Tuesday, January 09, 2007

Fueling a company's growth: rising oil and gas production leads to expanded business for Kato Engineering While consumers and businesses might be clam

While consumers and businesses might be clamoring about rising oil prices and the subsequent increases in fuel costs, the demand for petroleum and natural gas has helped fuel a massive worldwide increase in oil and gas production. Thus, it goes almost without saying that companies serving this vital energy sector have been enjoying pace-setting sales as a result of exploration and production.

Kato Engineering, with its long history of manufacturing generators for a variety of power generation applications, has seen demand in the oil and gas sector rise steadily over the past year.

"The prices of oil and natural gas directly affect our business," explained Ken Britz, director of sales and marketing for the Mankato, Minn.-based company. "A key market for Kato is oil and gas drilling around the world. The Kato generator is and has been the workhorse of the land rig drilling business. With crude oil at $60/barrel, the market is very active today and will continue into 2007. The applications are such that the market requires a tough product and experience in the business. Also, uptime is key especially with oil and gas prices being at today's levels."

The company estimates that as many as 90% of land rigs are powered by Kato generators. The generators used are typically low voltage (600 V), six-frame machines, which operate at 1200 rpm and range from 902 to 1500 kW. They are most often driven by Caterpillar 3500 series diesel engines. Drilling and production rigs are usually located in remote areas where grid power is not available. Often the environments are demanding, including frigid tundra, burning deserts or damp and salt-laden atmospheres. However, it is generally the heavy electrical loads that most necessitate robust generator designs.

"In general, the power requirements have increased on any given platform or drilling rig," said David Miller, sales engineer. "This has necessitated larger units and/or multiple units. Less space is available and packing more kVA in a package, while maintaining Kato's high quality, has been a key goal."

One product development to evolve out of this increasing demand on the generator is Kato's new 6P6.6-3200 HR, a high density machine capable of 2500 kVA at low power factors with a temperature rise of 176[degrees]F maximum. It is operated at 1200 rpm and designed to be coupled to a Caterpillar 3516B HD diesel engine.

"The 6P6.6-3200 HR exhibits a higher sub transient reactance than a typical machine," Miller said. "This higher reactance is a key element when paralleling multiple units on a rig or platform."

On rig or platform rebuilding projects, the need for more power allows multiple Kato 6P6.6-3200 HR generators to be paralleled, while keeping the instantaneous short circuit current within the existing bus and interrupting device ratings. Because of its high density it will fit on a standard Caterpillar base, resulting in a smaller and lighter package, Miller said.

"New products and product extensions are a continual way of life today," Britz said. "As we grow our business into the larger generator area, products need to meet customer demands regarding cost, reliability and operating efficiency. Thanks to new engineering tools like 3-D and CFD modeling tools, we can design machines to meet our customer's specific needs."

One current project for larger Kato generators involves the Agbami FPSO for Chevron/Texaco, to be located offshore Nigeria. This FPSO is being constructed by Daewoo Shipbuilding & Marine Engineering of Okpo, South Korea. First oil production is targeted for the first quarter of 2008.

The FPSO will be moored in about 4953 ft. water depth and will be designed to handle 250,000 barrels of oil per day and 450 million cu.ft, of gas production per day. It is also designed to store approximately 2.2 million barrels of oil. The Agbami vessel is set to be on location for more than 20 years and located offshore Nigeria about 220 mi. southeast of Lagos.

The vessel topsides will generate 75 MW of power and have living quarters for 100 personnel. The power modules will consist of several gas turbine generators, as well as Kato units including three essential generators--model 6P10.5-3300--rated 2.5 MW, 3300 V, 50 Hz at 1000 rpm and one emergency generator--model 6P7-3400--rated 1.5 MW, 690 V, 50 Hz at 1000 rpm. All four generators will be driven by Caterpillar diesel engines.

Each generator is manufactured to API-546 standards and certified to ABS and BASEEFA. Each generator is also fitted with a top-mounted air-to-air heat exchanger to facilitate a complete seal to withstand the harsh offshore environment. Stringent vibration tests were performed along with a vacuum test on each generator enclosure to meet the required standards of API and Chevron/Texaco. The engine-generator sets are currently being packaged by Mustang Cat in Houston, Texas.

"Today, industrial power generation is active worldwide," Britz said. "This market was slow after the dot-com business collapse in the 2001 timeframe. It picked up momentum in 2004 and remains very active today. Traction products are also very active based on energy needs worldwide