Jessica Assunto | 5 months ago
Articles

Sustainable Savings with Surplus Materials


Leaders in oil and gas are constantly restructuring to reduce cost, waste, and environmental impact. In our current economic climate, more companies are reaping the benefits of selling and purchasing surplus equipment. With material available at our fingertips through platforms like PipeSearch, companies no longer have to wait for new equipment to fulfill their needs or to recoup some costs from excess inventory.


Cost-Efficient Buying

Cost is the most common reason and the most appealing reason to purchase unused surplus equipment over new. As soon as brand-new equipment is purchased, its value depreciates at an exponential rate. Buying unused, surplus equipment costs less and avoids the significant value depreciation of new materials while still providing a quality product. Benefits such as shorter lead times for much-needed material prevent cost and risk of project delays.

Example: PETRONAS took on a bold strategy to overcome the issue by channeling efforts on producing a robust OCTG standardization program as well as enhancing reutilization based on available surplus. These initiatives aim to take materials management to a higher level of efficiency and cost savings. (1)

Cost-Efficient Selling

Safety stock and contingency strings are often required to protect projects and timelines from unanticipated events. Well designs change, projects are canceled, objectives shift, and these scenarios all result in surplus goods that can heavily impact performance and profitability. Few companies are aware of the real cost of owning idle assets. This unused material depreciates while accruing unnecessary storage costs and ties up capital in stock that is just taking up space. Selling unused stock can recoup costs and increase budgets that can be used toward company growth. It also perpetuates a cycle of reducing waste and reusing resources.

PipeSearch uses data to estimate the value of your cra OCTG assets delivering multiple options based on a function of time in a customized PipeStats report. This data allows OCTG owners to choose the best avenue for recouping value on their surplus.


Environmental Benefits

While the sale or purchase of surplus tubular goods has cost benefits, the oil and gas industry is at a turning point that demands conscious and careful decisions about the environment. The industry is aiming to be environmentally friendly. Surplus pipe is often discarded as scrap while the manufacturing of new equipment involves processes that can lead to harmful effects on the environment. Using surplus materials, or selling unused goods makes it possible for companies to reduce waste and lessen negative environmental impacts. It will also increase opportunities for growth and diversification while providing society-wide benefits.


Time-Saving

Unexpected delays are always problematic for production schedules and budgets. It is essential to have equipment and supplies available on your project timelines. E-procurement enables buyers to quickly determine pipe availability and delivery. Time is a major factor in reducing losses and preventing delays in demanding project schedules. Waiting for new equipment can take months and incur significant losses as shown below. When purchasing unused surplus tubular goods from platforms like PipeSearchTM, the bulk of the work is already done and completed within days.
GE states on the cost of project delays and downtime: The industry has grappled with quantifying the cost of unplanned downtime, but the Kimberlite study revealed that just 1% of unplanned downtime—or 3.65 downtime days per year—can cost organizations $5.037 million each year. Averaging just over 27 days of downtime each year, offshore oil and gas organizations experience $38 million in financial impacts from unplanned downtime. For the worst performers the costs can be upwards of $88 million. (2)

PipeSearch

PipeSearch is proud to play a part in reallocating and repurposing superior tubular products while helping clients benefit from economic savings. PipeSearch helps end-users and owners gain the best return on their cra OCTG investment through the PipeRecover process. Our process identifies and explores the most significant places of opportunity, engages technical experts, and creates credibility in the product quality. This increases the likelihood the material aligns with current projects and maximizes its worth.

PipeSearch helps operators identify opportunities for cost savings that can be leveraged across future projects and operations. Through PipeFacts, our quality assurance program, it helps sellers increase their asset value, and gives buyers confidence in the material’s quality. Our commitment to quality and reliability is what separates us from the competition.

We can identify, and compare opportunities to optimize supplies and efficiency and expedite transactions. This results in faster, more flexible, and more sustainable processes. It is the right application with the right technology that can take a company’s performance to an entirely new level. Innovation brings improved efficiency, which results in more profit. We are a tool that will drive value creation. Please click here to view our full product guide.


References:
1. Ong, Gary S. H., Abdullah, Malik Faisal, Razak, M. Zahin A., Ghani, Athiyatul Shakirah Abdul, Bong, David, Thanaraju, Andrew, and Jun Leon Low. "OCTG Standardization and Surplus Reutilization Bring Cost Reduction Efforts to Fruition." Paper presented at the Offshore Technology Conference Asia, Kuala Lumpur, Malaysia, March 2018. doi: https://doi.org/10.4043/28576-MS





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PipeFacts by PipeSearch is a multi-stage process that utilizes proprietary software to manage a sequence of QA/QC steps in the evaluation of OCTG. It is designed to bring transparency, integrity, and consistency to the evaluation of tubulars no matter the location of the pipe.
PipeFacts goes beyond standard physical inspections of material. It evaluates the specification of the original MTRs against API 5CRA or 5CT, identifies any exceptions, and sets a standard by which MTRs are reviewed and by which inspections are performed. Our PipeFacts process has been developed to give customers complete confidence in the product they are receiving.

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