NEWS RELEASE                                                                                                    JULY 2014

Market for Water and Wastewater Treatment Chemicals in China Will Be $5.7 Billion Next Year

China will be the leading purchaser of water and wastewater treatment chemicals in 2015. Purchases will exceed $5.7 billion according to the latest forecast in McIlvaine Water and Wastewater Treatment Chemicals World Market. Corrosion inhibitor purchases alone will exceed $1.4 billion.

($ Millions)     

  

Subject

  
  

2015

  

Total

 5,751

 Activated   Carbon

 151

 Chelants

 175

 Corrosion   Inhibitors

 1,442

 Defoamers

 121

 Inorganic   Flocculants

 607

 Ion   Exchange

 209

 Odor   Control

 250

 Organic   Flocculants

 800

 Other

 258

 Oxidizers   & Biocides

 584

 pH   Adjusters

 270

 Scale   Inhibitors

 884

One of the big drivers in China is the coal sector. Here is the Chinese coal production for last year compared to a very approximate estimate of coal production in 2025:

                                                                   Chinese Coal Consumption

Coal Use

Million Tons 2013

Million Tons 2025

Large   electric power

2,500

3,000

Residential

50

0

Industry

300

50

Heating

100

50

Steel   and other ( coke)

400

700

Coal-to-gas   including CBM and UGG

50

700

Coal-to-chemicals   and fuel

120

800

Total

3,520

5,300

To put this forecast into perspective, the U.S. is the second largest coal producer at 1 billion tons per year.  China is building a number of coal-to-chemicals and fuels plants which will use 1.5 times as much coal as the entire U.S. power industry. The total coal consumption in 2025 will be more than five times that of the U.S.

The Chinese program for conversion of coal to pipeline gas involves large treatment chemical expenses.   The coal is being mined in relative arid northern and western regions. Zero liquid discharge will be a high priority, so flocculants, scale inhibitors and pH inhibitor expenses will be substantial. Corrosion control chemical expenditures will be very sizable.  The main conversion technology will utilize indirect gasification which creates a number of corrosion control challenges.

For more information on Water and Wastewater Treatment Chemicals World Market,click on: http://home.mcilvainecompany.com/index.php/markets/27-water/449-n026-water-and-wastewater-treatment-chemicals

NEWS RELEASE                                                                                                                JULY 2014

Commercial Air Filter Sales to Approach $2 Billion in 2015

Sales of air filters for commercial and institutional buildings will reach just under $2 billion in 2015. This is the conclusion of the McIlvaine Company in Air Filtration and Purification World Market.

Commercial Air Filter Revenues ($ Millions)

Bott     

  

World    Region

  
  

2015

  

 Total

 1,965  

 Africa

 56  

 CIS

 87  

 East Asia

 674  

 Eastern Europe

 41  

 Middle East

 44  

 NAFTA

 586  

 South & Central America

 40  

 West Asia

 69  

 Western Europe

 368  

China is the world’s leading purchaser of commercial filters. This is due to several factors. One is the high rate of growth of the commercial building industry. Another is the high particulate levels in ambient air. This results in more rapid filter replacement than in countries with relatively clean air.

The Chinese construction industry recorded a nominal CAGR of 19.99 percent in 2009–2013. The infrastructure and residential markets collectively accounted for 72.3 percent of the total construction industry in 2013 and are expected to grow at 9 percent CAGR due to increased public investment, urbanization and the strong demand for housing.

Twenty years ago the U.S. was the center for HVAC, but now China holds the number one position.

In terms of air conditioning unit sales in China, Japanese manufacturers Daikin, Hitachi, Toshiba and Samsung command more than 30 percent of the market. Daikin also owns AAF and is one of the largest air filter manufacturing companies in the world. Western companies York, Carrier, Trane and Dunham-Bush have more than 25 percent market share for air conditioners in China. Haier, Gree and Midea account for more than 20 percent of the market.Other suppliers are Hisense, Panasonic, Kelong, Glaze, Aux, Chigao, Mitsubushi, Samsung, Changhong, Chunlan, TCL, Hitachi, Sharp, Fujitsu General, Sanyoo and LG.

China can be divided into five climatic zones, each of which has different filtration needs:

  • Severely cold, e.g. Heilongjiang province, where heating is very important for most of the year,
  • Cold, e.g. Beijing, where heating is necessary from October to March, while cooling in summer is not a big problem,
  • Hot in summer and cold in winter, e.g. Shanghai and nearby provinces, where cooling in summer and heating in winter are necessary,
  • Warm, e.g. Guangdong and Fujian provinces, where heating is not necessary and cooling is needed in summer,
  • Hot, e.g. Hainan province, where cooling is needed all the year.

Buildings contribute up to 25 percent total energy consumption in China. (Sixty percent is for heating and cooling.)

The fast economic development and the increasing living standards of people in China have prompted a new wave of building construction. Since the year 2000, 1.5 billion m2 area of buildings have been built every year, and this is projected to continue until the year 2020. International companies are now conducting research in China. In Feb. 2004, Trane founded its R&D center in Shanghai. York founded its Asia Pacific R&D center in Nov. 2004 in Wuxi. The Carrier R&D center started to function in 2006.

Air filters are used in both the central HVAC systems and for room air conditioners. One of the trends boosting revenues is the trend to select the more efficient and expensive F5-9 filters as opposed to the less expensive and efficient H1-4 design. Concerns about air pollution and health have influenced Chinese building owners to upgrade to more efficient filters. Another driver is energy consumption. Dirt on air conditioner coils increases energy consumption.

For more information on Air Filtration and Purification World Market, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/108-n022

NEWS RELEASE                                                                                                                JULY 2014

Potential $200 Billion Market to Convert Simple Cycle Gas Turbines to Combined Cycle Operation

There is the potential to upgrade existing gas turbine plants by converting them to combined cycle operation. The cost will be $200 billion and will add 160,000 MW of additional capacity while reducing CO2 and other pollutants per unit of power produced. This is the conclusion reached by the McIlvaine Company in Gas Turbine and Combined Cycle Supplier Program. (www.mcilvainecompany.com)

The United States has been upgrading existing power plants and reducing emissions per unit of energy produced. CO2emissions from U.S. power plants in 2013 were 20 percent lower than 1997 levels, thanks to the shift to CCGT technology. Reductions in NOx and SO2emissions were even greater, dropping 40 percent and 44 percent, respectively. This is due to the installation of additional emission control equipment.

The GRF Tracy San Joaquin County conversion from 169 to 314 MW cost approximately $232 million or 1372/kW based on the simple cycle rate. From a different perspective, 145 additional MW will be generated at a cost of $1600/kW. The average cost, worldwide, is forecast by McIlvaine at $1000/kW of single cycle operation. There are presently 1.1 million MW of installed gas turbine capacity in the world. There is the potential to add combined cycle operation to 200,000 MW at an investment of $200 billion.

Individual upgrade projects are tracked in the program. Here are some examples:

The Rolling Hills Generating Facility in Vinton County, Ohio is proposing to convert from a simple cycle. The current facility utilizes five natural gas-fired combustion turbines. The conversion would require expansion and redevelopment of the current generating facility, adding four heat recovery steam generators and two steam generators to four of the combustion turbines. One combustion turbine would remain as a simple cycle unit. The capacity will expand from 860 MW to 1,414 MW. The proposed conversion is estimated to cost $865 million ($1000/kW). Conversion of the plant would use all five of the existing Siemens 501FD2 natural gas-fired combustion turbine generators. The combustion turbine remaining in simple cycle configuration would have a nominal output of 172 MW. Four of the five combustion turbines would be coupled to Heat Recovery Steam Generators (HRSGs) and each would be equipped with 550 million British thermal units per hour (MMBtu/hour) duct burners. Each pair of gas combustion turbines would be combined with HRSGs and a steam turbine generator set to create 2 x 1 power blocks, each with a nominal output of approximately 621 MW. This company is affiliated with Tenaska Capital Management LLC.

Tampa Electric Polk station is converting four units to combined cycle operation and will increase generating capacity to 1400 MW. SCR will also be installed on all units. The project started earlier this year and will be completed in 2017.

The Empire District Electric Company (Empire District) owns and operates the Riverton Power Station) located in Riverton, Kansas. It currently consists of two boilers and four simple cycle combustion turbines. The combined cycle unit will have a nominal capacity of 250 MW. This will require the addition of a heat recovery steam generator (HRSG) with supplemental natural gas duct firing (duct burners) and a condensing steam turbine generator. The project also includes a cooling tower and an emergency diesel generator. An SCR will control NOx and a CO catalyst will control carbon monoxide (CO) and volatile organic compound (VOC).

Siemens has been awarded the contracts for the combined cycle conversion of two simple cycle power plants in Argentina by Unión Temporal de Empresas (UTE) a joint venture between Isolux Ingeniería and Inversora Andina Ibérica. The simple cycle plants, Ensenada de Barragán and Brigadier López, were originally designed and supplied by Siemens and are owned by Argentina's national energy company, ENARSA. Siemens will supply the power island equipment to close the combined cycles for these two plants, which will result in an additional 140 MW of power for Brigadier López and 280 MW additional for Ensenada de Barragán with no additional fuel consumption. The power plants are scheduled to achieve commercial operation in the fall of 2014.

AES Dominicana has selected Tecnicas Reunidas of Spain to lead the project to convert Dominican Power Partners’ (DPP) power generating asset to combined-cycle. The conversion project will raise the current plant output from 210 MW to 324 MW.

In Saudi Arabia the 1300 MW Riyadh City simple cycle plant is being converted to combined cycle operation. Some units are already installed and the rest will be operating by middle 2015. The upgrades include:

  • Forty (40) nos. Vertical/Horizontal Single/Dual      Pressure Heat Recovery Steam Generating (HRSG) units with natural      circulation,
  • Ten (10) nos. Steam Turbine & Generator,
  • Ten (10) Air Cooled Condenser,
  • Boiler feed pump system and its associated auxiliaries,
  • Continuous Emissions Monitoring System (CEMS) to      monitor stacks emissions.

Kawasaki has converted a number of plants from simple to combined cycle. These include:

Malaysia/Gelugor
GE Frame 9E x 2 converted to Combined Cycle
Myanmar /Ahlone
GEC-Alsthom Frame 6 x 3 converted to Combined Cycle

Myanmar/Hlawga
GEC-Alsthom Frame 6 x 3 converted to Combined Cycle

Myanmar/Tharkayta

Hitachi Frame 5 x 3 converted to Combined Cycle

Black & Veatch has executed the design and construction of several combined cycle conversions

including a conversion to a 2 x 1 configuration in California involving “F” class turbines and a conversion to a 3 x 1 configuration in Malaysia involving “E” class turbines.

For more information on the Gas Turbine and Combined Cycle Supplier Program, click on: http://home.mcilvainecompany.com/index.php/markets/28-energy/610-59ei

NEWS RELEASE                                                                                                                JULY 2014

Major Changes in Oil and Gas Supply and Demand Outlook

The picture changes day by day in the oil and gas industry. Some recent developments promise to alter many of the forecasts. The developments include:

  • Turmoil in the Middle East
  • Uncertain Russian gas supply
  • Regulations on flaring and completion
  • Chinese coal-to-gas program
  • Development of small scale LNG and gas-to-liquids plants.
  • Movement toward gas-fired vehicles

These new developments have been incorporated into the latest forecasts in McIlvaine Oil, Gas, Shale and Refining Markets and Projects. (www.mcilvainecompany.com)

Turmoil in the Middle East: The strife in Gaza, Iraq, Syria and other Middle East countries continues to threaten the supply of oil and gas from the entire region. EIA boosted the forecast for Brent crude to $109.55 for this year from $107.82. Next year’s forecast was raised to $104.92 from $101.92. Price forecasts were raised primarily because of the problems in Iraq.

Uncertain Russian Gas Supply: Europe and China are both counting on substantial gas imports from Russia. The downing of the Malaysian airlines plane caused oil prices to surge to $3/barrel and reflected concerns about the future of Russian integration into the world market.

Regulations on flaring and green completion: Environmental concerns relative to the emission of methane, CO2 and organic hazardous air pollutants are resulting in regulations which will change the industry. North Dakota has a new rule to prohibit flaring. This gas will be captured and converted to products adding $100 million/month to oil and gas revenues in the State.

Chinese coal-to-gas program: The various government forecasts of Chinese oil and gas supply and demand have not taken into account the magnitude of Chinese plans to use syngas derived from coal. The following chart compares the industry forecasts to those compiled by McIlvaine.

                                                 Gas Use In China in 2025   (bcm)

Source

Industry   Forecast

McIlvaine   Forecast

Conventional extraction

100

100

Shale gas extraction

60

50

Pipeline imports

70

50

LNG Imports

80

40

Coal-to-gas including CBM and UCG

80

200

Total

     390

440

The Chinese government has decided that it is much more attractive to convert coal in western and northern China into gas and pipe that gas across country. The projects already underway plus those in the planning stages would result in 200 billion cubic meters per year (bcm) of domestically produced gas in 2025. That would be twice as much as would be extracted conventionally and would equal the combined conventional, shale and pipeline imports.

With the McIlvaine forecast based on the very recent announcements by the Chinese government, long-term LNG imports would be lower by more than 40 bcm. This has major implications for LNG exporters in the U.S. and Australia.

Development of small scale LNG and gas-to-liquids plants: The lower demand for LNG in China will lead countries such as Australia to divert a portion of the gas supply from large to small LNG plants. The iron mining industry in Australia can take advantage of stranded shale gas supplies near the mines and can convert this gas to LNG to operate the mining vehicles and supply fuel for heating and power.

Movement toward gas-fired vehicles: The movement toward LNG fired vehicles is accelerating  It is lower in cost and emissions. Demand is coming from the trucking, marine and rail industries.

All these factors promise to materially affect the prices and consumption of oil and gas products. For more information on Oil, Gas, Shale and Refining Markets and Projects, click on: http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049

NEWS RELEASE                                                                                                                JULY 2014

Granular Media Filters Will Account For 26 Percent of the $6.6 Billion Liquid Filtration Market In 2015

Sales of macrofiltration equipment and consumables will reach nearly $6.6 billion in 2015. The granular media segment will generate revenues of $1.7 billion or 26 percent of the total, this is the conclusion reached by the McIlvaine Company in Liquid Filtration and Media World Markets.

 NR1973

The largest use of granular media filters is in drinking water plants.  However, they are used for pre-filtration of intake water at many industrial plants.  They are also used to purify wastewater.  The second most popular filter type will be filter presses.  This design is used to dewater products and waste. Filter presses are capable of converting 5 percent slurry to moisture levels below 10 percent. The presses are widely used in the chemical industry where the substance dewatered is the chemical product.

Automatic backwash filters represent the category with the largest growth over the last twenty years. These units are capable of removing particles as small as 25 microns in diameter. Amiad and Eaton are leading suppliers of this filter type.

Belt filter presses are primarily used to dewater municipal sludge.  Small numbers are also used in coal mining. The food industry also uses these presses to dewater wastes.  Bag filters are used where small particles must be removed from liquids which contain relatively small quantities of solids.  Unlike the other filter types, the bags are not cleanable.

For more information on Liquid Filtration and Media World Markets, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/118-n006

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