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Valve Techbook 2017

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Page 14 of 35 | September 2017 | 13 VALVE TECHBOOK: MIDSTREAM next to it, but the valve itself remains as necessary as always. Midstream's outsized role Bill Sandler, president of the Washington, D.C.- based Valve Manufacturers Association of America (VMA), said the oil and gas industry represents an significant share of the valve industry's business and—within the oil and gas sector—the midstream represents an outsized chunk of that business as it responds to customers at both ends of the value chain. "Last year was not a good year in general for the valve industry, the first down year after five or six up years," Sandler added. Thanks to the oil and gas price downturn, "VMA members have had some tough times. We're slowly recovering. We're seeing upward movement in 2017, as oil prices have come back up somewhat, so we're cautiously optimistic." Seaport Global Securities said in a recent report to investors that is sees a stronger 2017 for its flow control and engineering and construction segments. Both sectors underperformed the broader stock market in the first half "but we look forward to optimistic second-half commentary that signals a continuation of improving trends along with sea- sonally strong cash flows, which enable the group to grow into its valuation and re-engage investor interest, in our view." Six energy-related industries counted together represent just over 50% of total U.S. valve demand in a typical year among 16 industries VMA moni- tors, ranging from energy to wastewater to HVAC (heating, ventilation and air conditioning). MRC Global echoed Sandler's view in a corporate assessment of 2017 business trends. But it noted North America is an exception—in particular because of a comparatively busy midstream in the U.S., Can- ada and Mexico. "In North America, rig counts are increas- ing, midstream infrastructure projects are mov- ing forward and downstream refining and chemical activity continues to be solid," the MRC report said. 'Steady demand' The firm's InSight publication said in a recent arti- cle: "The demand for valves and actuation products in much of the midstream, pipeline and gas utility markets saw little to no decline over the last two years and, in some cases, increased as a result of numer- ous major infrastructure projects that continued to move forward. Ongoing and newly approved pipeline activity, both for new projects and mandated integ- rity work, continues to provide steady demand for valves and actuators going into these applications. "We expect this trend will continue over the next few years," the story added. "As a result, we have increased our inventory position on pipeline ball valves up to 42 inches, slab and expanding gate valves to 24 inches, as well as double-block and bleed-plug valves used in most terminals. The mid- stream gathering market has shown positive signs of improvement in line with the uptick in the upstream market, and MRC Global is well-positioned to meet the increased demand." Automation continues That automation trend that put a phone in the old pipeliner's hand continues to be a major issue, Sandler said, as valve manufacturers respond to customers' needs to increase efficiency and cut costs. "There seems to be a trend toward more sophis- ticated valves that are controlled from somewhere else, much more automation than we've seen in the past, the ability to fix a problem without going out in the field," he said. New valve designs may focus more on electronics that control actuator assemblies than on seals or metal alloys. The trend is likely to continue as the IoT grows in importance. The bustling Marcellus Shale has emerged as a major valve market as the midstream plumbs Appalachia, linking what may emerge as the world's largest gas field with major North American markets. (Photo courtesy of MRC Global Inc.)

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