Valves: Undervalued Linchpin Driving Oil and Gas Industry

Q: What is the added value of Walworth's solutions and how have you built your presence in the country?

Walworth Valves is the oldest operating valve company in the world. We were enormously proud to celebrate the company’s 180-year anniversary in 2022. We have been the most important valve manufacturer and supplier in the Mexican market for at least five decades. Currently, Walworth employs over 700 people.

The current management has led us for only 20 years. This yields a great combination: a long-standing heritage with a modern management team. We are constantly growing, questioning ourselves and looking forward. We see ourselves as an optimal solutions provider for industry supply chains.

Q: What role do products like valves play in ensuring minimal losses and continued efficiency in the oil and gas sector?

A: We are in the business of providing certainty to the crucial large-scale projects we serve. The industry in which we mainly participate, oil and gas, is a highly regulated sector where quality and reliability count.

We understand the industry’s risks: it has hazards for people, the environment and nearby communities. All of that is built into our philosophy. Some of Walworth’s valves have been working flawlessly in the field for 40 years. 

It is common to see over-specified valves in Mexico, which will result in unnecessary costs for the project. Walworth avoids this by providing optimally safe solutions at the best cost. We understand that efficient projects, completed on time and on budget, are the best way to ensure that more and more projects come to fruition. 

Q: What is the profile of your key commercial clients?

A: We are proud to have a diversified client base. Walworth often collaborates with engineering firms, including the Mexican Petroleum Institute (IPM), or the end users' own conceptual engineering teams at the very early phases of a project. We also help them understand how to put together their business and financial models.

Much has changed with the government. Like many companies in the sector, we were preparing ourselves to diversify our client base and welcome more openness as well as greater private participation in the upstream segment. However, PEMEX grew its activities on its own, which in a way compensated for what we were forecasting. It is very difficult to say how the industry will develop. We have seen interesting activity coming from some of the private operators but critical mass is still missing in the private sector to really capitalize on the country’s potential, especially with today's elevated crude oil prices.

Q: What is your role within PEMEX’s landmark projects as a highly experienced Mexican company?

Backed up by our many years of experience, state companies in Mexico are Walworth’s biggest customers. We see ourselves as a partner and strategic supplier to PEMEX. Walworth has been close to PEMEX’s strategic projects, including the refinery in Dos Bocas and the reconfiguration of its other refineries.

In 2022, we supplied a massive package of Mexican-made valves to the Olmeca refinery in Dos Bocas. This marked a record for the number of pieces sold to a single project. Olmeca has been our largest and most important project, where we are like a cornerstone. A large percentage of the valves in that refinery were built in Mexico and are of the Walworth brand, as the government strived to include a high level of national content in its key infrastructure projects. Walworth is looking forward to finalizing Dos Bocas in 2023. We are also working on the Tula refinery in Salina Cruz.

Q: What does nearshoring mean for your operations?

A: We will probably gain more local competition. Ninety percent of our competitors now come from abroad but we welcome them here since competition strengthens the brand. The war in Russia highlighted that certain strategic supply chains are better off existing close to the market. We would like to see more small companies investing in Mexico.

Q: How is the company contributing to improving the country's midstream distribution infrastructure?

A: Of all the companies that form Walworth Group, the oldest is a pipeline supplier, with which we worked on projects in both the private and public sectors. We also have a third company called GPT services that specializes in pipeline services, working like a heart surgeon while carrying out maintenance of pipelines and interconnections, without interrupting the service or the continuity of the pipeline fluid.

We are also bringing in new business lines, like a joint venture with an Indian-English company, Woodfield Systems. Here, Walworth is supplying loading arms for fields of liquefied natural gas (LNG) or petrochemicals as a new, exciting venture. Woodfield is also our strategic partner in Dos Bocas, which is based on India’s largest refinery, the Jamnagar Refinery developed by Reliance Industries, which is three times the size of Dos Bocas. 

Walworth is ALSO highly active in midstream activities for both government and private companies. Natural gas is crucial for us. We are continuously improving and adding solutions for private operations and the public entity CENEGAS.

The opportunities in 2023 are related to regulation and permits. This is a great opportunity. Mexico, especially the west coast, is a gateway for the Asian gas markets. Our natural gas prices are among the cheapest in the world. We are interconnected to the US through several pipelines but further infrastructure is still missing. Mexico could also benefit from its own gas exploration and production. We expect more pipeline interconnections coming from private players in Mexico but the most important opportunity is selling LNG to other markets. Many such projects will materialize in Mexico and we are here to serve them.

Yet another opportunity is the fertilizer supply chain. Mexico has vast agricultural areas. We hope to see private investment in this kind of approach

Q: What opportunities do you see in storage projects in Mexico? 

A: Undeniably, liquid fuel storage has been a challenge in Mexico for the longest time. People in the natural gas industry tend to say that the storage in the country is whatever amount of gas we have in the pipelines, meaning there is little buffer room. PEMEX constructed the last storage infrastructure in Chiapas around 15 years ago. There has been news about private companies investing in new storage terminals but this has also slowed down a bit because of external factors. 

Nevertheless, storage equals energy security. Hopefully, both government and private players can reach agreements to bring this much-needed certainty to the market.

Walworth provides services, equipment and parts for the integration of fluid management solutions in the oil and gas, power generation, chemical, mining, pulp and paper, cryogenic, geothermal, drinking water, drainage and wastewater treatment sectors, among others.