At Siemens’ Pipeline Demo Center, an entire
Raw Materials | Pipelines
pipeline can be simulated — from control center
to valve station. Except for its size, everything is
the same as in a real facility (right).
A
shiny silver pipeline snakes over austere,
brown hills, past dusty, green prickly pears
that haven’t seen a drop of water in ages. Then
it changes direction at a 90-degree angle and
runs straight toward a compressor station
where its pressurized gas content flows
through a valve with a loud hiss.
No, this is not New Mexico, but the city of
Fürth near Nuremberg, Germany. More specifically, the action is taking place in building “F” of
a Siemens site, where hardly anyone would expect to see a pipeline. What’s more, the
pipeline isn’t a real gas pipeline, but instead
only a tube about ten centimeters in diameter
that transports nothing more than ordinary air.
The brown hills are just poster images on a
wall, and the prickly cacti are made of plastic.
Otherwise, everything here is brand new.
At the Pipeline Demo Center everything has
been reproduced faithfully. There’s a master
control center, where information about the
pipeline is collected on six displays; a second
control center that runs on hot standby should
the master control center fail — otherwise
gry nations, they are playing an ever more important role.
“Transnational and even trans-continental
pipelines are becoming increasingly important,” says Sinha. The pipelines that transport
gas and oil from production fields to consumers are often thousands of miles long.
“That places extremely high demands on the
system’s reliability and security,” he adds.
On the one hand, system operators must
guarantee that the transport of the needed raw
materials conserves resources to the greatest
cations and security equipment, and control
computer software.
Because of its expertise, Siemens is currently involved in two large pipeline projects. In
South Africa, the company is equipping the
control center and pumping stations of the
“New Multi-Product Pipeline” with a fully automatic monitoring and control system. This
pipeline, which runs from Durban to Gauteng,
belongs to the Transnet, which operates the
South Africa’s 3,000-kilometer pipeline network. The project is scheduled for completion
Hardisty in the Canadian province of Alberta, is
scheduled to enter service in late 2009 and will
have a capacity of up to 590,000 barrels of
crude oil per day. Hardisty is located in the
huge (roughly 141,000 square kilometers)
Athabasca Oil Sands area, which is believed to
hold reserves of about 178 billion barrels. In
the past, oil sands were deemed to be too expensive to harvest because oil has to be practically “washed” out of the ground. But in view of
record petroleum prices, it is now economical
to exploit these reserves (see p. 34).
extent possible — which requires powerful
pumps in the case of oil and high-performance
compressors for gas. On the other hand,
pipelines must also be protected against terrorist attacks and must be monitored continuously to prevent leaks. All of this requires a sophisticated
system
that
automatically
measures physical parameters such as pressure, along the entire line and transmits the resulting information to the control center via radio or satellite. Increasingly, fiber-optic cables
are being laid along the pipelines too — “if the
infrastructure of the country permits,” says Peter Wappler, who works in Erlangen and is responsible for the pipeline business.
before the 2010 Soccer World Cup kicks off, at
which time it will be able to transport 16 billion
liters of various raw materials — ranging from
petroleum to diesel fuel or kerosene — per
year.
Since 1996, a team from Siemens has been
working on renovating and automating old
pumping stations that are in part still operated
manually so that the pipeline can be completely controlled from the master control cen-
Previously, part of the Keystone Pipeline
transported gas. But the pipeline is now being
converted to oil transport. The pipeline initially
runs eastward to a point southwest of Winnipeg, where it bends sharply southward. It
terminates at the border between Nebraska
and Kansas. From there, one branch goes to
Patoka, Illinois, and another goes to the gigantic Cushing tank farms in Oklahoma, and then
on to refineries in Texas. Siemens will supply
Intelligent Pipes. Siemens not only produces
a spectrum of instruments for pipeline operators, but also offers software solutions that
control and monitor entire pipeline systems.
“The company is present all the way from the
point where raw materials are fed into pipes to
the tanks where they are stored before being
distributed to customers,” says Wappler. Operators can therefore buy everything from a single
supplier, whether it be compressors with associated drives, electric motors or gas turbines,
associated automation technology, communi-
ter in Durban. “Combining the old and the new
— that’s the challenge in this project,” says
Wappler. Existing parts, like pumps, valves and
communications equipment, must be integrated into the new control system.
Siemens is also playing a key role in a major
Canadian energy project. A few months ago,
TransCanada Corporation awarded Siemens a
contract to equip its Keystone Pipeline with
power supply equipment and electrical pump
systems — an order worth €150 million. The
3,456-kilometer pipeline, which begins in
Optimizing Our Lifelines
Pipelines carry valuable raw materials to consumers. Keeping natural gas and oil
flowing as quickly and reliably as possible requires powerful compressors and
pumps, as well as sophisticated software that monitors and manages pipelines
around the clock. Not only does Siemens supply all of the technology needed, but
customers can also check out what’s on offer in a new Pipeline Demo Center.
known as a Disaster Recovery Center; a compressor station, where the gas is compressed to
allow transport through the pipeline in the first
place; and a measuring station with read-outs
of the flow rate, temperature, pressure and vibration of the pipes.
Simulated Disaster. In addition to simulating
normal operations, the Pipeline Demo Center
can simulate disasters. Sanjeev Sinha, sales
manager for pipeline projects and supervisor of
the Demo Center, illustrates a simulated attack
in which the control center has been disabled.
The computers at the adjacent table immediately intervene; the Disaster Recovery Center
takes over. And in no time, the monitors show
the location at which gas is escaping from the
pipeline.
The pressure drops, but not for long. The
valves in the critical section are automatically
sealed and the leak is isolated. “What this facility provides is a unique opportunity for customers to follow the entire path of oil or natural gas through a pipeline and test associated
monitoring systems,” says Sinha.
Pipelines are our civilization’s arteries, and
in the age of increasingly scarce raw materials
and growing competition among energy-hun-
26
Pictures of the Future | Fall 2008
Siemens will help to transport 590,000 barrels of oil a
day from Alberta, Canada to refineries in Texas.
37 pumping stations, the associated switching
stations, 19 transformer stations, as well as
power distribution systems.
Powerful Compressors. Siemens is setting
standards not only in integrated software solutions for pipeline management, but also in
compressors. Since July 2008, the “Megatest
Center” — an extension of existing manufacturing and testing facilities in Duisburg, Germany — has been in operation in a 180-meter,
40-meter-wide and 35-meter-high factory hall
Pictures of the Future | Fall 2008
27
Valuable Raw Materials:
aw materials are basic substances that enter pro-
Global oil consumption at the moment is around 30
2015. “That’s because the situation on the oil markets
duction in an unprocessed state. There are plant
billion barrels per year; proved oil reserves are currently
will remain tense, as supply struggles to keep up with
and animal-based agricultural raw materials, industrial
calculated at 1.1 trillion barrels. According to the Insti-
demand,” says IFP Director, Olivier Appert.
raw materials such as petroleum and natural gas, base
tute for the Analysis of Global Security (IAGS), the lion’s
Demand for natural gas will also continue to rise.
metal ores such as copper and iron, and construction
share of these reserves (66%) are to be found in the
Germany accounts for 18% of European gas consump-
raw materials such as sand and gravel.
Middle East, primarily in Saudi Arabia (23%). The second
tion, making it the second-largest natural gas market in
28
Pictures of the Future | Fall 2008
ing capacity to 800,000 tons per year by 2014. Chile
OPEC: Oil Production
Stretched to Capacity
currently accounts for more than 30% of global copper
reserves, followed by the U.S. and Indonesia (7% each).
Iron, in the form of steel, is by far the world’s most
Production
Available
important metal. A total of 55 million tons of steel (ap-
in April 2008
capacity
prox. one-third of total European demand for steel) was
9.05
10.90
used by the construction industry in the EU in 2005. The
and third largest reserves are in Canada (15.8%) and
Europe after the UK (20%). An analysis carried out in
resources. Reserves refers to those raw materials whose
Venezuela (7%). After reaching a record high of $147
2005 by Prognos and the Institute of Energy Economics
Iran
3.93
4.02
existence has been proved, and which can theoretically
per barrel in mid-July 2008, the price of oil has fallen by
at the University of Cologne predicts that natural gas
United Arab Emirates 2.65
2.88
be economically obtained with today’s technologies. Re-
nearly $50 per barrel, but future developments are un-
consumption in Europe will increase from 480 billion cu-
Kuwait
2.59
2.62
sources, on the other hand, have either not been pre-
clear. There are several reasons for high oil prices. De-
bic meters in 2003 to 640 billion in 2020. The Interna-
Iraq
2.34
2.45
cisely geologically located, or else have been demon-
mand is rising, especially in China and the U.S. This situ-
tional Energy Agency reports that global natural gas
Venezuela
2.32
2.50
strated, but the cost of their extraction remains
ation is exacerbated by financial speculation, the threat
consumption will increase by 1.5% a year over the next
Nigeria
1.86
2.47
uneconomic. A study conducted in 2005 by the Fraun-
of political conflict, and OPEC ceilings. OPEC president
two decades, reaching some 4.055 trillion cubic meters
Angola
1.82
1.82
hofer Institute for Systems and Innovation Research, the
Chakib Khelil says he expects the long-term oil price to
per year by 2030. Nearly 36% of global natural gas re-
Libya
1.76
1.80
(German) Federal Institute for Geosciences and Natural
settle at $78 per barrel, provided the dollar increases in
serves are located in Russia, which is followed by Iran
Algeria
1.38
1.40
Resources (BGR), and the RWI economic research insti-
value and the political situation in Iran improves. The
and Qatar (approx. 20% each). World market prices for
tute concluded that rather than being depleted, the re-
head of Investment Strategy at SEB Bank, Klaus
natural gas are developing in a manner similar to oil
serves of many raw materials have actually been in-
Schrüfer, believes prices will hover at just above $100
price developments, except with a certain time lag. At
perts at the BGR, annual global copper consumption will
creasing due to technological advances, exploration,
per barrel in 2009, while the IFP energy research insti-
the end of July 2008, for example, the price of natural
reach 28.5 million tons by 2025 (as compared with
Because of its low specific weight, aluminum is very
and higher levels of recycling.
tute in France expects oil to cost $200 per barrel by
gas moved to over $9,000 per ton, after having cost as
16.5 million tons in 2004), whereby China’s share may
popular in the packaging industry — but it’s also in-
little as $5,000 in 2007.
total as much as 40%.
creasingly being used in automotive production, which
Reserves
Resources
in million t
in million t
in million t
Reserves
159.0
25,000
>55,000
157
>346
3.15
67
>1.500
21
>476
1,340.0
160,000
>800,000
119
>597
Copper
14.6
470 >
2,300
32
>158
Nickel
1.4
62
140
44
100
Zinc
9.4
220
1,900
23
202
Tin
0.26
6.1
>11
23
>42
Bauxite
Lead
Duration in years
Resources
Estimated Output of
Key Base Metal Ores 2000 - 2025
Bauxite
Lead
Iron ore
2020
2025
Increase
Annual
136.00
154.23
178.80
191.09
40.5 %
1.4 %
3.10
2.84
2.66
2.57
-17.1 %
-0.8 %
1,070.00
1,289.25
1,449.06
1,528.96
42.9 %
1.4 %
Copper
13.20
17.70
24.1
28.4
113.3 %
3.1 %
Nickel
1.27
1.88
2.44
2.75
116.2 %
3.1 %
Zinc
8.79
10.60
12.64
13.73
56.2 %
1.8 %
Tin
0.25
0.26
0.27
0.28
11.3 %
0.4 %
by the BGR, nearly 28% of the total global steel demand
of around 1.1 billion tons in 2004 was accounted for by
China (302 million tons), followed by the U.S. (11.4%)
and Japan (7.4%). Between now and 2025, China will
use more than 1.4 billion tons of crude steel per year, or
more than four times its current consumption. Calculations made by the U.S. Geological Survey in 2006 estimate that the known iron reserves of 160 billion tons
levels .
Prices for metal raw materials have risen even more
The high demand for copper is primarily a result of
now accounts for 26% of global aluminum consump-
dramatically than those for oil and gas. Consider copper,
rapid economic growth in Asia. China’s demand for cop-
tion. The material is also used in buildings and high-
which is obtained mostly from iron sulfide ores, in
per is growing at a double-digit pace, for example —
voltage lines. According to the World Bank, global de-
which it occurs alongside metals such as zinc, silver, and
and the price of copper has more than quadrupled over
mand for primary aluminum was around 32 million tons
nickel. Copper is used mainly in electrical cables be-
the last five years, from $2,000 per ton in 2003 to
in 2005.
cause of its good conductivity, and can also be found in
$8,940 per ton in July 2008. Analysts at Commerzbank
The primary aluminum requirement of China alone
pipes for home construction and machines. With 3.67
Corporates & Markets believe the supply situation will
more than doubled between 2001 and 2005, making it
million tons, China accounted for just under 22% of
normalize, however, and that prices will once again fall
the top consumer, ahead of the U.S. Global demand for
global copper consumption in 2005, followed by the
below $8,000 per ton. One reason for this is a $5 billion
aluminum is expected to rise to 47 million tons per year
U.S. (13.3%) and Japan (7.1%). According to market ex-
investment that will more than triple Chile’s copper min-
by 2025.
Global Petroleum Reserves in
Billions of Barrels
99.0
UAE
97.6
Venezuela
80.0
Russia
Nigeria
Kazakhstan
60.0
41.5
36.2
30.0
In addition to conventional reserves, there
are global reserves equivalent to 1.8 trillion
barrels in the form of oil sand. The biggest
deposits are to be found in Canada and
Venezuela, each of which hold around onethird of total global reserves.
27.6
Qatar
115.0
Kuwait
47.5
Iran
136.3
Iraq
Libya
Russia
179.2
Iran
Sylvia Trage
Global Natural Gas Reserves in
Trillions of Cubic Meters
259.8
Canada
2010
mechanical engineering industries. According to a study
could last more than 120 years at current consumption
Saudi Arabia
2000
next biggest steel consumers were the automotive and
25.8
Saudi Arabia
6.8
UAE
6.1
U.S.
5.8
Nigeria
5.1
Algeria
4.6
Venezuela
4.3
Source: Oil & Gas Journal, January 1, 2007
Extraction
* in millions of barrels per day
Source: Oil & Gas Journal, January 1, 2007
Consumption Levels and Reserves of
Key Base Metal Ores
Source: International Energy Agency (2008)
It is important to differentiate between reserves and
Saudi Arabia
Iron ore
Liquid Solution. In addition to growing interest in deep sea pipelines, the world is also turning to the transport of liquefied natural gas, or
LNG. The production of liquefied natural gas is
worthwhile only when a gas field is far from
customers, or when the only alternative is a
pipeline across impassable or dangerous terrain. To liquefy natural gas, it must first be
cooled to a very low temperature (see Pictures
of the Future, Spring 2008, p.46). This process
requires powerful compressors, as do the huge
gas tanks being built around the world to store
supplies. “Combined with the unique range of
products supplied by Siemens, these developments certainly do open up outstanding
market opportunities for the company,” says
Wappler — and increasing interest in the
Pipeline Demo Center.
Jeanne Rubner
Balancing Demand and Production
R
Source: USGS (2006), USGS (2005), BGR (2005) — 2004 figures
on the grounds of a former blast furnace (see
Pictures of the Future, Spring 2008, p. 46). Six
pipelines, including compressors and drives,
can be operated simultaneously at full capacity
at this center, which is the only one of its kind
in Europe. “That’s important, because the operators of pipeline systems want to be sure that
the lines work flawlessly,” says Wappler.
As a rule, testing occurs at night, so that the
Duisburg public utility company can supply
enough electricity and gas. The most powerful
compressors, which are needed for liquefied
natural gas, each require up to 70 megawatts
of power, whereas pipeline compressors operate in the range of 25 to 30 megawatts.
Because of the need to conserve energy,
compression technologies are becoming increasingly important. In the past, natural gas
was flared off at oil fields. But today it is considered the raw material of the future, and every
effort is made to recover it. In addition, natural
gas produces less carbon dioxide when burned,
as compared with petroleum, which is a plus in
view of the struggle against climate change.
“The trend is therefore toward gas,” says Wappler. As a consequence, high-performance
compressors are needed to compress gas approximately every 150 to 200 kilometers.
When it comes to deep water operations,
the number of compressors must be minimized. Thus, in the case of the planned 1,220kilometer Baltic Sea pipeline, there will be only
one compressor station; but it will be rated at
70 to 80 megawatts.
Siemens’ experience in Belgium’s Zeebrugge harbor makes it an ideal partner for
such projects. Zeebrugge is the European terminus for North Sea gas that flows in the summer from Great Britain to the continent. The
harbor’s compressors rely on Siemens Technology.
| Facts and Forecasts
Source: Mineral resource trends, RWI, ISI, BGR, 2005
Raw Materials
Nearly 36% of global natural gas
reserves are located in Russia.
(as of January 2007)
Pictures of the Future | Fall 2008
29