Pipelines and Infrastructure Go Hand in Hand

Q: How has United Pipeline performed since the start of the present administration?

A: This is certainly a time of change which has brought unique challenges with it. Market realities are forcing the business sector and the government to adapt to each other and both sides are becoming more flexible and finding ways to work with each other. The current environment is complex, but Mexico is a country full of opportunities. The government is becoming more open to dialogue about how to incorporate opportunities with private investment and participation. Corruption has traditionally been an obstacle for the development of the oil sector and we applaud the government’s efforts to tackle this issue front and center.

Q: What sectors of the market do you think will grow the most?

A: I see a growing need for more infrastructure in Mexico and the government lacks the resources to do everything on its own. It will require a joint effort between the government and the business sector to address the various needs of the market. In terms of natural gas infrastructure, for example, the north and northwest of the country is welldeveloped while the south is in dire need of infrastructure investment. We hope that both the government and the business sector will find a way to collaborate with each other and investments will arrive. The market needs clear rules and certainty for investments to arrive and that is the government’s responsibility. The government is adopting a more flexible outlook and demonstrating a willingness to partner with the private sector. In our specific business with PEMEX, our relationship with the company is good and we will work to continue to try to bring value to the table in everything we do. With our technology, we can turn distressed assets and infrastructure to bring them back to operating conditions in a cost-effective manner. For PEMEX, effective and smart use of resources is crucial and renovating existing assets can provide substantial savings it needs now more than ever. Instead of replacing deteriorated pipelines, PEMEX can renovate assets at a fraction of the cost and time it takes to replace them. Along with other solutions, our key value proposition consists of inserting thermoplastic liners inside existing pipelines and providing structural reinforcement without digging or replacing the existing infrastructure. Our patented approach can be applied to onshore and offshore pipeline systems.

Q: What other technologies can PEMEX consider for restoring its pipelines in the south of Mexico?

A: We are a pipeline technology-based company. Our solutions are optimal for deteriorated small and large diameter pipelines and systems that carry corrosive products. PEMEX does not need to replace existing assets that have deteriorated due to corrosion; it can protect and renovate the existing infrastructure with cost effective methods that will give new life to strategic assets. United Pipeline is a perfect fit for rehabilitating production pipelines in the upstream market where produced water has become a growing challenge and concern. As oil fields mature, PEMEX’s growing water production generates corrosion and is destroying pipeline systems that are not adequately protected. PEMEX is producing 1.7MMb/d and approximately 1.3 million barrels of sour water which will quickly destroy pipelines and production systems if these are not protected.

Q: What is your company outlook for 2020?

A: Investment has been very low for the past four years, and especially in 2019, but we expect 2020 to improve. The government’s goal to increase oil production and reverse PEMEX’s production decline will require healthy investments in new and existing facilities. Our main focus is PEMEX, where pipelines will have to be fixed for oil to reach the market. We have the capacity to undertake 300km to 400km per year, which would have a substantial impact on PEMEX’s operations. We manufacture most of our materials in Mexico where we have operated for the past 27 years leveraging local resources, suppliers and partners.

United Pipeline, a subsidiary of Aegion Corporation, protects and renovates pipeline systems. The company provides a wide range of proprietary technologies for the rehabilitation of oil, gas, water and wastewater pipelines.