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Home / Issue Archive / 2007 / August #8 / Uraltrubmash CT Gets Competitive with Finish Strip, New Tech Processes

№ 8 (August 2007)

Uraltrubmash CT Gets Competitive with Finish Strip, New Tech Processes

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Long-length flush-joint pipes (or “coiled tubing” –  CT) are not produced in big or even small lots. However, coiled tubing, which has been successfully used in the last decade as a replacement for traditional joint pipes, today enjoys a big demand at Russian oil and gas fields as the key element of the namesake technology for wells repair and drilling. Three companies producing these piece goods compete today on the Russian market: American companies Precision Tube Technology (a part of the TENARIS group) and QualityTubing (a part of National Oilwell Varco) well known internationally in the coiled tubing industry and Russian Uraltrubmash.

When operated, coiled tubing is subjected to cyclic oscillating loads, so the pivotal question for the consumers is this: how many round trips can a coiled tubing unit sustain before the appearance of the defects, which start to cause intractable problems during operation.

The Russian plant Uraltrubmash has a hard time “keeping it up” on the Russian_editor_utm101.jpg market. International companies, which have secured a long-standing solid footing on the international coiled tubing market and practically divided it up among themselves, have been perfecting the technology of coiled tubing production for decades.

About ten years have passed since first Uralian coiled tubing pipes were shipped Urengoigazprom in Western Siberia. During these years the specialists at the plant have done a lot to make the quality of the tubes conform with the international standards and API standards; they have been refining the production of coiled tubing from steel blanks (strips). The change of ownership at the plant stimulated conversion of quantity into quality. Sluggishness typical for a “daughter” of LUKOIL was replaced with a blistering pace of development set in motion when the plant was bought by the trading house National Pipe Company. The plant has plans for a large-scale upgrading.

Late in July OGE representatives went to Chelyabinsk, one of Russia’s hubs of steel-making in the Southern Urals region, to have a look at how coiled tubing is being made today.

Andrei Brylkin:
“We have never been pessimists”

_editor_komdir.jpgAndrei Brylkin, commercial director of Uraltrubmash, has been working at the plant since its founding in 1993. Аnd coiled tubing production is something he is very keen on.

Oil and Gas Eurasia: Andrei Vladislavovich, in 2006 the plant dissociated itself from LUKOIL. What changes has it brought about? Judging by what was published in the June issue of Oil and Gas Eurasia, you are optimistic about the future.

Brylkin: We have never been pessimists. Even the construction of the plant was started at the transition period, which was difficult for the country. But, for LUKOIL, the plant had always been a non-core asset: the company produces oil and we produce pipes. The share of our produce in the general sales volume of LUKOIL was disproportionately small. Naturally, LUKOIL saw no reason to invest in the plant. The plant was built, and it was bringing a small profit, its cost-effectiveness was nearly null, but everyone felt OK about it. Today the situation has changed radically, the plant is now owned by a young and fast developing metal trading company interested in diversifying its business. Under the new owners, the focus has been not only on producing high-quality items, but also on bringing some profits, at least on par with the industry’s average level. And with pipes like this the profits, I think, should be even higher, because we produce tubes not by ton but by piece – this product has a higher added value. We make a good use of the money invested in the plant development, introducing new technologies or upgrading the existing ones, and the focus is on up-to-date technologies: technologies of today at the minimum, and technologies of tomorrow at the maximum, this is why we’re more optimistic now. We started working on the program of technical upgrade as far back as 2002. It took us several years to figure out how to make our production in the near future, first, high-tech, second, sufficiently profitable.

OGE: What exactly do you upgrade in your technologies?

Brylkin: We upgrade everything relating to our main production items including coiled tubing and precision tubes for general-use and oil machine industry. The production process is based on production of longitudinal electric-welded tubes. So if we upgrade the electric-welded tubes production as a part of our key technological process, we do the upgrading in both sectors, because both types of tube are processed at the same mill. For this purpose we plan to acquire maybe the most up-to-date equipment presently available in Russia. This highly sophisticated English machinery is supplied by the world’s leading manufacturer – the Thermatool (an Inductotherm Group) company. Then the technological processes diverge because coiled tubing is a reusable item, while precision tubing is in fact a single-use item. Today we’re working on our precision tubing program, and our plant is to become a full-service facility for precision tubing production. As for coiled tubing, here too we have big plans. Our plans include improvement of welding, improvements in local heat treatment of weld butts and improvements in volume heat treatment, as well as transfer to the scheme of rolling on horizontal axis.

OGE: Please tell why you chose Thermatool.

Brylkin: When a pipe manufacturer applies for the API certification, weld butts done with equipment made by Thermatool, which is the world leader in welding equipment manufacturing, are not subjected to any testing. Thermatool equipment is considered to provide for a weld butt of such a high quality that it can be certified right away without additional tests.

OGE: When do you plan to buy their hardware?

Brylkin: Perhaps, this year.

OGE: In your opinion, what factors today contribute the most to possible quality deterioration and what is being done for solving the problem?

Brylkin: Foreign-made tubes owe their quality to the fact that the companies have gigantic output rates and gain a huge experience through this. Everything that has been done in coiled tubing branch today has been achieved not in the field of theory, but in the field of industrial experience. Because our output rates are smaller, our practical experience is correspondingly much more modest.
Besides, you should keep in mind that we have to produce a tube where every inch of its four kilometers must be the same as all the other inches, which means that all four kilometers of the tube must be so unfluctuatingly uniform that there is not a single millimeter-wide defect, which can affect the quality of the tube. This goal is hard to achieve, and because of this there are very specific requirements as to the quality of metal and production technologies.
We probably made a mistake once when we chose to do it “Russian way,” deciding to use Russian-made steel in Russian coiled tubing. Americans did not look for steel at home, they started at once buying strips in France and Japan. We spent lots of time on improving the steel-making technology at Severstal. But if we had applied all these energies to improving our technologies, we would have set up a production process not inferior to those in other countries. On the whole, our production process is similar to the American one, but there are details that it took years for Western tube-makers to fine-tune. And finally we found ourselves at the dead-end:  those metal-makers do not care today if we buy from them or not. In the huge output rates of the mammoth integrated plants, which produce hundreds of thousands tons, our 100 or 200 tons weigh nothing at all.

Over the last year, when we completely gave up on Russian metal-makers and _editor_utm016.jpgstarted using only foreign suppliers, we spent only a month solving commercial problems, and the rest of the time we could occupy ourselves with technology issues. In my opinion, we’ve covered a lot of ground, because we’ve got out of the way many problems that are non-relevant to us. We know what the quality of steel should be like, but how steel-makers bring it off is none of our concern. Today we do not buy steel for coiled tubing in Russia.

OGE: Who is this company that earned your confidence?

Brylkin: The Finnish company Rautaruukki Corporation (Ruukki).

OGE: In the past were you considering options of cooperation with other foreign companies?

Brylkin: We’re still considering these options, but Arcelor, to name just one, is a global institution which perhaps is not very interested in our purchase requisitions. Meanwhile, unfortunately, there is a radical difference between the business “our way” and the business “their way.” When we’re just establishing contacts with foreign specialists, we receive feedback right away: the company’s representatives two or three times came from Finland to our plant, although we said at once that we would be buying the minimum. We certainly have not given up on Sumitomo or Arcelor. Maybe we’ll arrive at it when we’ll completely upgrade our production process on the basis of Ruukki’s steel. And then, most likely, we’ll be choosing between three suppliers: Rautaruukki will remain number one, then the French (they are closer) and the Japanese.

OGE: Are there actual results as to improvement of tubes quality?

Brylkin: ROSNITI (Russian Research Institute for the Tube and Pipe Industries) conducted tests; there is an evaluation from the Ural-Design (based at the city of Kungur), an operating company that the Finnish steel we use can be recommended for the production of long-length tubes. With respect to characteristics, this steel is better than the steel from Cherepovets.
Today the average usage cycle of the tube is 86 round trips, while the warranty covers 50 cycles of oscillating loads. Sure, there are extremes, such as 200 trips in Kogalym and 20 in Krasnodar. But we carefully consider both cases, we never refuse to discuss quality in a reasoned manner.

OGE: As for the price/quality ratio, do your products have an edge?

Brylkin: Americans supply to different markets at different prices: one price for Libyan market, another for Russian market, yet other price for American market. As for the price, out tubes undoubtedly have an edge, and only consumers can answer the question about the performance characteristics: how many round trips did the tube sustain, on what rig, with or without repair, etc. By the way, delivery time for our tubes – 45 days, an advantage over imports.

_editor_utm025.jpgOGE: What companies are main consumers of flush-joint long-length pipes from Uraltrubmash?

Brylkin: Gazprom subsidiaries are our main clients. Today we’re ready to satisfy the needs of all the main clients except for Rosneft, Surgutneftegaz, and foreign oilfield service companies such as BJ Services, Halliburton, Schlumberger. Our market segment includes Gazprom, Pervomayskhimmash and Russian service companies.

OGE: How big is your share of market today?

Brylkin: No more than 30 percent. For one simple reason: the market grows bigger not by Russian hardware, but by hardware of foreign contractors. And imported parts fit this hardware. If I bought a Toyota car I would not use China-made parts on it. It’s normal.
But we would like to have Russian coiled tubing producers on the market. We are even ready to lend a helping hand to these brave ones, because Pervomayskhimmash does not produce medium and heavy hardware, and the plant is not interested in supplying just 2-kilometer-long tubes. But I think this will not happen because of quite a big demand for light hardware.

OGE: Do you make attempts to find out what the consumers want, to heed the consumers’ desires; in other words, is there a feedback chain with the consumers?

Brylkin: Every year in March we conduct consumer surveys.

OGE: What other coiled tubing applications seem promising to you?

Brylkin: Everything old is new again. If the first industrial use of coiled tubing was connected with the pipeline construction under the English Channel for fuel supply to the Continent during World War II, I think the idea deserves to be contemplated again. We fundamentally disagree with the stance that coiled tubing, which is intended for construction, should cost as much as pipes used for trips down the hole. The pricing of the tubes should make them a cost-efficient substitute for the pipes of limited length. As for transportation, a simple and reliable truck costing about the same as a chassis should be enough.
We are willing to tackle this issue vigorously, and we already have some results of the tubes use for methanol pipeline construction in Western Siberia, Urengoigazprom. In March representatives of our plant visited the fields and saw with their own eyes how easily the tractor unspooled the tubing. The works can be performed at any time of a year; the consumer has a tangible economic effect, and a significant one. The thing is that in the conditions of the far north people are faced with very difficult choices, and if a certain technology is not cost-effective for a company, the company simply does not use it.

OGE: Can the efficiency be measured already?

Brylkin: Of course the client can see for himself the economic advantages, but here is one example. It took the tractor a couple of minutes to unspool fifteen hundred meters of tubing. When you need fifteen hundred meters of pipe, what does it mean to use 12-meter long pipes? How many pipes have to be laid, how many Ural tractors have to be employed to bring these pipes from the storage facility several hundred kilometers away? A crew of welders, a crew of NDT inspectors must be permanently on site; a special machine for pressure testing of weld butts must be on site too; 30 percent of such weld butts produced in northern climate usually start “leaking” at once in freezing temperatures. In other words, for several days about 20 people must be present on site.

OGE: In your opinion, how big the coiled tubing market will be in five years?

_editor_utm041.jpgBrylkin: There are many service companies on the market today, so I’ll venture that there may be an explosive growth in the future. Russian companies are eager to buy equipment which is reliable and not very expensive. The Eurasia drilling company and Integra are the companies that can handle large-scale projects. Many companies are in their formative years now, and at this stage it is difficult to invest in novel equipment. But if someone comes up with attractive proposals to supply the hardware for reasonable prices, or better yet, to lease it, with adoption… I think that service companies such as the ones I’ve mentioned can afford to buy a certain amount of the units and, correspondingly, tubes.

Uraltrubmash

Back in 1993, LUKOIL together with the Ural Research Institute for the Pipe Industry founded the Uraltrubmash Company to cater for the oil industry’s needs as Azerbaijan had stopped delivering pipes.

Pipe manufacturers were given ample opportunities thanks to installation of a state-of-the-art pipe electric welding plant together with a carbonization line tube block for pipe barrels, honing devices, computer-aided systems for the precision straightening of pipes and rods with laser-based alignment control, as well as nondestructive weld test devices and TV control system for pipe barrels. First coiled tubing was manufactured by the original enterprise facilities in 1998, and in 2002 a special-purpose manufacturing complex was inaugurated. Today, it manufactures long flush-joint pipes.

Currently, Uraltrubmash manufactures such import-substituting products as pipes used in making of cylinders for sucker rod pumps employed in oil production, as well as electric welded cold drawn steel tubes to make cases for submersible electric motors and pump frames. Other import substitutes include coiled tubing of 33.5 х 3.0 mm and 38.1 х 3.0 mm sizes for oil and gas wells repair. The company uses a well-proven technology to manufacture small-diameter stainless steel pipes for instrument making, for medical equipment and aerospace machinery. In the last few years, the production of this type of pipes has grown annually by 10 percent. The works management plans to increase the overall production by manufacturing larger diameter pipes. Among its import-substituting products, the company lists precision tubing used for thin film and aluminum foil winding. The ongoing upgrading of this production line will enable the company to reduce the load on the main plants, the operation of which involves various technologies.

What affects coiled tubing’s lifetime?

Evgeny Simanov, leading production engineer at Uraltrubmash

_editor_2_Simanov.jpgThe most important factors, which cause pipe wear in the course of operation include, as a rule,   cyclic bending in combination with internal pressure, corrosive wear including  that under stress, and also pipe wall thinning caused by rubbing against the wellbore walls during tripping. Besides, pipe life reduction can be also caused by mechanical damage – formation of scratches and burrs in the process of incorrect operation, heterogeneity of mechanical properties of the pipe material related to presence of welded joints. Among the determining factors may be the instability of geometry and properties, as well as inadmissible defects, such as slivers (macro-defects), delamination, and nonmetal inclusions (silicates).  For example, a steel roll can be good in general, but there could be a sliver somewhere in it. Obviously, the pipe will rupture in that place. Effect of nonmetal inclusions has not been studied completely yet, but we encountered such phenomenon that inclusions were found in the places of defects. The third point of nonmetal inclusion content is considered to be critical (GOST 1778). Silicate content in some rolls of tube strips supplied by Severstal was at the fifth point level.

The Distance is no Obstacle for Cooperation

The Finnish company Rautaruukki (currently using the marketing name Ruukki) with headquarters in Helsinki is the leading European supplier of metal solutions for construction and machine engineering.

The company was founded in 1960 by the Finnish Government to provide the steel supply needed by the nation’s heavy industries. Since part-privatization in 1994, the state has gradually decreased its holding in Rautaruukki to 40 percent.

The company’s professionals are experts in the production of metal components and systems and particularly in metal processing.

Close cooperation of Ruukki with the Chelyabinsk plant “Uraltrubmash” began as early as 2004 and in a year’s time, in March, came the first supply of strip for coiled tubing production. Ruukki, which possesses a considerable experience in developing different kinds of steel, chose a solid moldable construction steel S420MC for this kind of product. In the course of cooperation a few hundred tons of strip were supplied for the Russian coiled tubes producer. One of the most daring projects of Ruukki is a 5-fold increase of supplies by the year 2008.

Meanwhile Across the Pond…

Tenaris is working with Xtreme Coil Drilling to set a new record in drilling with coiled tubing. The companies are working together on a project that is pushing the limits of coiled tubing drilling technology while introducing deep coil drilling to the US Rocky Mountain area.

Xtreme Coil, a specialized Canadian coiled tubing drilling services company, is pioneering the use of coiled tubing in downhole drilling applications to 10,000 feet, beyond 3-inch coiled tubing’s historical technical drilling limits.
As part of the project, Xtreme Coil asked Tenaris to produce the first strings of coiled tubing. The request required Tenaris to develop new 3-inch outside diameter (OD) tubing capable of drilling a 10,000-foot well.

The coiled tubing strings that Xtreme Coil required to drill 10,000-ft wells had to be light enough to transport on trailers, yet robust enough in terms of wall thickness and yield strength to withstand the rigorous exposure they would receive in drilling. Coiled tubing experts at Tenaris worked with Xtreme Coil’s engineers to develop coiled tubing string designs that could withstand the load, operating and external pressures, and fatigue that the coiled tubes experience when drilling deep wells.

“We examined different diameters, wall thicknesses and grades in order to produce pipe that would best fit their needs,” explains Bruce Reichert, Tenaris Coiled Tubes Technical and R&D Manager. “The final product is the result of a team effort by both companies.”

To date, Tenaris has produced 12 strings of the newly developed coiled tubes for Xtreme Coil to use on the project, and it anticipates that demand for 10,000-foot well strings will increase as more experience is gained drilling the deeper wells.

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