North American Oil & Gas Market: The Outlook for Satcoms in 2012 (Part 2)

[Satellite News 12-14-11] In part two of this 2012 oil and gas industry satcom overview, Satellite News sat down with satellite executives in the enterprise sector to discuss how advances in SCADA technology and available services will impact the interaction that energy companies have with their communications providers. The executives also outline their projections for satellite growth in the coming year.

 

 

While outlining different trends in the energy industry, Greg Quiggle, vice president of product management for iDirect, pointed out the increasing demand for greater bandwidth in pipeline applications. “We see increased momentum in SCADA-Plus applications. SCADA-Plus signifies something beyond simple connectivity for an RTU [remote terminal unit] or PLC [programmable logic unit].”

   Energy companies are taking the next step and increasing the amount of bandwidth available at RTU locations, according to Quiggle.  “A pipeline may want to bring back a video stream when an alarm is triggered, or they may want to have voice and email support when a field technician is on site. Existing communication architectures simply don’t fit a pipeline’s needs anymore. L-band solutions have been used traditionally but they don’t provide the bandwidth that is required and their business model is too expensive to send large amounts of data.”

   Early next year, iDirect will begin to preview three upcoming key changes to their product offerings to support SCADA-Plus applications. The most notable is an outdoor VSAT terminal called the Evolution X1. The electronics, which are housed in an IP67 weatherproof enclosure, feature an extended temperature specification to eliminate the need for additional environmental protection. The Evolution X1 also features solar-friendly DC power options and an intelligent power management system.

   Quiggle said iDirect will launch a new hub line card that can support up to 16 128 kilosymbol-per-second channels to lower the cost for service providers entering the SCADA market. iDirect also will introduce a new Group QoS release feature which minimizes the amount of satellite bandwidth for large scale networks. “Our goal was to get the monthly pricing for an iDirect solution to be extremely competitive with 3G/4G and L-band offerings. If you can get to this price point, you can even go after SCADA applications in urban environments.”

   Romantis President and CEO Vagan Shakhgildian said his company identified several important trends in the oil and gas industry that fueled their efforts in developing new products. The Berlin-based satellite bandwidth and networking equipment provider is working to create quite a stir in the market with their new Universal Hardware Platform, a satellite router that can be configured as a TDMA hub, TDMA remote, mesh VSAT, or SCPC modem.

   “The SCADA market is changing significantly and there is a growing demand for high value, low cost solutions to counter 4G/LTE solutions from cellular carriers,” said Shakhgildian. “Bandwidth demand is going up but it isn’t always predictable.  A technician may only visit a remote site once a year.  Traditional VSAT systems, which utilize Slotted Aloha for capacity requests or for the actual data transmission, don’t have the flexibility to efficiently deliver a mix of high and low throughput applications.”

Romantis already has sold approximately 60 networks around the globe and has high hopes for the North American satcom market, opening up a new office in Montréal. Shakhgildian believes the use of video conferencing on offshore rigs will continue to increase, as its use allows a greater degree of collaboration between teams on land and offshore.

   “Another major trend we are seeing in offshore drilling is above-deck integration of equipment to reduce complexity, cost, and space,” said Shakhgildian. “Traditionally, offshore satellite systems are broken down into above-deck and below-deck subsystems.  Below deck equipment requires rack space and cabling must be run between the above-deck and below-deck systems; both add a lot of expense.  Customers are now requesting solutions with all equipment housed inside the radome. This completely eliminates the need for below-deck systems.”

   Iridium Executive Vice President of Global Distribution Channels Greg Ewert said his company is focusing on several key drivers in the market’s M2M sector, which represents a critical sub-vertical for energy companies.

   “Lone worker safety and personnel tracking programs have taken on increased importance within energy companies. Canada was one of the first to put legislation in place and other countries followed suit. Personal tracking devices are now becoming part of the standard equipment kit that everyone receives when they work remotely,” said Ewert. “Telematics has continued to grow at a rapid pace and M2M is now the fastest growing sub-set of Iridium’s subscriber base. Major firms, like Schlumberger, Halliburton, and Baker Hughes, now have telematics programs and they allow companies to monitor equipment as well as driver performance”

   The outlook for satcoms in the distribution side of the oil and gas market is currently “wait and see,” according to NSR Analyst Brad Grady. “The Keystone Project has yet to ratified and it won’t likely get approval until 2013. Other than that, there aren’t any really big projects. VSATs are replacing low bit/second terminals due to demand for higher bandwidth applications in SCADA applications. More and more, we are seeing SCADA sites being provisioned with enterprise-capable VSAT systems.”

   Grady said the story is much more complex when it comes to the outlook for satcoms in offshore and land drilling markets, as an epic struggle currently exists between satellite and wireless. “As wireless coverage increases throughout the shale plays, this competition will increase. Drillers want fast connections with low latency. Users expect the same on-line experience they get in their living rooms. In the long run, we see wireless ultimately winning over the land drilling market.”

   When queried about the expected impact of high throughput satellites, Harris CapRock President of Energy Solutions Keith Johnson said his company is actively engaged with every satellite operator getting a better understanding of what a potential relationship would look like. “No definitive decisions have been made yet. We will take our time as this will set our strategy for the next three to five years,” he said. “Ka-band satellites will definitely have an impact on the market but the impact may not necessarily be significant or large.    Service providers will be able to deliver higher throughputs at the same cost as Ku-band solutions, which is good, however, the oil and gas market has traditionally been hesitant to adopt new technologies. A good example is extensive use of C-band by oil companies. Only recently have they begun to use large amounts of Ku-band. It will take a while for Ka-band to capture a large amount of market share in the energy market.”