Current GE Stock Info

Avoiding Downtime During Winter Freeze is the Goal

Access to infrastructure is a vital asset for oil and gas producers. Despite infrastructure investments as high as $40 billion per year, production from E&Ps continue to outpace the takeaway capacity in booming areas like the Marcellus and the Permian. Spot prices in Midland, Texas are trading at a $17 discount to Brent and are provoking questions on if the market is oversupplied.

GE (ticker: GE) and Accenture (ticker: ACN) are doing their part to maximize pipeline efficiency. The two companies announced the launch of the Intelligent Pipeline Solution in a joint release on September 8, 2014. The Solution is designed “to help customers make better, faster decisions on their pipeline operations to improve safety and prevent costly downtime,” according to the release.

The new technology will debut on 15,000 miles of pipelines controlled by Columbia Pipeline Group in the Marcellus/Utica region. Shawn Patterson, President of Operations and Project Delivery for Columbia Pipeline Group, said, “GE’s industrial Internet software platform and extensive pipeline equipment and inspection capabilities combined with Accenture’s strong industry knowledge, digital capabilities and experience with business process and systems integration made them the clear choice for CPG.”

Last Year’s Frozen Pipelines Not Forgotten

The Marcellus/Utica region was ravaged by the cold last winter. Production slowed due to extreme weather conditions and pipelines froze over, leading to record inventory withdrawals and spot prices shooting past $120/MMbtu. The country could be looking at more of the same in the upcoming winter season. According to Weather Services International, “Early indications suggest that a colder winter is favored across much of the central and eastern US.” The Central United States, in particular, is expected to have lower than average temperatures through at least November.

Because of the extreme freeze conditions, downtime and lowered utilization rates were apparent in the 2013-14 season. The Oil & Gas Journal reported utilization rates in the Midwest dropped to 87%, down from its normal rate of 94%. East Coast utilization rates, which are usually near full capacity, dropped as low as 70%. According to GE’s press release, its new pipeline technology is designed to “help operators prioritize where valuable resources are needed most and respond to potential events with a higher level of confidence.”

Even though new pipelines are being added to the market, GE reports there is a near inifinite amount of room for the use of its new technology. There are nearly 2 million miles of pipeline worldwide and the majority of infrastructure in the United States has been in place for 20 years.

GE Making a Mark in Oil & Gas Technologies

The company has grown its oil and gas revenue by 75% since 2009, according to Reuters. The $17 billion segment was the fastest growing conglomerate in the United States in that time frame. GE’s main focus is a technological perspective, including the development of equipment and connection systems. Its recent work in the natural gas field has made it one of the industry’s pioneers of gas-related technology. Successes to date include a locomotive fueled by LNG and a “CNG in a box” that can power up to 11 wells on site in the country’s largest oil basins. Oil and Gas 360® covered new deepwater blowout preventer technology and related equipment that GE launched during the summer.

GE will host an oil and gas investor meeting on Wednesday, September 10, 2014, in New York City.

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