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2017 at Southwest Process Controls

In our 2016 recap, we gave you the lowdown on our company and its place in the constantly changing oil and gas industry. Now, with the New Year upon us, we’re looking ahead to what 2017 will hold for Southwest Process Controls.

Looking Forward as 2017 Begins

The start of a brand new year and business cycle holds an opportunity to reflect on past accomplishments and set new goals and objectives while continuing to do what worked well last year.

As always, our company aim is to provide customers with excellence in both quality fluid system control products and customer service. Our vast inventory includes tube fittings, tubing, pipe fittings, ball and plug valves, gauges, hoses, clamps, and more. They come in a range of configurations, sizes, and materials, dependent upon your needs.

The Southwest Process Controls team also will maintain presence at conferences for the oil and gas, petroleum, and petrochemical industries. These live events provide a great way to build business connections, learn industry trends, and discover the latest technologies – all of which benefit the products and service we provide to you.

Keep an Eye Out for what is to Come

The year ahead promises to bring new business opportunities, making for a proactive 2017. The New Year is reason enough for us to highlight our everyday resolution: to ensure our commitment to provide the best customer service possible. Our mission is for industry members to seek us as their top-performing vendor for fluid system control products we provide within the field and growing range of businesses.

As developments unfold during the year, here at Southwest Process Controls and throughout our related industries, we will keep you abreast of the latest information and resulting benefits for our client base. Follow us on both Twitter and LinkedIn for those updates and may 2017 be bright and prosperous for each and every one of you!

America’s Evolving Midstream Market

From Bust to Boom

The midstream market of the petroleum industry has seen its share of ups and downs in the past 25 years.  This sector, which encompasses the processing, storing, transportation, and marketing of petroleum products, was not seen as an area with much potential for future profitability as recently as 2006.  An article published by Deloitte details how the American midstream market was consolidated in the late 1990’s.  At that time, most domestic oil and gas supplies were located in readily accessible areas and could be reached through existing pipeline infrastructure.   Many forecasts were predicting that pipelines in the U.S. would be built out by 2006.  As we all know now, this was not the case.  No one foresaw the oil and shale boom that would soon upend years of conventional wisdom about domestic oil production, supplies, and storage.

Nearly Unprecedented Growth

Rail CarDuring the period from 2006 through 2012, this market saw a tremendous increase in investments.  Midstream companies doubled their investments during this period when compared to 1992 through 2006.  Deloitte reports that this increase in expenditures outpaced upstream companies at the time, making the midstream sector the third largest in the U.S. oil and gas industry, just behind supermajor companies and large independents.  In spite of these increases, companies providing storage, processing, and transportation were still having trouble keeping up with the needs created by the shale oil boom.  For example, in 2011, the U.S. Energy Information Administration reported that 35% of the natural gas produced in the Bakken shale was not on the market due to insufficient infrastructure.

Weathering the Storm

The surge of oil supplies caused by the domestic oil boom ended up playing a major role in the drop of oil prices.  As this trend has continued, new infrastructure construction has also slowed from the frenzied levels it saw a few years ago.  The industry as a whole is still struggling to adjust to the prices of oil we see now.  And yet, many experts are optimistic about the future of midstream companies.  In a recent webcast for the Oil and Gas Journal, petroleum expert Daniel Lippe points out that even though oil prices have dropped the need for storage and processing remains high.  Lippe notes that U.S. crude storage is currently at the highest levels ever recorded.  Meanwhile, the recent oil booms in domestic shale regions continue to change the United State’s position in the world from consumer to producer of crude. U.S. oil companies continue to push to end the ban on crude exports, which would open up new markets for their current oil stockpiles.  Depending on how this issue plays out, it is possible that the U.S. could become “the storage center for the world,”  for crude, as Lippe predicts.  This will require another major increase in midstream activity to build and maintain the infrastructure to store, transport, and process domestic crude supplies.

Signs of Life

In spite of the recent downturn in oil prices, companies are starting to invest in the midstream market again.  For example, Energy Spectrum Partners VII LP and members of the Bluewing management team have made an initial equity commitment of 100 million dollars to Bluewing Midstream LLC.  This capital will be dedicated to acquiring and developing terminals and transportation for oil and gas, focusing initially on the Gulf Coast.  As these trends continue, Southwest Process Controls will be there for midstream companies, providing a complete supply of valves, gauges, hoses, tubing, and a host of other essential products.  While the petroleum market remains notoriously difficult to predict, we stand firm as a reliable component source for all petroleum-based markets.  To learn more about the role our quality products play in the midstream market and more, please contact us directly.

Liquefied Natural Gas: Ensuring Energy Supplies for the Future

Vital for Transportation

LNGThe world is currently seeing some of its largest quantities of natural gas.  According to recent numbers published by OPEC, the amount of proven natural gas reserves has been steadily increasing for over 50 years, including a vast supply in the United States.  The question is no longer one of supply, but of transportation and access.  Towns, cities, and countries that need the energy from natural gas, but are not located near reserves, rely on advanced transportation methods.  This is where the liquefying process comes in; liquefied natural gas (LNG) is the preferred method for natural gas transportation, with a history that stretches back to 1965.  LNG has taken on a new level of importance in the United States, as growing domestic supplies have increased the level of domestic LNG processing and shipping.

The Basics

The most important part of liquefying natural gas is the cooling.  Natural gas is taken from a production field, the impurities are removed, and then the gas must be cooled to approximately -260° F (-162° C).  When natural gas is condensed into a liquid, its volume decreases dramatically.  LNG takes up only 1/600th of the ordinary volume of natural gas, making it the ideal form for large-scale transportation.  After transportation on specially designed vessels, LNG undergoes regasification and is typically transported via domestic pipelines.  This process is vital for delivering natural gas to the homes, businesses, and industries that rely on it, no matter how far away they may be from gas fields.

High Standards of Safety

Another advantage of using LNG for transportation is its excellent safety record.  While vessels that carry LNG are heavily protected against spillage, the nature of this compound is mostly benign to the environment.  If LNG is spilled on the ground, no damage occurs and no residue is left, as the substance completely evaporates.  LNG is also insoluble and evaporates in water, negating the need for any cleanup in the event of a water spill.  LNG is not stored under high pressure and is not explosive when mixed with the air; in an open environment, the energy levels in LNG cannot be released rapidly enough to create an explosive condition.  These factors demonstrate that LNG is one of the cleanest and safest fuels in the industry to transport.

A Growing Opportunity

Ten years ago, a paper published by the U.S. Department of Energy predicted a gradual overall decline in domestic natural gas production.  This was before the domestic shale boom that began around 2010, causing a widespread reinterpretation of America’s place as an oil producer.  Many industry leaders are now looking to increase the export market of domestic LNG, noting that the U.S. is currently holding 2,543 trillion cubic feet of recoverable natural gas.  All the while, the world’s need for this energy source keeps growing; countries in Asia, Europe, and South America are all experiencing an increasing demand for natural gas.  Some ports originally built for importing natural gas are now being used for exports, including the Sabine Pass terminal in Louisiana.  Projects such as these are not only poised to increase the United States’ position as an international energy trading partner, but could also help create thousands of new jobs in related construction projects.

Reliable Supplies for the Future of Natural Gas

The products from Southwest Process Controls are among the best in the industry.  They include all varieties of fluid system control products such as valves, fittings, gauges, regulators, hosing, steam and temperature control products.  While this exciting area continues to expand, we offer the natural gas industry the best quality supplies for their LNG needs.  Contact us directly to find out more.

Compressed Natural Gas: An Environmentally Friendly Alternative

A Viable Option

CNG or NGV gas tankViable alternatives to traditional fossil fuel products have been pursued for a long time, both in the United States and abroad.  Beginning as early as the 1970s energy crisis and extending into modern times, numerous measures have been explored to find cleaner burning energy and greater energy independence.  Compressed natural gas (CNG) is an alternative to gasoline that has been gaining a great deal of momentum in recent years.  Classified as an alternative fuel by the Energy Policy Act of 1992, CNG is a colorless, odorless, and tasteless gas that consists mostly of methane.  It is currently used to power millions of vehicles worldwide, and these numbers keep on growing.

Less Pollution, More Affordability

When compared to gasoline, CNG offers a substantial reduction in pollutants emitted into the air.  The statistics are impressive: when powered by CNG, natural gas vehicles show reductions in carbon dioxide emissions by 20% to 30% and reduced carbon monoxide levels up to 75%.  CNG also offers the reduction of volatile organic compounds by 55%, nitrogen oxide by up to 50%, and particle matter emissions up to 95%.  CNG is lead-free and its associated fuel systems are sealed, helping to prevent fuel losses from spills.  Also, when compared to gasoline or diesel fuel, CNG comes in at much lower costs.  The same power and performance using traditional fuels can be achieved at prices about 50% less with CNG.  Furthermore, a recent study indicates that natural gas production and storage levels have risen a great deal in recent years, predicting that reasonable prices will remain in effect for the foreseeable future.

An Abundant Domestic Resource

How is natural gas produced?  There are several different sources, including oil wells, coal bed methane wells, and natural gas and condensate wells; however, most natural gas is extracted in conjunction with crude wells.  Over 99% of CNG comes from the United States or other North American sources.  Domestic shale wells have been discovered to hold massive natural gas deposits, with current estimates approximating a nearly 100-year supply housed in them.  It is mined using a number of extraction processes, including hydraulic fracturing.  There are at least 22 shale basins throughout the United States, with two of the most productive being the Permian Basin and the Eagle Ford Shale in Texas.

Potential for Growth in the U.S.

The biggest users of CNG-run vehicles currently reside in the Middle East, South America, and China.  As of 2012, there were over 16.7 million vehicles powered by natural gas worldwide.  In the U.S., natural gas is mostly used for heating, but awareness for natural gas vehicle fuel is growing.  For example, Southern California Gas and the California Trucking Association recently teamed up to offer free natural gas trucking workshops.  Also, in Massachusetts, 325 new CNG buses were purchased for public transportation purposes.  A growing number of people are discovering the benefits of using CNG to fuel vehicles, both domestically and throughout the world.

Supplies for Alternative Fuel Processing

At Southwest Process Controls, we are one of the most trusted suppliers for valves, fittings, gauges, and other fluid control products.  Our products are used extensively in the CNG processing business, especially for oil wells in the Texas Basin regions.  To find out more about our products and to learn how they can benefit your operation, please contact us directly.

New Branch—Midland Odessa

Permian_BasinWhile the overall economic recovery in the United States has been uneven in recent years, the numbers posted in the Midland-Odessa region of Texas are strong.  The region’s unemployment rate clocks in at 3.4%, beating the national average of 5.8%.  Looking at more localized areas, the numbers are even better.  Some unemployment reports for Midland have bottomed out at 2.9%, the lowest level in the whole country.

The signs of economic growth can be seen elsewhere as well.  The regional economic index in the area was up 6.9% in September compared to the previous year, including a standardized rate of growth coming in at 8.5% in the third quarter.  Other signs of regional economic prosperity include retail spending levels, which were 13.2% higher in the third quarter of 2014 compared to the previous year.  Automotive spending also increased, with numbers coming in at 20% higher this year over the third quarter in 2013.  Construction activity also greatly increased, with $525 million in building permit valuations in the third quarter alone.

It is against this backdrop of prosperity that Southwest Process Controls has opened a new branch in the Midland-Odessa region.  Our fluid system control products are heavily used by the oil and gas industry—which is the cause of all this growth.  The Permian Basin is currently the scene of an impressive oil boom.  This region’s success is due to a number of factors, including highly productive wells and efficient well completion rates.  These conditions create powerful incentives for companies to continue and expand oil production in the area.

With strong levels of productivity occurring every day, oil industry operators need reliable suppliers of parts.  At Southwest Process Controls, we have dedicated ourselves to providing innovative and high-quality valves, fittings, and other fluid system control products for over 12 years.  These include a wide selection of exceptional parts from Hy-Lok, as well as diverse products from other manufacturers.  Our suppliers trust us to use our extensive product knowledge to provide products that perfectly fit our customers’ specifications and needs.

Our clientele at Midland-Odessa count on us for another important reason.  Many local distributors depend on shipping to deliver valves, fittings, gauges, and other supplies.  At Southwest, we maintain a specialized level of inventory control.  Whenever a customer in the oil industry needs a fluid handling part, we are very likely to have it in stock.  We keep a large number of products in our Midland branch at all times, including a diverse mix of types made from a variety of materials.  We stock alloys that many companies reserve for mail order, including Inconel 825, Inconel 625, Alloy C276, and others.  With our broad range of inventory, we serve as a one stop shop for oil drilling and all related customers.

Global Oilfield Service Case Study

In this day and age of online purchasing, finding a supplier that actually carries what a customer is seeking has become more challenging than ever.  Sure, the internet promises nearly anything our hearts desire, but as for sources really having what we want in stock?  It’s becoming rarer and rarer.  While this phenomenon might be merely annoying to someone wanting to browse different types of electronics, for example, it can be far more serious for customers in an industrial environment.  When operators in a facility or plant need a part, they often need it quickly.  Valves, gauges, hoses, tubing, and fittings are all vital to industrial operations.  If one of them malfunctions or breaks, any delays in getting a new one can create serious consequences, including sometimes shutting down entire systems.

At Southwest Process Control, we pay close attention to our inventory.  We keep a broad and specified supply of components based on our customers’ usage and feedback.  Our goal is to be able to ship 95% or more of the orders we receive on the same day they are placed.  In order to make this possible, we keep a wide range of products on hand.  This strategy is not embraced by all distributors.  In fact, over the last ten years, many distributors have attempted to increase their profits by making deep cuts in their inventory levels.  We strongly disagree with this short-sighted strategy.  Our focus is to ensure that all of our clients’ requirements are met as soon as possible, including rush and emergency needs.  We aim to be the source that has the components our customers need the first time they request them.

The oil and gas industry is well known for grueling schedules and operating conditions that put even the highest quality parts to the test.  One of our clients, a global oilfield service company, has a need for a specific alloy of tube fittings.  They were not always able to access these fittings in a timely manner, however.  They were generally used offshore, and could have been called for at any time.  This included late nights and weekends due to the extended hours of operation that this company provides.  The alloy used for these fittings is highly specified; there was no acceptable substitute for it, and no US manufacturer or stocking distributor carried these fittings when our customer needed them.

To solve this problem, we placed a large stock order with our manufacturer to keep an appropriate supply of these fittings at our facility in Houston.  In addition, we installed a consigned inventory of these fittings at their facility.  Our careful inventory control strategies made this client able to avoid the pitfalls they would encounter when they needed to re-stock these fittings at inconvenient times.  This ensured that our customer could access these fittings whenever they needed them—day, night, weekends or holidays.  While other companies attempt to save money by making inventories less available, we cement relationships by partnering with companies, determining their specific needs, and delivering a solution that really works.  To learn how our inventory processes can directly benefit your company, please contact us today.