TPT May 2009

The bookshelf Getting a firmer grip on metals costs in huge capital projects A ‘white paper’ available to registrants of the blog MetalMiner has a long title: ‘Cost cutting ideas – reducing steel and related metal costs in major capital projects for oil & gas and petrochemical turnarounds’ . But it is succinct and persuasive. For anyone open to the thesis that careful monitoring of costs can benefit both buyers and sellers of metals on a large scale, it will reward the investment in reading time. Registration is free at www.agmetalminer.com. The authors are Lisa Reisman and Stuart Burns, co-founders of Aptium Global Inc, a Chicago-based consultancy in metals sourcing and project management. Both have a background in trading metal products around the world. In summary, they assert that companies generate greater cost savings when they break out fabrication costs from the underlying metal costs and track both sets of data over time. Multiple strategies are recommended, and examples cited. The last section, ‘Conclusions and savings,’ is attention-getting, although the authors acknowledge that generalizations can be misleading. Savings will vary across product categories (pipes, heat exchangers, pumps) and volumes. The urgency of a particular requirement can also impact savings. Nevertheless, write Ms Reisman and Mr Burns, “We have seen savings,” as follows: • Steel tube 4-6 per cent • Stainless tube 15-18 per cent (before surcharges) • Flat rolled steel 9-11 per cent • Flat rolled stainless 10-12 per cent (before surcharges) Depending on the metal involved, “more-processed and further- worked products typically,” yield similar results: Oil and gas Massachusetts, with 7,900 miles of antiquated gas pipes in the ground, is calling for replacement Statistically, explosions from gas leaks are very rare in the United States, where roughly 1.1 million miles of natural gas mains crisscross the country. According to federal data cited by Boston Globe staffer Keith O’Brien, such incidents are even less common in Massachusetts: 20 events and six deaths between 1998 and 2008. (Nationwide, over the past two decades, there were fewer than 90 incidents per year, and just over 15 fatalities annually). But several recent explosions have prompted state officials to review the 12 incidents recorded in Massachusetts since 2004. Mr O’Brien supplies a context for the obvious questions: Is the state’s underground network of pipes as safe as it should be? Are these terrifying events just part of the cost of a gas distribution system? Could utilities and state regulators be doing more? • Castings savings 4-11 per cent • Fabrication savings 7-17 per cent

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Metals Technologies

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