NEWS RELEASE April 2019
The Lowest Total Cost of Ownership Cycle for Oil and Gas CFT Products
The Most Profitable Market (MPM) Program entails identifying markets where products with lower total cost of ownership can be developed and then evaluating the market potential. This is better done holistically. This approach involves knowledge of the processes and the products in each process. The silos between industries need to be penetrated and collaboration among disparate suppliers encouraged. A good case in point is the use of resin bonded sand for hydraulic fracturing. Dow Chemical introduced a new resin for sand coating in 2014. The polyurethane offers more elasticity than phenolics. As a result the fractures do not collapse. Collapsing leads to sand particles in the product. As the product is transported by the electric submersible pump, the sand abrades the impellers. Pumps with an initial cost of over $100,000 can experience life cycles measured in months.
This life has been extended when resin coated sand is utilized. The overall cost of oil extraction is lessened. With lower feedstock costs, the resin is less costly to manufacture. This can lead to lower resin prices and even more reason to select resin coated over uncoated sand.
This cycle can be useful to pump companies such as Veretek. They cite a case where their new V pump lasted for one year whereas the original ESP pump lasted only three weeks. In other cases the difference in pump life has been less. How much more can the owner afford to pay for the Veretek pump? The evaluation of the resin bonded sand alternative has to also be considered. The market potential for Veretek is impacted by the resin bonded sand effect on pump erosion and by the additional cost of the resin coated sand.
Preferred Sands partnered with Dow in the introduction of the Dow coating. How much more can they charge for resin coated sand? Are the purchasers fully aware of the cost of sand erosion on pumps or the ability of the Preferred Sands proppant to reduce that cost?
The holistic approach is integral to the Most Profitable Market Program. More details on this program are shown at http://home.mcilvainecompany.com/index.php/component/content/article/30-general/1469-most-profitable-market-program