Tag: tank terminals

Saudi Aramco, the world’s top oil firm and single biggest crude exporter, is in discussions to invest in two planned refineries in India, sources in India told Reuters on Thursday.

State-owned Indian refiners plan to build several new crude processing plants to meet soaring fuel and petrochemicals demand in the world’s third-largest crude oil importer.

Saudi Arabia, for its part, looks to lock in future term sales for its crude in the top Asian markets, which are set to continue driving global demand growth in the coming years. India has even surpassed China as the single biggest driver of demand growth.

Aramco already has several deals with Chinese refiners and petrochemical producers as the Saudi oil giant has been pursuing deals in recent years to expand its international downstream presence, especially in demand centers such as Asia.

Now Saudi Aramco has set its sights on investment in the new Indian refineries expected to be built. The Saudi oil giant is offering to supply crude volumes equivalent to three times its future stake in each project, according to Reuters’ sources.

Saudi Aramco is discussing buying a stake in Bharat Petroleum Corporation Ltd (BPCL)’s $11 billion new refining and petrochemical complex in south India, and is in separate talks with Oil and Natural Gas Corporation Limited (ONGC) for a proposed refinery in the Gujarat state on India’s west coast, the sources told Reuters.

However, Indian refiners are continuously looking for cheaper crude and diversified supply, and the Saudi proposal to supply a large part of the oil for the new refineries may not work.

BPCL’s refinery project is at a more advanced stage and the state-owned refiner has already launched some preliminary work on the project, including land purchase.

For years Saudi Aramco has been trying to tap downstream opportunities in India. The oil giant has tried – and failed – to reach a deal with private refiner Reliance Industries.

By Charles Kennedy, oilprice.com – Mar 27, 2025.

Repair of storage tanks can be a major expense for oil, gas and petrochemical facilities.

Corrosion can lead to leaks, environmental damage and even the shutdown of operations, costing millions of dollars a day. Identifying products and processes that reduce downtime for repairs and extend the time between repairs is critical.

Industry standards and recommended practices highlight biggest challenges

API Recommended Practice 652 provides guidance on achieving effective corrosion control in above-ground storage tanks by application of tank bottom linings. Tank bottom linings are the key to preventing internal corrosion of steel tank bottoms because when stored, oil and water separate due to gravity. Water falls to the bottom due to its heavier weight and then acts as a corrosive because of its electrolytic properties. To minimize this corrosion and the downtime it can cause, industry has focused on improvements in tank bottom lining materials, surface preparation, lining application and cure speeds.

Lining innovation driven by storage tank design

Storage tanks come in a variety of sizes, with diameters sometimes exceeding 250 feet. As tanks have gotten bigger with increasing demand for storage and processing, the properties of the floor linings — and their ability to perform under greater commodity loads — have become critical.

The design of storage tank bottoms presents special challenges to linings. Tank floors are typically lap plate construction, consisting of a set of steel plates joined together using lap welds. Linings must be able to adhere and provide adequate edge retention at these weld joints. Floating roof tanks, which feature support legs and welded-in-place contact striker plates on the tank floor, also offer tests which the lining must address.

Finally, effective linings must take account of the way repairs are made to storage tank bottoms. When tank floors are compromised, plate steel is usually scabbed over holes or other severely pitted surfaces, creating an irregular surface.

To handle all these challenges, lining manufacturers have focused on 100% solids, high-build solutions with greater film thickness, excellent flexural modulus and elongation characteristics, and edge retention properties. Some are strengthened with ceramic beads, glass flakes or milled fiber reinforcements to provide even greater durability and resilience.

There are several variables that owners should consider when choosing a Maintenance, Repair and Operations lining for their storage tanks.

Ease and speed of use: The ability to spray at high temperature and pressure and achieve high film build quickly is critical to fast turnaround times. This is the key benefit of newer 100% solids solutions, which leverage plural component spray systems to reduce time and labor costs, versus solvent-based, multi-coat systems. These 100% solids systems have also shown to last up to two times longer.

Geographical location and time of year: Solutions that work well for tanks in Calgary may not be optimal for those located in Texas. A low-temperature-cure solution, for example, is probably not the best for repairs done in high heat.

Stored temperature of the commodity: The temperature of the commodity being introduced into the tank will also impact the appropriate lining solution. If the commodity needs to be heated, it may cause thermal shock to a tank in a cold location, necessitating a specific kind of lining that can resist thermal shock and elevated temperatures.

Purity of the commodity: Another factor is the type of commodity being stored, such as traditional unleaded vs. ethanol-based gas, or commodities with colorants added. Additives can attack linings in various ways causing them to leach into and contaminate the commodity.

One system for both pinhole and major repairs: Most contractors doing storage tank maintenance will do a spark or holiday test to check for pinholes or voids at the same time they are checking for more significant repairs. Having a lining system that can be applied in both a hot pot/single leg, brush and roll process as well as via a plural component spray system will make the contractor’s job easier and quicker.

Many coatings manufacturers offer a range of 100% solids, high-build systems for tank bottom repair. What differentiates them is their level of knowledge and experience with specific commodities and locations. Field service capabilities and a network of trained contractors also play a critical role in ensuring tank maintenance goes as smoothly as possible.

With the critical nature of petroleum tank linings, owners often desire to see test results for the specified internal linings in an autoclave at specific temperatures, pressures and commodities for added piece of mind.

By:  Kevin Morris, Bicmagazine / 02 April 2025

While oil and gas companies have voiced support and even enthusiasm for the administration’s “drill baby drill” policies, survey data and anonymous comments from oil and gas companies released last Thursday from the Dallas Fed’s energy survey for the first quarter reflects a different perspective.

Uncertainty rises to the fore

A major theme in survey respondents’ comments was uncertainty created by the administration’s policies, specifically around tariff-induced price increases, the price of oil and the economic and financial climate. Lower oil prices, nearing if not below breakeven points, also threaten oil companies’ willingness to drill new wells. If the administration succeeds in its goal of $50-60 per barrel oil, the result may be less oil drilling, not more.

Business leaders mentioned “uncertainty” more in the latest survey than in the last five years, sharing comments including the following:

“I have never felt more uncertainty about our business in my entire 40-plus-year career.”

“The key word to describe 2025 so far is ‘uncertainty’ and as a public company, our investors hate uncertainty.”

“Uncertainty around everything has sharply risen during the past quarter. Planning for new development is extremely difficult right now due to the uncertainty around steel-based products. Oil prices feel incredibly unstable, and it’s hard to gauge whether prices will be in the $50s per barrel or $70s per barrel. Combined, our ability to plan operations for any meaningful amount of time in the future has been severely diminished.”

“The only certainty right now is uncertainty. With that in mind, we are approaching this economic cycle with heightened capital discipline and a focus on long-term resilience.”

Higher costs

Oil and gas companies are facing increasing costs, and an administration oil price target of $50-60 per barrel would squeeze the industry’s margin and free cash flow. Tariffs, especially those on steel, are driving up costs across the energy value chain, from drilling to pipelines to refineries and more. Companies focused on natural gas have the benefit of a sunnier outlook for prices that provides more room to recover those costs.

U.S. Interior Secretary Doug Burgum said during the 2025 CERAWeek conference in Houston that he expects savings from deregulation of $6 to $8 per barrel, outweighing tariff-related cost increases. However, 49% of survey respondents estimated their total cost of regulatory compliance ranged between $0 to $1.99 per barrel, and only 9% of respondents estimated their regulatory costs at $6 or more per barrel.

Risk of lowering production

The administration has a goal to increase U.S. oil production by 3 million barrels per day, a 22% increase from recent levels of approximately 13.5 million barrels per day, but the threat of lower oil prices puts this at risk.

In the Dallas Fed energy survey and in the Kansas City Fed energy survey released in January, respondents said the breakeven cost for profitably drilling new wells averaged between $60-64 per barrel. If oil reaches $60, the U.S. risks oil companies delaying plans for new drilling. The risk of slowed drilling and even curtailed production increases further if prices get closer to $50.

Takeaways

Uncertainty around policies and rates of return raises the risk of delayed investment decisions, while unfavorable economics may shelve new projects entirely until conditions improve. Long development timelines for energy infrastructure means that delayed decisions today can have a ripple effect for years to come.

Policymakers must keep in mind that in the U.S., the price of oil is king in determining oil production volumes. The goals of lower oil prices and higher production do not align, and higher costs and uncertainty further complicate the picture.

In the meantime, oil companies must continue their focus on capital discipline and improving operational efficiency. We have seen this already as they streamline assets and business units, as well as look for opportunities to innovate with new technologies that drive further efficiency in production and business operations. Through these, the industry will continue driving costs down and open new opportunities for the next decade of production.

By David Carter, RealEconomy / 01, April , 2025.

Flow rates through valves are measured by their flow coefficient, referred to as “C_v”. The C_v for the same size gate and globe valve will be vastly different since the gate valve offers little flow resistance while in the open positions.

The globe valve closure mechanism, called a disc or plug, can be machined to many different shapes. By changing the shape of the disc, the rate of flow through the valve as it is opened can be varied greatly in proportion to the number of turns of the stem. The more common or “conventional” curved type disc design is used for most services as it opens more for a given movement (rotation) of the stem than other designs. The V-port disc design is used for fine throttling through a wide range of opening percentages and is adaptable to all size globe valves. The needle disc design is used for very-fine flow regulation but is usually only available in smaller sizes. When absolute shutoff is required, a soft-seating elastomer insert can be installed in either the disc or the seat.

GLOBE VALVE TRIM

In globe valves, the parts that provide the actual component-to-component closure are called trim. The components that make up the trim in a globe are the seat, disc, stem, backseat and sometimes the hardware that connects the stem to the disc. Correct trim design and materials selection are critical for correct operation and longevity of any valve, especially globe valves due to their high fluid friction and convoluted flow path. As the seat and disc move closer together, the velocity and turbulence across them increase. This elevated velocity combined with the corrosiveness of the fluid can cause the trim to be damaged, resulting in a valve that leaks badly in the closed position. Sometimes the defect is what looks like a thin slice in either the seat or disc, which is called wiredrawing. This initial small leak path can widen and become a major leak if not repaired promptly.

On smaller bronze globe valves, the trim is usually the same material as the valve body, or in some cases a similar bronze alloy with greater strength. On iron globe valves, the most common trim material is bronze. The designation for this trim on iron valves is “IBBM,” which stands for “iron body, bronze mounted.” Steel valves are offered in a variety of trim materials, with usually one or more of the trim components being a 400-series martensitic stainless steel. Hard facings such as Stellite are also used, as well as 300-series stainless steels and copper-nickel alloys, such as Monel.

Globe valves are available in three basic patterns. The most common is the “T” pattern, where the stem is perpendicular to the pipeline flow. The angle pattern is similar to the T pattern, but the flow is turned 90 degrees in the valve to allow the angle valve to serve as both a flow control device and 90 ^degrees piping elbow. The angle pattern globe valve is still commonly used on the top of boilers and is also the pattern used for the final output regulating valve on oil and gas “Christmas trees.”

The third design is the “Y” pattern design, developed to reduce the turbulence that takes place in the body of a globe valve as well as provide a more rigid design for on/off applications. In this type of globe, the bonnet, stem and disc are slanted at a 30-45 degree angle, resulting in a straighter flow path and less fluid friction. This reduced friction also means potentially less erosive damage to the valve, as well as better overall flow characteristics for the piping system.

BONNET DESIGNS VARY BY APPLICATION

Globe valves come in a variety of bonnet designs, and each has its place and purpose. For small bronze valves, the inside-screw-rising-stem design is the most popular. In this design, the stem threads are contained within the pressure/fluid envelope of the valve bonnet. This design is easy to manufacture, but it does have one drawback — the threads are exposed to the process fluid. This means that the critical stem threads could be damaged if exposed to corrosive liquid or gas. Normally, this type of valve is used for water or low-pressure steam so that is not an issue.

Bonnet designs where the stem threads are outside of the pressure/fluid envelope are much preferred on valves larger than NPS 2, or when a valve is in corrosive service. The most common of these designs is called the outside screw and yoke, also known as OS&Y. It is the primary design for larger industrial globe valves.

The body/bonnet connection on globe valves comes in various configurations. Both threaded connections and union bonnets are found on the smaller bronze valves, while the bolted bonnet is found on most steel and iron globe valves. The pressure seal bonnet is used on high-pressure, high-temperature globe valves, such as the Y-pattern design.

STOP-CHECK VALVES

Globe valves and boilers have literally and figuratively been connected for over 150 years. The first valve on any boiler output line is quite often a stop-check valve, also known as a non-return or boiler stop valve. The stop-check is actually two valves in one: a globe valve for regulating flow, and a check valve for preventing backflow. To make the non-return function occur, the disc on a stop-check is not attached to the stem but is guided in the valve bonnet and allowed to freely move up and down when the stem is raised. This allows the flow rate to be regulated, but when backflow occurs, the disconnected disc functions as a piston check valve and quickly closes, preventing reverse flow into the boiler. If tighter shutoff is required, the stop-check stem may be lowered by closing the stem, preventing movement of the disc to the fully open position. In addition to regulating boiler output, the stop-check valve is also used for other applications where combining a check valve and globe valve makes sense for the piping designer.

LARGE OD GLOBE VALVE ISSUES

Due to some testing requirements, large globe valves can present challenges during the seat-test phase of hydrostatic testing. The problem occurs when globe valve bonnets flex because of the hydrostatic test pressure being transferred from the area under the disc, to the stem, yoke and then to the bonnet. While globe valves are designed to be operated primarily in the partially open position to regulate flow, they are nonetheless required to pass a stringent 110% of rated-working-pressure hydrostatic seat test in some testing standards.

The problem is a lack of stiffness in the bonnets of these low-pressure, large globe valves. For the most part, wall thickness requirements come from the American National Standards Institute (ANSI) B16.34, “Valves- Flanged. Threaded, and Welding End,” but that is often not enough section thickness to keep bonnet flexing from occurring. Most of these basic globe valve designs and patterns were created back when the required American Petroleum Institute (API) 598, “Valve Inspection and Test” seat test for globe valves was only 90 psi air. Prior to the sixth edition of API 598, “Valve Testing and Inspection,” published in 1990, when the 90-psi air low pressure test was the required test procedure for globe valve seat testing, the problem did not exist.

On large, low-pressure-class valves this can cause the disc to lift away from the seat a few thousandths of an inch as the pressure is increased, thus causing leakage. The easy solution is to add more thrust on the stem (tighten it) as it rises. This usually solves the problem, however, the initial closure torque is often exceeded during this operation. Due to flexibility in the valve bonnet, large diameter, handwheel-operated globe valves may require secondary re-torquing when used in on/off service. This re-torquing may also be required during hydrostatic testing.

To counter the problem without adding extra thickness or ribbing to the bonnet, many manufacturers will provide hammer-blow handwheels, manual bevel-gear operators or powered actuators as standard on these larger valves. The use of these methods usually works well but does mask the actual degree of force applied to close the valve.

API GLOBE VALVE STANDARD — API 623

API has created a relatively new globe valve standard, API 623, “Steel Globe Valves — Flanged and Butt-welding Ends, Bolted Bonnets,” which requires wall thicknesses greater than ANSI B16.34 and similar to those in API 600. The additional thickness requirement is designed to address potential corrosion and erosion issues that often occur in petrochemical and refining applications, but this added thickness also helps to address the bonnet flexibility issues that can occur during hydrostatic testing and high-pressure closure applications.

Another point that is addressed in the 623 document is the need for stronger stems to provide tight sealing when certain corrosion-resistant alloys are used for stem construction. Many austenitic stainless-steel materials such as 316 stainless steel are chosen for stems in highly corrosive fluid applications. However, these materials are sometimes significantly weaker than the 410 stainless steel stems usually specified as standard. This requirement resulted in the stem diameters in the document being appreciably larger than non-API 623 globe valve stems.

While the tried-and-true globe valve is still being manufactured in huge quantities all over the world, newer quarter-turn designs such as the butterfly and ball valve have taken much of the previous market share. However, there are still many applications where the globe valve outshines other designs, so the future is still bright for these long-time favorites of the flow control industry.

By: Greg Johnson, Valvemagazine / 10/3/2022

Last year, British multinational oil & gas giant, Shell Plc (NYSE:SHEL) threatened to delist from the London Stock Exchange (LSE) and list on the New York Stock Exchange (NYSE). Shell CEO Wael Sawan  told Bloomberg that the company is grossly undervalued in London due to shareholder apathy to the oil and gas sector. Sawan also expressed deep frustration by investors’ under-appreciation of the financial performance of the company, as well as the British government’s over-taxation of its profits. Sawan vowed to “look at all options”, including switching the group’s listing to New York in a bid to close the valuation gap with American Big Oil companies Exxon Mobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX). A U.S. listing might make even more sense now that Trump is in office thanks to his pro-fossil fuel policies.

The UK government, however, will be wishing for Shell to stay put as it looks up to Europe’s biggest oil and gas company to save the British crown jewel, BP Plc (NYSE:BP). Shell moved its headquarters from Hague to London in 2022 as part of a broader corporate restructuring, including simplifying its share structure, dropping “Royal Dutch” from its name, and shifting its tax residence to the UK. Over the past couple of years, rumours have swirled in the industry that BP might be open to a merger, with its shares struggling after CEO Murray Auchincloss’ fossil fuel-focused strategy reset failed to win over markets. U.S. activist investor Elliott Management has acquired a 5% stake in BP, and is using his fire power to push for changes including cost cuts and potential changes in leadership.

There are several reasons why such a merger would make sense. For starters, Shell has the wherewithal to pull off such a deal, thanks to its $218B market cap compared with BP’s $92B. Further, despite its recent struggles, BP has an impressive oil and gas portfolio, including onshore shale basins  in the U.S. and the Gulf of Mexico, Brazil, the North Sea and the Middle East. BP produced 2.36 million barrels of oil equivalent per day last year, generating $8.9 billion in net profit. 

BP also owns one of the biggest and most successful oil trading desks in the world. 

Whereas several U.S. oil companies have tried their hand at oil trading, it’s European oil and gas supermajors that have perfected the art and science of leveraging volatile oil markets to reap big profits. To wit, Exxon Mobil (NYSE: XOM) famously ditched its effort to build an energy trading business to compete with those of European oil majors after a period of low oil prices forced the company to heavily cut the unit’s funding amid  broader spending cuts. BP, on the other hand, has managed to build one of the most successful energy trading ventures by an oil and gas major. BP’s trading desk has been astute at taking advantage of highly volatile energy markets in the past, with former CEO Bob Dudley and his army of 3,000 traders displaying an uncanny ability to predict the oil price trajectory. For instance, Dudley famously told the media that “Prices will remain low for longer,” after oil prices plunged to their lowest in more than a decade in 2016. Indeed, Dudley authorized a daring trade that saw BP place a large bet on a rebound in oil prices. BP was already heavily exposed to (low) oil prices, yet it chose to double down in a bid to increase the exposure by buying futures contracts much as a hedge fund would. A former BP executive with direct knowledge of the trade told Bloomberg that BP “made a lot of money” from that bet.

The UK government would certainly favor a Shell takeover of BP, being loath to lose its ability to leverage the company to wield soft power by letting the company  be snapped up by a foreign rival, including Middle Eastern oil giants. Last year, Iraqi oil ministry officials revealed that BP will develop Iraq’s Kirkuk oil and gas fields based on a profit-sharing model. The oil ministry and BP are expected to sign a confidentiality agreement in the current week, after which Iraq will hand over the data package for Kirkuk’s four fields and installations. According to the officials, Kirkuk oil fields are currently producing 245,000 barrels of crude per day. Iraq is OPEC’s second largest producer after Saudi Arabia.  Iraq’s economy relies heavily on crude oil exports, with crude accounting for more than 90 percent of the country’s revenues.

That said, it would be interesting to see if Shell would be interested in buying its British peer. A big challenge for a potential tie-up would be the fact that it does not necessarily align with the ethos of Shell CEO Wael Sawan, who is focused on cutting costs and narrowing the business’s focus to liquefied natural gas (LNG). On the other hand, Shell is one of the oil majors trying to expand their trading desks, and buying BP would be a slam dunk in that regard.

By Alex Kimani for Oilprice.com– Mar 24, 2025

As 2025 unfolds, energy companies and their supply chains continue to navigate an era of profound transformation. Political and regulatory shifts, evolving energy policies, new trade tariffs and the growing influence of artificial intelligence all contribute in driving an increased demand for energy and reshaping all aspects of the work experience. Emerging risks in key sourcing and production regions are adding further pressure on energy businesses. At the same time, previous commitments made on issues like sustainability, net-zero goals and fair labor practices are increasingly threatened by these political and economic realities. Yet, consumer and investor expectations remain unwavering, demanding that energy companies both meet the growing supply demand and maintain their social and environmental practices. Here are five key trends that will further define supply chain sustainability in the energy sector for the remainder of the year.

1) A Growing Gap Between Ambitions and Performance

In recent years, businesses and governments have set ambitious sustainability targets, leading to heightened scrutiny, regulatory enforcement and evolving stakeholder expectations. Despite these commitments, investigative reports continue to uncover malpractice, revealing a disconnect between ambition and action.

One of the biggest challenges businesses face is translating sustainability goals into tangible outcomes that align with core business goals. This can be due to the growing complexity of varying international regulations or limited supplier visibility e.g. in both fossil fuels and solar supply chains. The result? Confusion, compliance delays and, in some cases, companies scaling back sustainability targets under economic and political pressures.

Compounding this issue is a flood of supply chain data. While businesses now have access to more information than ever before, many lack the tools or expertise to derive meaningful insights, leading to decision paralysis.

To bridge this gap, energy businesses must prioritize proactive risk management, build stronger supplier relationships, more accountability with intermediaries and improve data and risk analysis capabilities to drive meaningful change.

2) Labor Risks in Unexpected Markets

If 2024 taught us anything, it’s that labor risks aren’t confined to traditionally high-risk markets. Health and safety risks are well known to the energy sector. But issues such as forced labor, child labor and wage exploitation can also persist across all manufacturing regions — including those previously considered low risk. In energy supply chains, this includes in coal mining, minerals supply chains (e.g. cobalt, lithium or uranium mining) as well as during the installation, construction and decommissioning processes.

According to LRQA’s 2024 Supply Chain Risk Outlook report, which analyzed data from over 25,000 global audits, more than half of assessed regions are classified as high or extreme risk for sustainability violations. Countries including Australia, South Africa, Saudi Arabia, the United Arab Emirates and the US — key energy sourcing regions — have moved into higher risk categories, reinforcing the need for constant vigilance.

Traditional annual audits are no longer sufficient in such a dynamic landscape. They provide only a snapshot in time, failing to capture more complex, systemic issues such as inadequate grievance mechanisms and unfair wages. To address this, businesses must invest in real-time risk monitoring and grievance systems to uncover hidden risks before they escalate.

Companies that proactively identify and address these risks will build stronger, more resilient and responsible supply chains.

3) US Policy Changes Introduce New Hurdles

Shifts in political leadership and trade policies are reshaping the risk landscape for global supply chains. In the US, the second administration of President Donald Trump has already begun introducing stricter immigration policies, continued anti-ESG rhetoric and a raft of tariffs on international trade. This complicates the operating environment for businesses.

In response, many manufacturers (including for components, equipment and raw materials) are likely to re-evaluate their sourcing strategies. While some may opt for reshoring, others will pivot to less well-regulated emerging markets, increasing the risk of labor rights violations and supply chain transparency challenges.

Domestically in the US, restrictive immigration policies could further impact foreign migrant workers, potentially driving an increase in informal employment and worker exploitation. To mitigate these risks, businesses must focus on responsible recruitment practices, robust grievance mechanisms and stronger supplier partnerships.

Despite these political headwinds, global momentum for supply chain sustainability remains strong; even with the advent of the EU Omnibus movement and US federal policies. The EU’s Corporate Sustainability Reporting Directive continues to drive investor demand for responsible sourcing, while state-level US policies, such as California’s Climate Corporate Data Accountability Act, are mandating emissions disclosures.

4) A Ripple Effect of Regulation

By late 2024, supply chain due diligence laws were expanding beyond traditional concerns such as forced labor and emissions, encompassing issues like biodiversity and deforestation. This has immediate implications for the energy supply chain, much of which is still associated with mining activities and subject to national land-use policies.

The European Union Deforestation Regulation now requires businesses to assess their supply chain environmental impacts, pushing sustainability professionals to adopt a more integrated approach that considers biodiversity preservation.

However, limited data in this area presents challenges. The 2023 Nature Benchmark report revealed that many companies still fail to recognize the interconnectedness of business operations, environmental impact and human rights concerns.

These evolving regulations don’t just affect multinational corporations. They have a trickle-down effect on small-to-medium enterprises (SMEs) as larger brands impose stricter compliance requirements.

Although SMEs may not be directly subject to legislation such as the Corporate Sustainability Due Diligence Directive, they must increasingly align with higher transparency and risk management standards to remain competitive as suppliers.

For SMEs, embracing ESG improvements is no longer optional. It’s a pathway to securing contracts with larger organizations seeking to reduce supply chain risks.

5) High Quality Data Informs Deeper Engagement

High-quality data is the cornerstone of responsible sourcing and effective supply chain management. Yet, many businesses still struggle with fragmented or unreliable data, making it difficult to monitor risks, detect violations and ensure ethical practices.

To drive operational efficiency and sustainable decision-making, companies must invest in robust risk indicators, which help track performance, identify weak points and benchmark progress against industry standards. This includes deep knowledge of geographic risks, product risks, supply chain structure, adverse media insight and how these can be used to inform a risk-based program design and supplier engagement.

Over recent years, many brands and retailers have adopted more transactional supplier relationships, prioritizing cost efficiency and speed over long-term partnerships. This has weakened supplier bargaining power, created relentless pressure to cut costs and, in some cases, compromised quality and sustainability.

However, short-term savings come at the expense of long-term resilience. The most successful brands will be those that invest in supplier collaboration — aligning on shared goals, optimizing logistics and responding quickly to market changes. This is especially relevant for energy supply chains where demand will continue to grow, and resilience is a critical part of both the national and economic agenda.

The Year Ahead: An Opportunity for Action

Sustainability-focused businesses remain attractive to investors. A Deloitte study found that 83% of investors incorporate sustainability data into their financial analyses, while KPMG reports that 74% of investors say ESG considerations influence their deal strategy — often leading them to pay a premium for companies with mature sustainability programs.

This shift is driving businesses to enhance supply chain due diligence and integrate sustainability into their long-term strategies.

Even if regulations are diluted or delayed, supply chain due diligence is expected by consumers, investors and stakeholders. Compliance fundamentally supports business success, resilience and reputation. While shifting regulations and political instability may disrupt traditional models, energy businesses now have access to more data, technology and best practices than ever before.

To navigate these complexities, energy supply chain leaders must focus on data quality, supplier collaboration and proactive risk management — embedding sustainability not just as a compliance exercise but as a core business strategy.

Kevin Franklin is the chief product officer for leading global assurance partner LRQA. The views expressed in this article are those of the author.

By: Kevin Franklin, Energyintel / Mar 24, 2025.

Companies in the valve and control products industry are responding to a confluence of forces that are changing the landscape of manufacturing — automation, agility and digitalization to name a few.

Kevin Tinsley shares a commonly held fear in the manufacturing industry. “My nightmare is getting the phone call that somebody got hurt in our facility,” said Tinsley, senior vice president of Nele Global Operations. The company recently mitigated some of the risk by combining artificial intelligence (AI) and robotics to perform high-pressure testing of its valves. 

“High-pressure testing of valves can be dangerous if there is a casting or design failure,” said Tinsley. “We utilize robots equipped with cameras, as well as sniffing devices, to detect valve leakages. They can be programmed to perform this task effectively and—most importantly—safely.”

Neles partnered with an outside expert to design and build an explosion-proof enclosure, then purchased an OMRON Collaborative Robot and developed a sniffing program with the industrial automation company for high-pressure testing, such as helium tests. “It’s a great advancement in technology,” said Tinsley.

New technologies, such as robotics, are changing the face of manufacturing. In a survey of small and medium-sized manufacturers released in February by The Manufacturing Institute and BKD, more than 77% of respondents indicated they were making technological investments to achieve cost efficiencies in the production process, with 73.4% doing so to improve operational performance. And increasing automation is just one of a wide array of trends shaping the future of manufacturing.

FORCES OF CHANGE

“I see several forces driving changes in manufacturing,” said Tony Scacchitti, operations manager for AUMA Actuators Inc. “One obvious one is advance- ments in technology, but another is customer expectations. People want things more quickly, and they have quality and cost expectations. From year-to-year, those three expectations vary depending on the market. But they drive change.”

Another factor that affects manufacturing is the role of federal, state and local government. “Government intervention is forcing more sourcing of local content to meet new regulations and avoid costly tariffs,” said Tinsley. “Countries are looking to create manufacturing jobs and driving legislation to block pure imports.”

Manufacturing jobs—and finding qualified people to fill them—are also at the forefront of conversations about the industry’s future. “The demographics of our workforce are contributing to change,” said Bill Metz, vice president of operations and engineering for Richards Industrials. “We have a lot of people looking at retirement in the next four to 10 years and not enough young people coming into the business.”

Workforce challenges, technological advancements, customer demands, the regulatory landscape and more are leading manufacturers in the valve and control products industry to adapt. In this article, we’ll take a closer look at movements in three main areas: agile manufacturing, automation and digitalization.

A QUEST FOR AGILITY

Manufacturers are increasingly embracing agile manufacturing to enhance their operations. Encompassing a broad range of strategies and tools, agile manufacturing is a methodology that stresses the importance of responding quickly to customer needs and unexpected changes in the marketplace. Agility is becoming a hallmark of successful manufacturing facilities and will continue to do so in the future.

When Scacchitti joined AUMA Actuators nearly a decade ago, the standard lead time for orders was six to eight weeks. When the company expanded into the oil and gas market, it had to make changes to meet that niche’s two- to three-week delivery expectations.

“We wholeheartedly embraced a made-to-order system and eliminated all batch processes in assembly areas,” said Scacchitti. “We had to realign our shop floor, move equipment and change our product and process flow.” Among the changes AUMA made recently was to eliminate the purchase of pre-assembled motors from its parent company in Germany and bring the assembly inhouse to turn products around faster.

By using a made-to-order system, Scacchitti said the company has decreased its lead times up to 270%. AUMA has also reduced waste. “With batch processing, you’re making com- ponents ahead of time. Materials may become obsolete or get recalled, so you end up with a lot of wasted products you can’t use,” he said.

A focus on cross-training helps Richards Industrials remain agile. “Almost all of our employees can do multiple tasks on multiple machines,” said Metz. “You can move them where the work is rather than moving the work to where they are. We have that flexibility throughout our machining and assembly areas.”

At Neles, shortened lead times are often driven by customers who are completing engineering work at the same time the supplier of flow control solutions is processing the purchase order. “This requires us to react quickly to changes to their purchase order and still try to keep their original promise date,” said Tinsley. One of the ways the company stays on track is by using a workflow system that records, tracks and reminds individuals of their to-do lists and due dates. A second tactic is the delayed differentiation strategy, which occurs on the production side.

“For certain industry segments, we produce a family of products that can later be differentiated into a specific end product, thereby reducing lead times,” said Tinsley. “We use a variety of strategies, from subassemblies stocked on the shelf to components that can be transformed into many different end-use items.”

ADVANCES IN AUTOMATION

A record 2.7 million industrial robots work in factories around the world, according to the International Federation of Robotics’ World Robotics Report 2020. That represents a worldwide increase of approximately 85% between 2014 and 2019. Despite the jump, the move to robotics and other automated systems isn’t a simple decision—or undertaking.

While Richards Industrials is investing in automation, Metz admits it’s challenging for the company because it has a high mix of products that it produces in low volumes. “Automation can help us, but it’s much more difficult to do compared to a high-volume, low-mix environment,” he said. One area where automation makes sense is machining to help minimize changeover and setup.

In addition to using robotic arms for high-pressure testing, Neles also relies on them for measuring and data mining of critical valve dimensions. Advancements have moved the task from coordinated measuring machines housed in a control area to robotic measuring arm equipment on the manufacturing floor. The company has several Hexagon Romer Absolute Arms in its Massachusetts facility to validate critical parts.

“In the past, measuring all these parts was so time-consuming. We had almost a ‘hope strategy’—build it, take it apart, try something new, repeat,” said Tinsley. “Now we are trying to be more scientific. Collected data is compared to our drawing and historical data. We then run 3D models to see if we could have a stack-up dimension issue. This eliminates wasted valve assembly capacity, rework and damaging essential parts.”

Neles also developed a machine for lifting and turning large valves—some the size of cars—that Tinsley said resembles a PAC-MAN character. “We stick the valves in the jaws of the PAC-MAN, squeeze it down, and the machine turns it over,” he said. “So we avoid using chains and cranes and lifting with people underneath the valves.” It’s a win-win, increasing both efficiency and safety.

A COMMITMENT TO DIGITALIZATION

Like agile manufacturing and automation, digitalization can take on many forms. Simply put, it refers to the use of digital technologies to change busi- ness processes and models. Two of the tools gaining buzz recently throughout manufacturing are virtual/augmented reality and digital twinning, which means to create a virtual representation of a component, product or process to run simulations before it’s deployed. But they aren’t the only digital technologies impacting industry.

Last year, Richards Industrials won the Manufacturing Leadership Award from the National Association of Manufacturers for innovating the company’s shop floor with FORCAM’s manufacturing execution systems (MES) software. MES packages collect and analyze data on the status of equipment and tools, personnel availability, material buffer to potential bottlenecks, such as tool changes or equipment downtime due to delays in receiving materials. The company uses the information to “dig a little deeper and find opportunities to make changes in the process,” said Metz.

AUMA Actuators has completely digitized all functional testing requirements for its products, which are configured to meet each customer’s specific needs for movement, speed, torque and other requirements. The company digitized data from nearly 3 million customer drawings. The data now runs through a computer system, and products are tested on custom-built testing stations. “You plug in the electrical actuator, pick the job number and the system pulls up pre-digitized functional testing for that order,” said Scacchitti. “You push a button, and when the testing is done it tells you what’s working or what’s wrong.”

Neles has invested in advanced planning software to connect supply and demand data from all its factories, which helps resolve one of the key supply management issues in the valve industry—part forecasting. The large number of markets, applications and variants in product lines creates erratic tial for inventory buildup on site while having shortages in another facility,” he said.

PLANNING FOR CHANGE

It’s a challenge for manufacturing companies to keep an eye on daily business while also forecasting where the industry is headed. To remain up to date, Neles Global Operations relies on internal talent, help from its parent company and collaborations with external experts.

“The valve industry is a small niche. It isn’t as lucrative for technology developers as other industries,” said Tinsley. “Most of our ideas for new technologies come from in-house, then we go out, search for a partner and get them interested. It takes a lot of internal development, then strategic partnerships with others.”

New technologies are just the tip of the iceberg. Companies must make decisions about offshoring versus onshoring, supply chain management, fulfillment strategies, material advancements—the list goes on and on.

“Change is inevitable,” said Scacchitti. “And in manufacturing, change is necessary to remain competitive.”

By: Susan Keen Flynn, Valvemagazine /  03/28/2025.