t.a. cook information study tar western europe

Market Study Western Europe

Technical services for turnarounds in petrochemical plants Information T.A. Cook Research & Studies, Berlin May 2011

Information about the publisher

Authors: Alex Lawrence Mateus Siwek Nina Wolfs Editors: Frank-Uwe Hess Rupert Clark Copyright: This Publication is protected by Copyright of T.A. Cook. It may not be exploited, in whole or part, without the approval of the publisher. This applies in particular to any forms of reproduction, translation, microfilming and incorporation and processing in electric systems. Publisher T.A.Cook Consultants Leipziger Platz 2, D-10117 Berlin Tel.: +49 30 884207-0 | Fax: +49 30 884307-30

19.05.2011 © Copyright T.A. Cook Consultants, Research & Studies Seite 2

Table of study contents (1)

TABLE OF CONTENTS 3 1 MANAGEMENT SUMMARY 16 2 OBJECTIVES AND SCOPE 63 2.1 BACKGROUND 63 2.2 MOTIVATION 63 2.3 STUDY OBJECTIVES/QUESTIONS 64 2.4 METHODOLOGY 65 2.5 SAMPLE COMPOSITION 71 2.6 PROBLEMS AND LIMITATIONS OF THE STUDY 79 2.7 TERMINOLOGY 80 2.8 INTRODUCTION TO TURNAROUNDS 83 3 FRAMEWORK CONDITIONS 93 3.1 LEGAL FRAMEWORK CONDITIONS 93 3.2 ECONOMIC FRAMEWORK CONDITIONS 100 3.3 SPECIFIC TURNAROUND REQUIREMENTS IN THE PETROCHEMICAL INDUSTRY 118



4 OPERATORS OF PETROCHEMICAL PLANTS 131 4.1 OVERVIEW 131 4.2 COMMERCIAL ASPECTS OF SHUTDOWNS & TURNAROUNDS 142 4.3 ANALYSIS OF DEMAND VOLUME 143 4.3.1 Factors Determining Demand for Technical Services 143 4.3.2 Calculation of Current Market Volume 147 5 SPECIFIC SERVICES FOR TURNAROUND PROJECTS 157 5.1 PROJECT MANAGEMENT 160 5.2 MECHANICAL WORK 168 5.3 ELECTROTECHNICS/ INSTRUMENTATION & CONTROL TECHNOLOGY 188 5.4 SAFETY ENGINEERING 191 5.5 INSPECTIONS 195 5.6 INFRASTRUCTURE/LOGISTICS 198 5.7 SCAFFOLDING 202 5.8 CLEANING OPERATIONS 203 5.9 REFRACTORY LINING OPERATIONS 205



6 BUSINESS AND ORGANISATIONAL MODELS FOR SERVICE PROVIDERS 207 6.1 STRUCTURE OF TECHNICAL SERVICE PROVIDERS 207 6.1.1 Historical Development 207 6.1.2 Classification of Service Providers 211 6.2 THE DEMAND CONFLICT FOR TURNAROUNDS 220 6.2.1 Too Many or Too Few Projects 220 6.2.2 Ways Out of the Demand Conflict 222 6.3 TAR SERVICE PROVIDER BUSINESS MODELS 226 6.3.1 Basic Business Models 226 6.3.2 Relationship Models between Plant Operators and Technical Service Providers 232 6.3.3 Payment Models 239 6.4 SELLING & MARKETING TURNAROUND SERVICES 242 7 TURNAROUND SERVICE PROVIDERS 249 7.1 THE TOP 25 TAR SERVICE PROVIDERS 249 7.2 DYNAMICS AND CURRENT DEVELOPMENTS IN COMPETITION 324 7.2.1 Distribution and Reach of Service Providers through Western Europe 324 7.2.2 Service Provider Market Positioning 342 7.2.3 Competition in Specific Turnaround Trades 349 7.2.4 Trends in Market Developments 362 19.05.2011 © Copyright T.A. Cook Consultants, Research & Studies Seite 5


8 FUTURE TRENDS, STRATEGIES AND SCENARIOS 371 8.1 MARKET DEVELOPMENT TRENDS 371 8.1.1 Development of Demand through 2020 372 8.1.2 Impact of Capital Projects 378 8.1.3 Changes in Turnaround Strategy 380 8.1.4 Development of Organisational Cooperation 385 8.1.5 Competition and Market Developments 391 8.1.6 Influence of Technological Developments 400 8.2 DEVELOPMENT PERSPECTIVES AND POSSIBLE MARKET SCENARIOS 402 8.2.1 Scenario 1: Dominant Service Provider 404 8.2.2 Scenario 2: Mobile Turnaround Networks 406 8.3 STRATEGIC COURSES OF ACTION 408 9 APPENDIX 413 9.1 ILLUSTRATIONS 413 9.2 INDEX OF TABLES 417 9.3 REFERENCE MATERIAL 418 9.4 OPERATOR PROFILES OF PETROCHEMICAL PLANTS 419 9.5 COMPANY PROFILES OF SELECTED SERVICE PROVIDERS 598 9.6 TABLE OF SUPPLIERS 671 19.05.2011 © Copyright T.A. Cook Consultants, Research & Studies Seite 6


Study Objectives/Questions

What types of contracts have been most common in this sector to date and which will become more important in the future? What requirements do technical service companies have to fulfil in order to achieve a significant position in the market for TARs? What opportunities are there for large and small providers of technical services to strategically position themselves? How do international trends affect service companies in Western Europe on the long term?

Who exactly are the customers of technical services for turnarounds and how large is the annual volume of contracts awarded each year for turnaround services in the petrochemical industry? Who are the suppliers in this market segment, what services do they offer and how are they positioned in the market? How will demand and supply develop until 2020? How has competition between technical service providers developed? What economic conditions and legal requirements determine the market for turnarounds in petrochemical plants?


Target groups

173 Plant Operators

Petro-chemical

Refine-ries

Cracker


Target groups

461 technical Service Providers

1

23

126 5

2

6

6 13

3

79

3 5

48

141

Distribution of studied service providers through Europe

Home/main countries only


TAR demand in Western Europe

TAR demand volume in Western Europe is about 2900 million € per year

Refineries 1935

(66.5%)

Cracker 254

(8.7%)

Petrochemical plants 722

(24.8%)

Detailed description, analysis and figures on TAR cycles, frequency and dates can be found in the study


TAR demand in Western Europe

Graphics on the number of plants, TAR volumes, capacities and many more can be found in the study.


Future Trends

Which trends w ill influence Turnarounds in the future?

3%

3%

6%

9%

21%

15%

19%

9%

9%

29%

15%

32%

38%

36%

16%

18%

30%

44%

47%

32%

28%

27%

44%

58%

33%

24%

32%

26%

14%

21%

22%

15%

24%

0% 20% 40% 60% 80% 100%

Longer periods between Turnarounds

Shortening downtime

Increasing availability of components

Increasing share of additional projects

Tougher safety requirements / regulations

Outsourcing Turnaround project management and planning

Long term partnerships between plant operators and main contractors

Decreasing prices due to competition

Not important Low importance Important Very important Essential

Mateus Siwek

Senior Research Consultant

T.A. Cook Research & Studies

Leipziger Platz 2

10117 Berlin

+49 (0) 30 88 43 07-0

[email protected]