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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (6408)	2/1/2002 5:15:44 PM
From: jim_p	Respond to of 206093

Interesting comments about market growth for HC back in 1999. Market Growth There are approximately 15 million hp worth of skid-mounted compressor packages in the U.S. under 4,500 hp - that does not include pipelines. Add the 45 million hp in the pipeline market and it means that about 60 million hp is needed to move 21.5 Tcf (current gas consumption in the U.S.) A 30 Tcf market will boost the need for compression to about 90 million hp. Compression horsepower is growing approximately 9 percent annually - at least three times faster than natural gas demand growth. "Even if gas demand stayed flat, your horsepower continues to increase because your reservoir pressures are going down and the need for more compression goes up 6-8 percent a year. On the delivery side, your pipeline pressures are going up across the country, and your capacity is going up," McGhan said. Where they now typically see 800-1,000 psi pressure on the pipeline side, those figures have inched up to 1,200 psi without a problem, he said. Now, a number of pipelines, including Alliance, are going to 1,450 psi, which requires additional compression. Canadian officials have even talked of bringing lines in from western Canada at 1,800 psi or even higher. McGhan and Erwin expect to boost compression assets from 1.3 million hp to as high as 5 million hp in the next three to five years. Compression companies themselves own about 4 million hp. Of the 15 million hp out in the market, 11 million hp conceivably might be for sale. That doesn’t include the 45 million hp owned by the pipeline—another viable market to pursue—they said. In recent years, the compression business has consolidated dramatically to where there are about nine significant players, and Hanover intends to continue to lead that trend, they said. In terms of a 60 million hp market, increasing their share to 5 million is not that significant, they said. "What we probably have going against us is that Hanover is a relatively young company," McGhan acknowledged. "We don’t talk to a lot of the big engineering firms. They may not know about us. We’re pretty selective with whom we do business with. As we continue to grow our rental fleet from 3-5 million hp, can we go from 200,000 hp to 400,000 hp in new package sales every year? We’ve increased our floor capacity by over 500,000 square feet over the last two years, bringing the total shop and resources to over 1 million square feet." undergroundinfo.com Jim