety, as John Lowton explains: "All our drivers go through a thorough site induction before commencing work at a refinery. We have a regular presence on all the refineries we serve throughout the year and hold regular safety meetings and work to solid safety initiatives. We have a permanent safety representative on site during shutdowns."

It isn't just the operators who have to meet the strict legal guidelines the equipment on site, Eric Beaulieu, technologies manager, Load Systems International (LSI): "We provide a lot of equipment for cranes in the petrochemicals industry worldwide, where we supply lattice cranes and telescopic models with the devices that meet the ATEX standards. We sell more and more new products with the ATEX certification, it is really a worldwide growing market."

"In most places in the world ATEX is the recognised standard required for hazardous areas. ATEX specifies which equipment could work in environments where oil or gas is present and is graded in zones. Zone 0 refers to an area where oil or gas is constantly present, zone 1 is where it is sometimes found and zone 2 is for a space where it could be found under abnormal conditions. A good example is a gas station where zone 1 would be the area directly next to the pump and zone 2 would be an area 2 metres away from it."

"The certifications are particularly difficult to obtain and our equipment requires a great deal of testing to ensure compliance. In some cases it can take more than a year for a device to complete the process. Following internal testing, our products are tested by an independent laboratory before being sent to the regulatory body for final approval. There, several units are pushed to their limits in ultimately destructive tests."

Developing products that have features developed to be advantageous in regards to safety regulations, Eric Beaulieu continues: "LSI wireless products have a great advantage when it comes to safely add sensors because you don't need the armored cables or conduits that are costly and restrict movements. It makes installation support of the machine easy."

A crane is only as good as the number of jobs it performs, and ensuring units keep working is one of the most important parts of the lifting industry. If demand from one industry drops another application must be found. The petrochemical industry has a steady need for machines and it's no wonder therefore that phrases such as "intrinsically linked" used to describe the connection between the two. As long oil remains in high demand, refineries will continue to provide work for the lifting industry, and currently it appears this will continue for the foreseeable future.