Gerardo Flores
Strategic Account Manager for PEMEX
View from the Top

Instrumentation Redefining Value Chain Infrastructure

Wed, 01/20/2016 - 11:44

Q: What role has ABB played in the development of PEMEX’s existing infrastructure, and what have been the main highlights of its contribution?

A: Our relationship with PEMEX goes back 35 years, when we were known as Taylor Instruments. As equipment developed, we went from supplying pneumatic technology to the digital instrumentation used today, the latest technology available in the market. We have worked with the NOC on service requirements, training, service contracts, and any other services needed to keep the systems and equipment up and running.

In the past five years, we became an important part of PEMEX’s activities in the offshore business, because we have the main three disciplines required on platforms. These are instrumentation, automation, and power supply. We have an extremely solid portfolio for those disciplines, and we became one of the first players in that arena in conjunction with the EPC companies. We also bring value to PEMEX through work for its contractors. We built a complete platform with a local partner, Bosnor, part of Grupo R, for which we developed all of the engineering for the process equipment, automation, and power. Grupo R built the jacket and the topside platform. The project cost US$320 million, and was the largest we have undertaken so far. In addition, we recently delivered substation number five for PEMEX, as the original one burnt down three years ago. ABB won the bid for this project by approaching it from a predominantly technical point of view, and also by carefully considering the significance of our business with PEMEX.

Q: To what extent has the mapping of the market segments ABB serves around the world uncovered business opportunities in the Mexican oil and gas industry?

A: Today, we have the projects that had been put on hold by PEMEX for many years, and we are looking forward to the development of clean fuels, which are now at the diesel stage. There are six refineries that need to be installed with new processes that can handle ultra-low sulphur diesel. This project has been on the table for approximately ten years, and is at least six years behind schedule, but it finally looks like it is moving forward, despite PEMEX’s budget cuts.

Although this project was initially launched for economic reasons, stemming from the Kyoto Protocol, today, it has become a matter of survival. Now that the borders are open for the supplying of gasoline and diesel, if PEMEX does not supply ultra-low sulphur diesel, it will not sell anything.

Another opportunity for us lies in reconfigurations. There are still three refineries that require a process update, because they were designed to process light oil, and Mexico’s production is largely shifting to heavy oil. However, we are unsure whether PEMEX will move in that direction for the time being. The main reason behind our doubts is the removal of the US ban on crude exports, which had been in place since the 1970s. This has allowed PEMEX to import 100,000b/d of light oil from the US, mix it with the local heavy oil, and supply PEMEX’s refineries with the type of crude they were built for. That could solve the problem in the short term, without having to resort to refinery reconfigurations, which cost US$3 billion each.

Q: What new products and services do you have in the pipeline for the Mexican oil and gas market?

A: We have one specific product, for which we are number one in the world, called High Voltage Direct Current (HVDC). It is a solution for providing power to platforms from the shore, instead of building generation platforms offshore, which is extremely costly and difficult to maintain. We have developed a solution where the platform is connected to the shore through an underwater cable, saving time, as all maintenance can be carried out onshore. Another advantage of our solution is that the risk of having a power cut is passed on to the supplier.

We provide the power systems required to obtain the energy from the transmission line, by converting it from AC to DC, sending it through the cable, and then converting it back to AC at the platform. Our colleagues in Norway are the experts in this as they have carried out the process for BP, Statoil, and ExxonMobil, among others. PEMEX has a need for this technology in the Ayatsil-Tekel-Utsil field and if they were to invest in it, it would be the first installation of this type in the Mexican oil and gas industry.