Strategic alliances form as market grows for gas turbine repair

Paul Boughton

A combination of older turbines and new market opportunities is driving both the maintenance business and new alliances between suppliers. Eugene McCarthy reports.

The global market for gas turbine maintenance, repair, and overhaul (MRO) in the power industry is expected to reach US$14.48 billion (EUR10.41 billion) in 2018, according to global management and market research firm Lucintel.

In a new study, Lucintel describes how the industry faces a challenge to recruit and retain skilled labour. At the same time, the price of labour is rising - creating a major concern.

The report also finds that turbines installed between 1980 and 2000 are the major drivers for the increasing maintenance segment as older technology requires more repairs.

Shale gas

On the other hand, new power opportunities are presenting themselves especially in terms of shale gas developments and other oil- and gas-related activities.

One such beneficiary is Rolls-Royce, which has just been awarded a US$138 million (EUR99 million), five-year services contract by Petrobras, a world leader in deep and ultra-deep water oil and gas exploration and production, to support its oil production activities offshore Brazil.

The company is to supply Petrobras with advanced maintenance and repair services to support 15 Rolls-Royce RB211-G62 industrial gas turbine power generation units which are installed on four Petrobras oil platforms operating in the petroleum rich, pre-salt Campos Basin.

The four Petrobras platforms, which together can produce over 500,000 barrels of oil per day, or 25 per cent of Brazil's entire output, are reliant on nearly 375MW of Rolls-Royce generated power to maintain a consistently high production output. The long term service agreement (LTSA) contract, which has a potential value of up to US$220 million (EUR158 million) over its five-year renewal period, will help ensure that the Rolls-Royce units continue to operate at peak performance levels of efficiency and reliability.

Eberaldo de Almeida Neto, general manager, Rio de Janeiro operational unit, Petrobras, said: "Over the past five years Rolls-Royce advanced power generation technology and services has helped us to meet our oil and gas production objectives for these important oil platforms.

"We are delighted to strengthen our relationship with Rolls-Royce and look forward to continued high levels of availability and reliability."

Over 50 Rolls-Royce engineers and technicians are working on the project, most based full-time on the four oil platforms.

The Rolls-Royce energy workshop at Macae in Brazil supports their work (Fig. 1) and later this year the company will inaugurate a new, US$100 million (EUR72 million)-plus investment, purpose-built gas turbine package, assembly and test facility in Santa Cruz in the state of Rio de Janeiro, further strengthening its local, in-country manufacturing and services presence.

It's a similar story for Wood Group GTS which has secured a multi-million dollar, five-year contract from Talisman Sinopec Energy UK to provide turbine maintenance support services for 22 Siemens Ruston gas turbines operating on the Buchan, Clyde, Tartan and Flotta installations in the North Sea. The contract comprises TB5000, TB5400 and TD4000 gas turbine models.

Wood Group GTS will provide a comprehensive scope of work, including contract management services, preventive maintenance scheduling and execution, 24/7 technical support, unplanned breakdown support, and engine supply and overhaul services.This contract award marks an important milestone in the relationship between Wood Group GTS and Talisman Sinopec Energy UK and follows a 10-year turbine fleet maintenance contract between the two companies which concluded in 2013.

Strategic alliance

Another new relationship just forged is between Turbine Services & Solutions (TS&S) and Greenray Turbines. Under a strategic alliance, the two companies will come together to provide complete and comprehensive service support to operators of gas turbine driven equipment. This will provide service and support solutions for complete turbine packages which will be made available worldwide to operators of industrial gas turbine driven packages in the power and other process industries.

"Operators of gas turbine driven packages have asked for this type of comprehensive coverage for a very long time. We are a strong team, Greenray and TS&S, by combining our expertise we are able to meet the challenge. Simply put this is flange-to-flange support," said Ahmed AlMoosa, ceo of TS&S. "This service includes the gas turbine, power turbine, driven equipment and all of the supporting ancillary sub-systems."

As part of the undertaking, a service centre will be established within TS&S's facilities at the Abu Dhabi International Airport. The service centre will be up and running in this year.

Greenray is the exclusive original equipment manufacturer service provider for GEC gas turbine package equipment originally manufactured by Siemens, and the exclusive OEM service provider for RT65 and RT66 Cooper Bessemer gas turbine packages.

"This alliance provides Greenray with a regional service base for our growth in total turbine package solutions, particularly supporting the Middle East, Central Asia and surrounding countries," said Greenray ceo Iain Lister.

New global integrated rotating equipment service provider

Wood Group and Siemens have entered into an agreement to form a joint venture (jv) consisting of the maintenance and power solutions businesses of Wood Group GTS and Siemens' TurboCare business unit which provides aftermarket gas turbine, steam turbine and generator design, repair and manufacturing services

The JV will bring together two organisations with complementary strengths, customers and geographic exposure and will benefit from OEM know-how, say the companies. The JV is expected to deliver annual net synergies to Wood Group of around US$15 million (EUR11 million) over three years.

The shareholding of the joint venture will be split 51 per cent Wood Group: 49 per cent Siemens. Wood Group currently expects that a further payment of up to approximately US$70million (EUR50 million) will be due from the JV to Wood Group.

Completion is subject to a range of approvals and is which are expected to be arranged very shortly.

Commenting on the new deal, Wood Group GTS ceo Mark Dobler said: "The JV will bring together Wood Group's capabilities in the areas of asset operations, maintenance, risk management and life-cycle optimisation with the aftermarket design, repair and manufacturing capabilities of TurboCare to deliver greater flexibility, greater market reach and an expanded footprint to service customers. The JV will be a significant integrated rotating equipment service provider to the global power generation, oil and gas and industrial sectors."

The JV will have approximately US$1billion (EUR720 million) in revenue and 4500 employees around the world.

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