The upstream oil & gas opportunities for pump sales are centered on two prominent applications: wellhead and pipeline, dealing with crude oil & gas production and transport, respectively. These applications are demanding on pumps due to harsh application conditions and the associated need for high reliability, performance and safety.
To address these conditions, petroleum-industry pumps are governed by a body of stringent design and performance standards. The most prevalent pump standard, published by the American Petroleum Institute, is API 610, which addresses the widely used end-suction centrifugal pumps. A similar standard, published by the International Standards Organization, is ISO 13709. Other standards include API 685 for sealless magnetic-drive pumps (MDPs) and canned-motor pumps (CMPs), API 620 for high-pressure and cryogenic pumps, and API 674 for positive displacement reciprocating pumps, to name just a few.
Opportunities for wellhead applications are broadly projected based on the Baker Hughes Rig Count, which provides a leading metric for the upstream oil & gas industry. This metric turned positive in 2017 and in the early months of 2018, although almost exclusively in North America (see Chart 1).
Wellhead pumps are required in a range of applications, some during the drilling phase and others after the start of production.
Piston pumps (drilling phase)
A pump that has gotten quite a lot of ink over the past five to ten years, especially in North America, is the so-called ‘fracking pump’. These pumps are positive displacement three-piston or five-piston (triplex or quintuplex) reciprocating types capable of developing extreme pressures required to fracture shale formations to release entrapped oil and gas. They are a critical factor for unconventional wells with horizontal drilling.
These pumps are also used at the wellhead for mud pumping, cement pumping and acid injection during the drilling phase. Smaller-sized triplex pumps are often used for power washing, as well. The large fracking pumps are usually trailer-mounted and driven by large diesel engines. The duty is extremely demanding, and the pumps require nearly constant refurbishment at intervals of several months or less to replace critical components.
In boom times, these pumps are big business, amounting to multiple hundreds of millions of dollars per year (collectively) for the relatively few suppliers. In down times, the opposite is true, and the market may be saturated with aftermarket sales of idled equipment.
Artificial lift pumps (production phase)
After a well has been drilled and completed, there is still a requirement for pumps of various types throughout the production lifetime of the well. In many cases, it is necessary to “refrack” a well by bringing back the mobile fracking truck at a certain interval after production has commenced. This may be required to keep product flowing at a profitable rate.
Well-production drop-off profiles are the subject of ongoing and intensive study for fracked wells to optimize payback in a highly competitive environment. Another prominent wellhead pumping application relates to artificial lift. Artificial lift provides a means to assist oil and gas extraction for well fields that do not provide sufficient natural pressure for the free-flow of product to the surface, or for older wells operating in partially depleted, low-pressure fields.
Although not all oil wells require pumps for artificial lift, the majority do, particularly in North America and especially later in the life-cycle of the well. In some regions, such as the Middle East, it may be more cost-efficient simply to move on to a new well, but that is changing. There are multiple types of artificial lift pumps, with the major ones being described below.
Possibly the most visibly prominent type of pump, at least in North America, is the sucker-rod positive displacement pump. Sometimes colloquially referred to as “nodding donkey”, it is familiar to any road traveler in the United States. Another type, the centrifugal electric submersible pump (ESP), is growing in popularity, especially for subsea applications.
Other pumping systems include plunger lift systems, in which a plunger is lowered and then raised in the wellbore to bring product to the surface, and hydraulic pumping systems, in which a piston pump is lowered into the wellbore to provide hydraulic pressure for efficient lifting of product to the surface.
Progressing cavity pumps (PCP) are becoming increasingly popular as well for artificial lifting because of their capacity to handle multi-phase liquids common to upstream oil & gas. And finally, there is an additional system called a gas-lift system where high-pressure gas is injected into the fluid column to lower the density of the product and allow the natural reservoir pressure to bring the mixed oil, water and gas to the surface.
The specific pumping technology employed reflects consideration of cost, the characteristics of the reservoir and the characteristics of the product, including viscosity, gas content, water content, sand and gravel content and other factors. The market for artificial lift systems is substantial and much larger than the already sizeable pressure pumping (fracking) market. The market value for artificial lift systems is estimated to be considerably above $10 billion per year in boom times, but significantly lower in recessionary times. However, even in a down-market environment, there is still a demand for artificial lift pumps because they provide a more cost-effective alternative to drilling new wells.
Other wellhead pumps (production phase)
There are other wellhead pumping applications employed throughout the lifecycle of the well, such as downhole pumping of various chemicals for enhanced oil recovery (EOR). Chemicals may include diluents to lower the viscosity of the oil, antiscalants to prevent plating out of deposits on pipes and valves, antibacterial and anti-corrosion agents and mono-ethylene glycol (MEG). MEG injection is often accomplished using smaller sizes of triplex piston pumps to deliver the chemical at high pressure into the wellbore. MEG injection is instrumental in preventing the formation of hydrates (icing up) in the wellbore, particularly in subsea applications.