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Improving pipeline efficiencies – part 1

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World Pipelines,

QS Energy, Inc. – a developer of integrated technology solutions for the energy industry – has released a statement by Greggory M. Bigger, CEO and Chairman of the Board, in response to comments made by Saudi Arabia oil minister Ali al-Naimi at an energy industry conference concerning OPEC pricing policies.

Speaking at the IHS CERAWeek conference in Houston, Texas (USA) on 23 February, Mr. Naimi vowed to let oil prices continue to decline if necessary, virtually ensuring a continuation of depressed global oil prices and further stagnation of the US energy sector.


"It's important for the public and the domestic energy industry to focus on the core reason for the downturn in oil prices, which has lasted from the summer of 2014 until the present day," Mr. Bigger stated.

"In 2009, a surge in crude oil production from the US ran up against weaker global demand following the Great Recession, triggering a downward pricing curve, and effectively putting US shale production in the position of influencing the global crude oil spot price. The resulting revenue shortfall for petro states such as OPEC members Saudi Arabia, Venezuela, Qatar, United Arab Emirates, Iran, Libya and Kuwait, caught OPEC leadership off guard, and they've been driving prices down in a misguided effort to protect their market share ever since."

Countering crude prices

To counter falling crude oil prices, the global energy sector has been aggressively cutting away at operating overhead and striving to keep costs in line with drastically revised revenue projections.

As the CEO of QS Energy, Mr. Bigger says he has seen firsthand the potential economic benefits of optimising the performance of the world's pipeline infrastructure. Crude oil pipelines carry close to 90% of oil transported in the US, with roughly 60 000 miles crisscrossing the nation.

"In a down cycle such as this, obviously the key is to trim costs, remain solvent and survive until prices inevitably return to normalised levels," he commented. "Many of today's operators can squeeze out further efficiencies in operations, especially in the transport of crude oil. Our analysis of pipeline infrastructures here in North America, Europe, the Middle East, Africa, and other oil producing regions typically shows we can increase capacity by 1 - 3% or 4%. Higher flow volume translates into increased daily tariff revenue for the pipeline operator, often by US$1 500 000 per month or up to three times that amount, depending on volume transported. Furthermore, by reducing energy consumption at pump stations, and improving energy efficiency by 2 - 10%, we can effect OPEX savings by tens of thousands to hundreds of thousands of dollars monthly."

Crude testing

In co-operation with Temple University, QS Energy provides crude oil composition analysis and viscosity reduction testing to help energy companies determine the upside they could realise from improving the performance of their pipeline infrastructure. Over the past four years QS Energy has tested dozens of 3 - 5 gal. quantities of crude oil from most of the primary oil production regions of the world.

Mr. Bigger stated: "Once these tests results are subjected to hydraulic analysis, we can provide insight into the degree that AOT can reduce the viscosity of their crude oil, and in turn build a return on investment case for our customer. When fully optimised, the AOT system has the potential to improve the efficiency of virtually any pipeline system, providing the opportunity for pipeline operators to reduce operating costs and drive more revenue based on applicable toll rates due to higher flowrates. Here in North America AOT is being evaluated by leading pipeline operators and a recently value engineered AOT system is being prepped for testing later this month on a primary condensate line serving the Eagle Ford Shale."

Bigger added that AOT has been greeted with as much interest by oil producers and transporters overseas as by entities active in North American. Using test data supplied by Temple University, QS Energy's foreign market distributors, Energy Tech Group in Nairobi, Kenya, and Norrønt AS in Oslo, Norway, are quantifying the potential for fixed operating cost reductions and OPEX savings to prospective customers with AOT Preliminary Case Study reports which provide specific recommendations for streamlining operations and increasing pipeline flow.

"We are currently engaged in non-disclosure level discussions with large oil producers and nationalised energy entities in Eastern Europe and West Africa, and are negotiating an AOT deployment in one of the world's largest oil producing regions in the Middle East, as a result of the efforts of the Energy Tech Group," Mr. Bigger said.

"Our Scandinavian partner Norrønt is exploring the undersea applications of the AOT system in conjunction with Statoil ASA under a pending technology grant from the Norwegian Research Council, providing us with an opportunity to penetrate a major new segment of the energy industry.

"We're also seeing renewed interest in China through our distributor Heng He Xing Ye Technology Development Corporation (TDC) and the China Petroleum Pipeline Administration (CPP). Following the installation and testing of variable frequency drive (VFD) systems on pumping stations in the Daqing oilfield where we previously successfully tested our AOT equipment, they have informed both QS Energy and Temple University that they are inquiring about the effectiveness of an AOT system within the Daqing infrastructure."

Edited from source by Stephanie Roker

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