Leading automation and power technology group
) recently signed a $100 million Joint Industry Program (JIP).
The two industry behemoths will develop solutions for
transmission, distribution and power conversion systems for
subsea pumps and compressors. The program is expected to take
five years to complete.
The scope of the JIP requires ABB to develop technologies for
powering and controlling subsea pumps and gas compressors at a
depth of 3000 meters. While ABB will focus on technological
development, Statoil will lead the program and represent all the
other oil companies who are participating and funding the
program. In 2012, Statoil and ABB had conducted a detailed subsea
power study and that forms the base for this program.
The equipment will be enclosed in pressure compensated tanks
filled with liquids, which will be then tested under full
pressure that the equipment will have to face at the targeted
water depth. ABB will be providing detailed design with material
and component report. It will conduct an extensive testing for
the 36 kV distribution unit and a couple of variable speed drives
for the pumps and gas-compressors.
There are various deepwater and subsea projects planned
globally and especially in regions like Norwegian continental
shelf and the Gulf of Mexico. This JIP would be vital development
on the technological front for supporting these large-scale
subsea projects by powering and controlling the pumps and the
The program is expected to have greater recovery rates, which
will not only improve the oil and gas resource utilization but
will also reduce the costs; thereby leading to an increased
production. This is because an efficient subsea power
distribution technology can supply power to several electric
loads through a single power cable.
Hence, this new technology is expected to save as much as $500
million by linking eight loads via a single cable to an
infrastructure located 200 kms away. The remote oil and gas
fields with limited access to the core infrastructure will be the
primary beneficiaries as the JIP is expected to support a 100
megawatt electrical power transmission spreading over a distance
of 600 Kms and the depth of 3000 meters.
ABB is a leading provider of integrated power and automation
solutions for conventional and renewable power generation plants
and water applications. The company's extensive offerings include
turnkey electrical, automation, instrumentation and control
systems supported by a comprehensive service portfolio to
optimize performance, reliability, and efficiency while
minimizing environmental impact.
ABB currently has a Zacks Rank #4 (Sell). Other stocks worth
considering at the moment are
),having aZacks Rank #1 (Strong Buy), and
Smith (AO) Corp.
) that carries a Zacks Rank #2 (Buy).
SMITH (AO) CORP (AOS): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
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