The markets for oil and gas development in the US and Canada are going through significant change right now, leading to a multitude of surplus processing equipment on the global market. Wade Elofson, of Powered Australia, has taken note of these market changes and has established a product import model that has the potential to save developers in the Australian market millions of dollars.
Investment in Canada’s upstream oil and gas industry has declined consistently from 2014 through to 2018, and a number of explorers and developers are shutting down their Canadian operations. As a result, they have a considerable inventory of used equipment, such as natural gas compressors, that they’re keen to re-home.
Meanwhile, in the US, the size of the market is so large that developers often end up over-ordering on their equipment needs – in this case, resulting in surplus equipment available to the market.
Recognising the inherent opportunity in this situation, Wade Elofson, Founder and Managing Director of Powered Australia, has partnered with Raj Singh, CEO of Fuelled, a Canadian based business focused on selling surplus oil and gas equipment, to bring some of this surplus and excess equipment to Australia.
The ultimate end goal of this partnership is threefold, according to Mr Elofson. Firstly, Australian project developers gain access to equipment such as compressors and process skids at a fraction of the original cost.
Secondly, developers are able to source equipment for their projects quickly and efficiently – where you might wait 12 months between ordering a new compressor package with unique specifications and delivery, when you order through Powered and Fuelled, the equipment is available and delivered to Australian meeting local within a few months.
Thirdly, Powered is able to adapt the equipment to ensure it is Australian-compliant and ready to go as soon as it arrives on site – in fact, they guarantee the equipment they important meets Australian standards and specifications.
According to Mr Elofson, developers looking to use this equipment sourcing model can purchase equipment for around 30 per cent of the original purchase price – and when the original purchase price is in the millions of dollars, the savings are incredibly significant. In fact, they can be the difference between a project getting off the ground or not.
“In Australia right now, whether a project goes ahead or not is such a marginal decision. Anything that can help lower the cost of production needs to be looked at; and if it’s not being looked at, that’s being irresponsible.
“We’re offering equipment with Caterpillar engines, Walkinshaw engines, Ariel compressors – it’s all the names you already know and trust. In some cases, this equipment hasn’t even been used before.
“In the North America, the size of the market is so enormous, that developers are regularly putting orders in for equipment that ends up being surplus to their requirements. And when this happens, these developers know they can work with Fuelled in the US and Canada and Powered here in Australia to find their surplus equipment a new home where it will be put to very good use.”
According to Mr Elofson, in North America, there’s always been a pretty significant used and surplus equipment market for equipment in the oil and gas industry.
“In Canada, in particular, it’s all about cost savings. It’s never been looked down upon to buy a surplus piece of equipment, it’s just the way business is done.”
In Australia, it’s been a slightly different story, particularly in recent years. With the coal seam gas and LNG markets booming, the focus was more on supplying as much highly specified equipment as possible.
Now, the market has changed – we’re not in boom time anymore, we’re in an operations phase of the development cycle. And with the Queensland LNG contracts not being as profitable as they once were, cost-cutting is firmly on the agenda for developers in Australia.
And one of the biggest costs for oil and gas projects is equipment sales – compressors and process equipment have always made a significant dent on the bottom line for any project. When cost savings can be made in sourcing this equipment, it goes without saying that it’s going to have a big impact on profitability.
Fuelled has developed an easy to navigate website, as well as an app, so that oil and gas project developers can quickly and easily review the inventory of equipment the company currently has available.
Users can search by equipment type, condition and location, along with a range of other categories, to try and source the right piece of equipment for their project.
When Australian developers find the piece of equipment they’re after, they just get in touch with Mr Elofson and the team from Powered, who can work through all of the steps required to bring the particular piece of equipment to site.
“The unique benefit we’re able to offer to Australian E&Ps through our partnership with Fuelled is access to the biggest fleet of compressors and process skids in the world,” said Mr Elofson.
“Through the website, our local energy companies get complete visibility of where the equipment is, and what it costs. There’s videos, there’s pictures, there’s everything you need to show you exactly what each piece of equipment is.
“When the customers are ready, we organise the sale of the equipment and the delivery to site, so the process is as simple as possible. There are also rental options as well – it’s all about helping developers in Australia get gas to market as quickly as possible.”
What Powered and Fuelled are offering through this partnership is not just access to high quality equipment at an affordable price; but they are also offering energy explorers in the Australian market a fast and efficient way to get gas to market, through well-priced equipment that can be delivered to site within months.
Which is exactly what’s needed in a market where gas is in short supply, but increased demand.
To review the full range of equipment available through the Fuelled and Powered partnership, head to https://fuelled.com/.
For more information about how Powered can help you bring this equipment to the Australian market, contact Wade Elofson on [email protected] or on 0474 128 517.
This partner content is provided by Powered. For more information visit http://poweredaus.com.au/ .