Mid-Term opportunities Created by Round OneWed, 01/20/2016 - 11:53
Q: How does MAN Diesel and Turbo (MAN) contribute to the Mexican oil and gas industry, and how have the bidding rounds affected your operations in Mexico?
A: A considerable percentage of world trade is powered by MAN, evidenced by the fact that most major cargo ships, containers, cruise, and offshore vessels across the globe use our engines. In order to maintain our dominant market position in the two-stroke and four-stroke engines market for marine applications, we are heavily investing in R&D. Our power product portfolio currently ranges from 450kW to 82,400kW per engine. MAN’s equipment portfolio also consists of compressors and steam turbines for refinery applications. Moreover, our recent acquisition of Cryo AB’s Marine Fuel Gas Supply System (FGSS) business has brought in capabilities in the manufacturing of cryogenic equipment for the storage, distribution, and handling of liquefied gases. We believe this will be advantageous for the Mexican market, as natural gas is rapidly gaining prominence as a fuel for the marine sector and for LNG carriers.
We now also offer our Dual Fuel engines for other gasfueled ships such as ferries, cruise ships, and offshore vessels, as we plan to take part in shipbuilding activities in the country. We are expecting an increase in demand for engine and gas system packages and recently supplied two accommodation vessels owned by PMI with Man GenSets. These vessels are currently under construction in the Navantia and Barreras shipyards, and we expect them to arrive to Mexican waters by mid-2016. Our participation in activities related to the bidding rounds will be a mediumterm endeavor. In four to five years, when the new private players have established operations, the requirement for new infrastructure will create a significant opportunity for MAN, and we will be prepared to supply operators with equipment such as compressors, turbines, and engines.
Q: How do you plan on using your competitive advantages to attract companies entering the market as a result of the Energy Reform?
A: One of our benefits is our size. Because we are a relatively small enterprise, we can move faster than competitors and offer certain flexibility, allowing us to better serve our customers. Another advantage is the fact that we already have an established presence in the Mexican market. Moreover, we differentiate ourselves from competition by offering excellent after-sales services and maintenance, in addition to high-quality innovative products. Our business is driven by global trends and developments, be it in local and worldwide transport with gas and diesel engines for propulsion, in energy generation with gas engines and gas and steam turbines, or in industrial production with compressors for industrial applications. We are currently working on EOR systems and natural gas injection compressors that inject and compress the natural gas obtained from processing oil into the reservoirs, aiming to improve recovery. In fact, we enjoy a 100% market share in the EOR segment. We also provide the technology to inject nitrogen into the reservoir, a necessity in the Mexican market, given the scarcity of natural gas. For the moment, there are only two companies producing nitrogen in the Mexican market, Praxair and Nitrógeno de Cantarell, and their compressors are produced and supplied exclusively by MAN.
Q: What is MAN Diesel & Turbo’s role in the activities of PEMEX?
A: We are an essential part of PEMEX’s activities, allowing it to distribute its refined products reliably and efficiently throughout the country. MAN is present across a large majority of operations in the six PEMEX refineries. We supply and manufacture equipment for refinery plants, such as compressors and steam turbines. MAN is also a partner of PEMEX’s main fleet manufacturer, and so far we have provided the contractor with engines for the NOC’s 16 tankers. In addition, we are currently providing the service and maintenance support for the main propulsion engines of each tanker. When it comes to PEMEX's budget cuts, we have not been overly affected so far, although we expect to feel consequences at some point. Our projects with PEMEX have not all been impacted, and we are able to continue our work on the ultra-low sulfur diesel project, manufacturing three compressor trains, with PEMEX Refining as the end customer. Our direct customers will be EPC companies like ICA Fluor in Mexico and Técnicas Reunidas in Spain.