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CORRECTED-Composites can compete with steel in deep-water oil pipes

Sat, 20th Apr 2013 11:17

(Corrects Business Growth Fund in sixth paragraph to abank-backed fund, not government initiative)

* Magma Global and Airborne at forefront oil pipe technology

* Produce flexible pipes that do not corrode

* Recommended practice approval expected in June

By Stephen Eisenhammer

LONDON, April 19 (Reuters) - As the oil industry moves intoever deeper waters engineering firms Magma Global and Airborneare competing to develop piping that can take the heat and thecorrosion of production in places such as Brazil and the Gulf ofMexico.

For years steel piping has dominated the oil and gas marketbut with projects in Brazil's pre-salt going beyond 2,000 metresunder the sea and corrosive enhanced oil recovery techniques nowused widely, companies are looking for more flexible and durablematerials.

British engineering company Magma Global and Dutchcounterpart Airborne are pioneering composite pipes made from afusion of high-end fibres and plastics which are up to 90percent lighter than steel pipes and do not corrode.

That could bring them head to head with France's Technip and NKT Flexibles, majority owned by Danish group NKTHoldings, which use layered steel with a stainlesssteel or plastic lining and make the main offshore pipes.

The UK and Dutch private companies have caught the attentionof the oil majors and have contracts with companies such asShell, Total, BP and Exxon.

"What you're really doing is taking world class compositesengineering expertise and applying it to the oil and gasmarket," said Mike Sibson, investor at the Business Growth Fund(BGF) - an initiative to finance small firms backed by a numberof British banks.

BGF invested 8.8 million pounds ($13.46 million) in Magmaearlier this year for a manufacturing facility in Southampton.

"All the commercial attraction is for difficult applicationswhere their technology really has an edge," Sibson said.

HEAVY, VULNERABLE

Industry professionals say for some projects traditionalsteel pipes are too heavy and vulnerable to corrosion.

This can have severe consequences. French oil company Totalrecently said last year's leak at the Elgin field in the NorthSea was caused by corrosion weakening the pipes which were thenbroken by high pressure.

Magma produces a pipe made out of a carbon fibre and PEEKpolymer composite, which is the highest-end pipe in theindustry, according to commercial director Stephen Hatton.

"It doesn't corrode at all. It hardly ages in our terms,maybe in a hundred years or so, and has a very low fatiguesensitivity," Hatton told Reuters.

But the pipe is expensive. Hatton declined to give exactprices, but said it was competitive with the steel flexiblesproduced by Technip and NKT.

Across the North Sea, Airborne share the same concept butthink Magma have gone too high-end. Airborne uses glass fibreand a variety of plastics to produce a slightly cheaper moreflexible pipe.

"We have a staircase approach where we take small stepsstarting with simpler applications that are not so risky," saidMartin van Onna, Airborne's commercial director for oil and gas.

The ultimate goal for both companies is the production ofrisers, the pipe that connects the drilling platform to the oilwell. Composite pipes should be ideal for this use, but itremains difficult to persuade oil companies to go with thetechnology for the first time.

The biggest issue is developing an industry standard. Inthis way Magma and Airborne are partners. The two companies havecome together to commission independent research to give themrecommended practice. The results will be out this June.

"In some ways we are competing... but we are also helpingeach other. The signal we are sending out into the industry isthat there are more companies that fundamentally believe this isthe right technology," Van Onna said. (Editing by Keiron Henderson)

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