Isles Revival
6 Dec 2013
Many of the process industries are experiencing strong growth, spurring investment in plant upgrades and new facilities. John McKenna looks at the sectors and projects helping to drive UK recovery.
Since the summer it seems as though everywhere you turn there is good news coming out of the process industries.
First came trade body Oil & Gas UK’s report in August that investment in the North Sea is set to hit an all-time high of £13.5 billion this year.
This was followed by the Scotch Whisky Association revealing in September that the value of exports rose by 11% to almost £2bn, while the volume of shipments was up 9% on last year to more than 560 million bottles.
We have had a lot of success in the North Sea on the back of a bubble. It’s the biggest we have had since the late seventies and early eighties
Roy Calder
Finally in October the Chemical Industries Association announced plans to grow the UK chemicals sector - already the UK’s largest manufacturing exporter with a trade surplus of £5 billion – by 50%.
It remained undeterred despite the next day’s announcements of the closure of BASF’s Paisley pigment plant and the, subsequently reversed, closure of the Grangemouth petrochemical complex.
There was also the small matter of the UK’s new nuclear ambitions finally looking as though they may be realised, with EDF Energy and the government agreeing commercial terms on the construction of the £14 billion Hinkley Point C power station.
While there will be a number of major projects such as Hinkley Point C, the North Sea Mariner oil field, and Arla’s superdairy in Aylesbury - all profiled in this article - being built as a result of the growth in many process sectors, the overwhelming majority of investment will come through the upgrading of existing plants, replacing old and inefficient technology with the latest automated solutions.
In the food and drinks sector, major projects such as Arla’s £150 million dairy in Aylesbury are few and far between.
However, despite this, engineering consultants and contractors describe business as being its busiest for many years.
“We have been busier in the last two years,” says Lorien engineering business development manager Ian Cartwright.
“We found the situation going back four years ago was that there were projects out there but clients weren’t committing. Things are getting committed to and implemented now.”
Cartwright says the reasons for this vary from sector to sector: many food companies are investing in new or upgraded facilities thanks to rising revenues as consumers prefer to eat high-quality processed meals rather than going out to restaurants; the Scottish whisky industry is able to invest in improved plants thanks to booming exports to Asia; the brewing industry, meanwhile, is seeing many firms looking to cash in on city-centre real estate and move their brewing to modern out-of-town facilities.
As to what kit food and drinks firms are investing in, Cartwright and his colleague, Lorien engineering process and utilities manager Ian Murkin, say the overwhelming themes are functionality and energy efficiency.
In particular, says Murkin, many firms are investing in anaerobic digestion facilities to turn their waste streams into an energy source and dramatically cut costs.
Cartwright adds that aesthetics are now far less important than functionality when it comes to plant design.
“One example is in brewing, where years ago there was a part of a brewery that was the showpiece area with a high-spec finish for giving tours to the public,” says Cartwright.
“Now there’s a move away from that towards the facility being functional, as that showpiece area is not going to give the firm a return on investment.”
While food and drink contractors may be experiencing a boom in work, investment in new plant and upgrades in the chemicals sector has remained steady and at a relatively healthy over the past few years and throughout the recession.
Indeed, according to the North East Process Industry Cluster (NEPIC), which represents chemical, petrochemical, polymer and pharmaceutical companies concentrated largely in the Tees Valley, over the past 10 years more than £4 billion has been spent on projects in these sectors in the North East alone.
Some of the major projects to have been built include Sabic’s £250 million, low density polyethylene (LDPE) chemical plant at Wilton, Teesside, which opened in 2009 as the largest plant of its kind in the world, capable of producing 400,000 tonnes of LDPE per year.
“That project overnight turned Britain into a polyethylene exporter,” says NEPIC chief executive Stan Higgins.
Another project with global significance is currently under construction in Wilton and due to open next year: Air Products’ £320 million Tees Valley energy from waste plant, which contains the world’s largest gasifier.
Higgins says he expects a further £3-4 billion to be invested in the region’s process plants over the next eight years, with this figure potentially rising to £10 billion should major carbon capture and storage and coal seam gasification projects be approved.
While these figures are substantial, they are dwarfed by the £12 billion - £14 billion per year that is being invested in the North Sea.
The record-breaking level of spending on upgrading existing and exploiting new fields is opening the door to rafts of new technology for the design, build and operation of North Sea fields.
For example, Invensys engineering and simulation principal consultant Roy Calder says there has been a huge increase in the dynamic design of platforms and production facilities, using simulation software to ensure accurate plant design when it comes to areas such as flow rates and pressure levels, and – especially since BP’s Macondo disaster in the Gulf of Mexico – the testing of safety systems.
“We have had a lot of success in the North Sea on the back of a bubble,” says Calder. “It’s the biggest we have had since the late seventies and early eighties.”
Many will be hoping that the North Sea’s resurgence, along with the growth in other process sectors, is anything but a bubble.
The UK’s current government came in to power promising to “rebalance” the economy away from consumer services and back to manufacturing: it will doubtless be hoping that the successes across the process industries are the ones that will kickstart a revival of the nation’s fortunes.
- PROJECT: MARINER FIELD
- COST: £4.6 BILLION
- LOCATION: NORTH SEA
- OWNER: STATOIL OPERATIONAL: 2017
The North Sea’s largest new development for more than a decade, Mariner is a heavy oil field located 150km east of the Shetland Islands. Statoil expects to start production from Mariner in 2017. The average production is estimated at around 55,000 barrels of oil per day over the plateau period from 2017 to 2020. Expected recoverable oil volumes are estimated to be more than 250 million barrels. Topside facilities comprise a production, drilling and quarters (PDQ) platform based on a steel jacket and a floating storage unit (FSU). Below the surface will be up to 100 wells, each with an Electric Submersible Pump (ESP). The £1.2 billion PDQ unit is being built by Daewoo Shipbuilding & Marine Engineering (DSME), which has subcontracted detailed design work to CB&I and Rig Design Services (RDS). Aker Solutions and Norway’s Odfjell have been awarded drilling packages, while Emerson has been hired to supply pressure and temperature measurement equipment, and Subsea 7 hired to deliver 39km of rigid flowlines and flexible riser systems.
- PROJECT: HINKLEY POINT C
- COST: £14 BILLION
- LOCATION: SOMERSET
- OWNER: EDF ENERGY OPERATIONAL: 2023
EDF’s Hinkley Point C looks set to become the first of the UK’s long awaited new generation of nuclear power plants. It will be built on a 176ha site adjacent to the existing Hinkley Point A and B nuclear plants. The project will comprise chiefly of two Areva 1,630MW European Pressurised Reactors, two turbine halls, cooling water infrastructure, and waste and fuel facilities including storage. It will have a total generating capacity of 3.26GW. EDF last month secured investment from two Chinese nuclear firms in exchange for up to 40% equity in the project and agreed a “strike price” with the government that will effectively subsidise the project for its 35-year operational life. EDF is set to make a final investment decision on the project in July 2014, and construction is expected to start in 2015. The first of the reactors is expected to come online in 2023. Contracts already awarded for the construction of the project include a joint venture of Bouygues and Laing O’Rourke for the main civil engineering package, Costain for marine work, Alstom for the turbines and Areva for instrumentation and control, nuclear steam supply system and fuel. Some early earthworks preparing the site have already taken place.
- PROJECT: DRAX BIOMASS CONVERSION
- COST: £700 MILLION
- LOCATION: NORTH YORKSHIRE
- OWNER: DRAX OPERATIONAL: 2013-2016
The UK’s largest coal-fired power station is in the process of converting three of its six 645MW coal-fired units into biomass-burning facilities. The first unit began operating in April this year and has so far reached a power output of 585MW. The unit is expected to reach a total capacity of 600MW once the current process of building new delivery, storage and distribution systems for the biomass feedstock is completed at the end of this year. EPC contractor Shepherd Engineering Services has hired Capula to deliver the control and automation systems for both the biomass storage domes and the biomass boiler distribution system. Capula intends to use Schneider products for both control systems. Work also continues on the conversion of Drax’s second 600MW biomass unit, which is due to be operational in the second quarter of 2014. The third unit is scheduled for operation in 2016. The firm’s capital expenditure on the three units is expected to be in the range £650 million to £700 million, of which around a half will be for on site infrastructure and boiler modifications, and the remainder on upstream US investments in two pellet plants and a port facility, and technology to ensure Drax Power Station is fully compliant with the Industrial Emissions Directive.
- PROJECT: AYLESBURY DAIRY
- COST: £150 MILLION
- LOCATION: BUCKINGHAMSHIRE
- OWNER: ARLA OPERATIONAL: 2013
The world’s largest fresh milk dairy has been under construction in the Buckinghamshire countryside near Aylesbury since early 2012. Scheduled to begin operating by the end of this year, the Arla Foods dairy will process and package up to one billion litres of milk a year. The project includes its own combined heat and power (CHP) plant, with Arla aiming to be the first zero-carbon dairy. Caddick Construction is the main contractor for civil engineering works, while NG Bailey will be responsible for the mechanical and electrical engineering portion of the contract. In addition to being responsible for the installation of boilers, air compressors, ventilation and lighting, NG Bailey will also be responsible for wastewater and effluent treatment and recycling. It is understood the plant’s automation solution will include Wonderware software and Siemens programmable logic controller (PLCs).
- PROJECT: TEES VALLEY RENEWABLE ENERGY PROJECT
- COST: £320 MILLION
- LOCATION: TEESIDE
- OWNER: AIR PRODUCTS OPERATIONAL: 2014
Industrial gas firm Air Products is building a 49MW energy from waste (EfW) facility in Billingham, Teesside. The facility, which every year will take up to 350,000 tonnes of non-recyclable waste, will use advanced oxygen assisted plasma gasification technology to generate electricity that will supply the local chemical and petrochemical industry. At the facility’s heart is a Westinghouse plasma gasifier – the world’s largest gasifier - which will process a wide range of waste materials as a feedstock and create a commodity-grade clean syngas. The materials will move downward in the gasifier and be heated by plasma torches to temperatures in excess of 1,200 degrees celsius, producing a synthetic gas comprising mainly of carbon monoxide and hydrogren that is partially quenched as it exits the top of the vessel. This syngas will then drive gas turbines to generate the electricity. Once operational next year it will be the largest EfW facility in the country using this advanced gasification technique. Local contractor Tolent Construction is responsible for the main civil engineering package, while Canadian firm AlterNRG is supply the gasification technology. Meanwhile, Air Products has received planning permission to build a second identical plant - Tees Valley 2 - on adjacent land.
