Pigging: An Essential Midstream Component

As the industry’s premier publication, Midstream Business is expanding its coverage in 2013 by focusing on one key midstream segment in each issue, including a list of the players, their product specialties and expertise. In the months ahead, look for coverage highlighting firms engaged in engineering, environmental, processing, compressor manufacturing, automation and control, operators and more.

The topic in this issue is pipeline pigging, which is the practice of using pipeline inspection gauges, or “pigs,” to perform various maintenance operations or measurements on a pipeline. As a result of robust midstream activity, pigging has become a crucial component in the midstream sector, and many say it’s a great time to be in the business.

Midstream Business interviewed a handful of executives for a review of the industry and a look ahead to the future.

Active industry

With increased shale play activity, the race to improve aging infrastructure and the move toward more stringent regulations, there will be increased use of “dumb” and “smart” pigs. Dumb pigs are typically used for pipeline cleaning and routine maintenance while smart pigs contain high-tech devices to locate record corrosion and other potential pipeline flaws. According to one industry executive, the pigging business is on the rise and with the growth of the U.S. oil and natural gas market, business could be booming for the next 25 years.

“It is going to continue to grow and be successful,” Larry Payne, market development manager for the pipeline services and pigging solutions division at T.D. Williamson (TDW), tells Midstream Business. “There is a lot of gathering and transmission pipeline infrastructure to be built, and with pipelines, comes pigging.”

TDW has been in the pigging business since 1943, when the company began providing scrapers, later known as “pigs,” for the War Emergency Pipeline System, which was built to supply the East Coast and Armed Forces in Europe with much-needed crude oil and petroleum products. Today, TDW is building on that business with the success of the American shale plays. According to Payne, TDW has seen significant growth in all of its products and services due to the shale market, with a forecast for continuation of that growth for the next several years.

In the shale plays, operators are producing large amounts of natural gas liquids (NGLs) in wet-gas systems and paraffin in crude oil systems, he said, and that is helping drive the company’s dumb pig business, as operators look for ways to ramp-up and maintain production. Flow optimization, internal corrosion and the need for automation are the industry needs identified by TDW.

“The other thing we are seeing in the shale plays are the corrosive materials produced from the wells, which will eventually cause internal corrosion issues,” Payne says. “We find several operators have not planned for internal corrosion problems and are becoming concerned, so pigging is partly an answer to this.

Pig automation

“We have also seen the need for automating certain pig launchers and receivers. Running a pig may take two to three hours before the launch, and when you have a gathering system, you may have 50 to 60 pig launchers and not enough people,” he says. “So they [customers] like the fact that you can automate these things, which they can launch automatically on a time or remote-signal basis. We are seeing that as a big driver in this business.” In 2002, Congress passed the Pipeline Safety Improvement Act (PSIA), which requires integrity inspections of a pipeline be performed on a regular basis. Three methods of inspection were approved by the PSIA, including the use of an “internal inspection device,” better known as a pig. These regulation requirements, coupled with the expectations of even more stringent regulations, have been a boon to those in the industry.

“Integrity regulations are leading to an increase of preventative maintenance for many pipelines,” Brett McNabb, product specialist with Apache Pipeline Products, tells Midstream Business. “There is a lot of large-diameter work on the horizon over the next year or so, and with the federal regulations, it seems that everyone is gearing up to do a lot more pigging, which is a good thing for everybody.”

The company has been producing pigs and pigging equipment since its inception in 1986. Since then, the company has been producing standard, or dumb pigs, and equipment for distributors and operators worldwide. Keeping track of where its products go is a difficult task because Apache is a manufacturer in the true sense of the word, McNabb says. But, with the maturation of the North American pipeline systems, it’s not hard to figure out how they are being used.

“What it boils down to is that a lot of these lines are getting older. They were constructed a number of years ago, and I am sure it was assumed that integrity issues that have cropped up over time would not be as large an issue with many of these pipelines today,” McNabb says.

“As pipeline infrastructure gets older, the demand continues to increase,” Mark Slaughter, Weatherford’s ILI Global Product Line manager, tells Midstream Business. “Many older pipeline systems were not designed to be pigged with smart pigs. Unfortunately, as these pipelines age, integrity threats such as cracks and corrosion have increased. In order to mitigate these threats, pipeline operators have invested heavily in modifying pipelines and performing more smart-pig inspections. I think it will continue to be the older pipelines that will drive the demand for our service.”

Capitalizing on that increasing demand, Weatherford, according to Slaughter, formed its pigging business seven years ago through an acquisition, a move that, he believes, was a very good decision. “We saw this as a good organicgrowth engine for us,” he says. “This acquisition provided a platform for Weatherford to leverage its R & D [research and development] and commissioning capabilities for stable, organic growth. The smart-pig service offering has become an excellent growth engine.”

Business is good, and the demand for pigs is on the rise, which, says Slaughter, calls for constant vigilance on the company’s part to keep up with customer and technology demands.

“It takes a huge financial and engineering investment, to keep up and grow globally,” he says. “The technology does continue to change and the demands of the customers continue to change in terms of the type of tool they want and the design requirements of that tool.”

Challenges

Despite the good news out there for the pigging industry, these companies, as well as their competitors, still face a slew of challenges. The economy and its effect on the workforce wane on the minds of those throughout the industry. Staffing, according to McNabb, proves to a challenge for Apache.

It is an ongoing battle to obtain and retain key personnel for specific roles within the organization, McNabb says. “Labor is our big Achilles heel, and it’s been tough,” he adds.

Weatherford, which has seen its business grow 20% year over year and, according to Slaughter, predicts huge global growth, finds the challenge is keeping pace with the increasing demand. “We see the growth on the horizon, and we are moving quickly to prepare for this increase in demand. Our clients take pipeline integrity very seriously, so we must provide optimal service coupled with the technology.”

Each and every company offers something different, whether it is a customer-driven focus, a historically proven track record, or immense domain knowledge of the pipelineintegrity industry. What’s clear is that the pigging industry is continuously improving its service offerings to stay ahead of customers’ ever-increasing needs, as the adjoining list of pigging companies operating in North America indicates.

“Pigging is good,” Payne says. “And, it’s going to get better; it’s getting better. I think this is a merging need for midstream producers. Pigging is becoming more important, companies are interested in it, and they are seeing the need for it.”