Nov 25, 2015

Containers and cabins with conviction

John O'Hanlon
5 min
Modex Energy was first incorporated in 2011, in Hong Kong. Founded in China by Pe...

Modex Energy was first incorporated in 2011, in Hong Kong. Founded in China by Per Ingar Amlie, Paal Wilsgaard and Tore Ertzaas, it was perceived that there was growing demand in the offshore oil and gas market, for a dedicated manufacturer of service equipment. The market was beginning to expand after the financial crisis of 2008, and the founders were not only thoroughly versed in the varying technical requirements of international oil service, exploration and production companies but also understood the equally important aspect of capital raising. On these two pillars Modex has been able to expand at a breathtaking rate and today has a presence in USA, Norway, Singapore, Indonesia, Brunei, Malaysia, Australia, UAE and Brazil, and operations in Nigeria, Ghana and Saudi Arabia as well.

Amlie, who is now based at Singapore and overseeing the company’s operations in the Asia/Pacific region, believes that a key differentiator for Modex Energy is that it is the only truly integrated Cargo Carrying Unit (CCU) manufacturer and rental provider in the world. Unlike other CCU providers who subcontract their production, Modex owns and operates the most advanced CCU and cabin manufacturing facility in the world, capable of producing 5,400 CCUs and 120 cabin units per year.

CCUs and cabins come in a variety of forms. They are certified by DNV (Det Norske Veritas) following design review and testing and inspection of the production process as well as the finished product. The containers are issued with a “Type Approval Certificate,” which enables the manufacturer to produce the same type over and again. The China factories manufacture in accordance with requirements of ISO 9001:2008 and ISO 14001:2004 Modex is also registered with the Scandinavian Achilles JQS, which is used widely in the North Sea oilfields.

• Related content: Schneider Electric: Turning today’s risk into tomorrow’s opportunity

The company started to grow organically in an emerging market, using a combination of debt and equity to fund acquisition or merger with larger and more established players in mature markets. In 2014 it merged with the Norwegian company Euro Offshore, which is now trading under the Modex name, and earlier in 2015 it also merged with Louisiana-based Gauthiers to create the world’s third-largest offshore container company, with an inventory of 17,000 units, a global presence and comprehensive service offerings from engineering and manufacturing to the sale and leasing of offshore containers and modules. This gave Modex far greater access to the North American oil and gas market, especially operators, contractors and service companies in the Gulf of Mexico, as well as further in-house manufacturing design and production capacity.

This growth curve, though impressive, has not taken the company to quite the position Per Ingar Amlie thinks it should occupy. It has the global number two slot in its sights, though it might take a little longer to challenge the market leader, the UK’s Swire group, he concedes. Nevertheless Modex is keeping ahead of the market in a number of ways. One of these is by responding to cost pressure from the customers in the face of depressed oil prices. “There’s less slack in the logistics operations, and clients are moving towards tracking solutions to identify slack in their operations and remove it. One area we can contribute to cutting costs is by introducing far greater levels of standardisation – currently there are rather a lot of different CCU designs in use, in different parts of the world for example, but there is a lot of scope for rationalising the product. Now, though, global standards are being introduced for equipment. This will reduce the cost of manufacturing and also benefit operations and maintenance whether you rent the equipment or purchase it.”

Falling hydrocarbon prices affect demand but linked to the current low price of steel they do offset manufacturing costs. “I’d say that the oil industry has contracted by up to 40 percent over the last couple of years. I think we have passed through the panic stages where nobody knew when prices would bottom out, and most players are adjusting themselves to an oil price between $50 and $60 a barrel.” Anyway, the fact that Modex has continued and is continuing to expand in this market environment is a great achievement. With strong backing in Europe and Asia, it is in the great position of being able to continue to expand if the right investment opportunities present themselves, he says.

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In common with corporations large and small around the globe, one area of continuing investment for Modex is in its IT infrastructure. “Right across our industry now, everyone is having to look at how they can better control their assets. So if we do not invest we will be left behind – but our strategy is not to keep up but to lead, which is why we are investing in our entire supply chain from procurement, through manufacturing right through to equipment supply, installation and maintenance. There has been too much slack in the offshore market, and we are using IT tools to remove that, and increase utilisation of our equipment, and become more efficient generally.”

Inevitably, since Modex has grown through amalgamation with a number of pre-existing organisation, it has had to confront the issue of using a variety of different IT platforms. To address this Modex has taken radical steps, says Amlie, to turn a problem into an asset. “It has been a chance to pick out which systems were the best for us, phase others out and introduce new platforms, on the principle of taking the best practices from each of the companies and bringing them into the group.”

Looking back on progress to date, Per Amlie stresses that the quality, regulatory compliance and design of the products are only a beginning. The company’s clients gain competitive advantage in a cut-throat market by being able to depend on timely maintenance and repair work, modification and upgrading, and inspection and testing services from Modex. Its service options include lifetime spare part support, ISO-connectors and hook up cables, provisions of personalised support and assistance with logistics. All of these service offerings combine to create a one-stop solution in this segment of the market.

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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