The Importance of Asset Integrity Management in Energy 

The management and the keeping of the integrity of assets in the asset-intensive energy industry are key to ensuring continued safe and reliable operations to deliver energy to customers.

Asset integrity management has always been crucial in the energy sector. It is now gaining even higher prominence amid volatile oil and gas prices, heightened geopolitical tensions, and Russia’s invasion of Ukraine which sparked a rush in every country to bolster the security of energy supply.

Increased risks of supply disruptions have made asset integrity management all the more important for energy companies to keep their operations safe and reliable and meet demand for oil, gas, or renewable energy.

Plan for the Unplanned

Companies in the energy resources, power, and chemicals sectors need to continue, “for yet another year, to plan for the unplanned,” Deloitte said in a series of analyses of the energy, resources, and industrials industry outlooks for 2023. Supply chain delays are affecting renewable energy projects, while volatile oil and gas prices are set to affect oil and gas operations, chemical feedstock costs, construction projects, and manufacturing inputs in 2023 just as in 2022.

“The high energy prices of the past 18 months have cast a new light on the balance to be struck among energy security, energy access and energy sustainability,” Deloitte said.

Economic uncertainty in many regions, as well as challenges in attracting and retaining talent, continue to be constraints, the consultancy noted.

Yet, the major dislocation in all energy markets in 2022 has fostered innovation in 2023, according to Deloitte.

“Increased reliance on digital technologies for up to the minute market information as well as enhanced connectivity with a company’s suppliers and customers may create agility and resilience,” it said.

In the oil and gas industry specifically, companies and stakeholders need to address the trilemma of energy security, supply diversification, and low-carbon transition, Deloitte said in its 2023 oil and gas industry outlook.

This year, and in the coming years, flexible models, transforming asset operations, and portfolio shifts will be key areas for energy companies alongside technical innovation and adoption, McKinsey & Company said in a report in December.

“In the traditional business, companies are under pressure to provide affordable, reliable, secure, and cleaner energy to global markets in the near term. In addition, they recognise that the operating model for assets of the future will have to fundamentally transform to produce competitive hydrocarbons with lower carbon intensity,” McKinsey’s partners Ignacio Fantaguzzi, Christopher Handscomb, and Jesper Ludolph wrote.

Leading companies have started the journey toward the asset of the future by radically simplifying to align standards, processes, maintenance builds, and other crucial elements, with operating strategy tailored to the maturity of the asset, they added.

Asset Management Markets Set To Grow

Preparing for the future of the energy industry and responding to today’s challenges in energy markets and supply requires even greater emphasis on asset integrity management and inspection, repair, and maintenance services. These are expected to jump in the coming years, due to ageing infrastructure, increased adoption of digitalisation, and a growing market for services in the renewable energy, utility, and grid sectors as the share of clean energy sources in the global energy mix continues to rise.

Asset integrity management is the process of overseeing an asset such as an oil rig, a pipeline, a refinery, or a power plant, to make sure that it maintains the ability to fulfil its function successfully, safely, and efficiently.

The global market of asset integrity management is expected to reach $28.3 billion by 2028, rising at a compound annual growth rate (CAGR) of 5.1 per cent between 2022 and 2028, a study by ReportLinker showed last year.

The oil and gas segment accounted for the largest share of revenue in the market in 2021 and rising oil and gas demand is set to additionally help the asset integrity management market grow, according to the report.

Another segment of the asset management market, the Inspection, Repair, and Maintenance market, is set to see its value rise to around $72.46 billion by 2029, up from $42.66 billion in 2022, according to Fortune Business Insights. The market growth between 2021 and 2029 is expected at 7.9 per cent annually, thanks to strong demand for effective protection systems and rising use of digital technologies. Rising energy demand globally and increased applications of Inspection, Repair, and Maintenance across several energy sectors, including installation of renewable capacity, will be additional drivers of growth.

Digitalisation Driving Asset Management Market Growth

The higher use of digital technologies – including predictive analytics and predictive maintenance, machine learning, the Internet of Things (IoT), and robotics – will be key drivers of the asset management market going forward.

Technology has played a major role in the higher sales in the global computerised maintenance management system (CMMS) market, Future Market Insights said in a recent report. IoT devices are now everywhere where assets need to be monitored, including devices monitoring temperature, humidity, and collecting other data from the environment.

Rising adoption of CMMS software in the energy and utilities sectors has contributed to the market growth, Future Market Insights said. Revenues in the global CMMS market are expected to rise at an annual rate of 9.1 per cent between 2023 and 2033. This would be higher than the annual market growth of 7 per cent between 2018 and 2022, the report showed.

Predictive maintenance in North America is set to be an $8.9 billion market by 2028, growing from $2.08 billion in 2022, due to increased focus on energy inspections across various industries, ResearchAndMarkets said in a report in early February.

“Energy and utility companies face significant challenges, including environmental concerns, rising operating costs, increasing consumer expectations, and changing regulatory guidelines. These challenges drive the adoption of different analytical tools,” the report said.

“This is due to the growing need for better insight into usage and performance patterns to make better decisions. Power line inspection in the energy sector is complex, primarily due to remote locations, hard-to-reach structures, and high labor costs,” ResearchAndMarkets says.

The rising relevance of Industry 4.0 and growing industrialisation in North America are the market drivers and opportunities in predictive maintenance, while high installation costs could be market restraints, according to the report. The future trend in predictive maintenance is automation through incorporation of Artificial Intelligence (AI) and machine learning (ML), the report notes.

Finally, unnecessary high numbers of procedures and processes and a lack of equipment reliability are top concerns for maintenance managers in the oil and gas industry, a study by asset integrity management specialist Add Energy showed last year.

A total of 58 per cent of surveyed maintenance managers said that the growing volume of processes and procedures is more challenging now than it was five years ago. Another 40 per cent of maintenance managers stated that reliability of equipment is the biggest challenge they face today. Getting people to use computerised maintenance management systems was cited by managers in the survey as the second biggest challenge, with 37 per cent of respondents voicing their concerns over this.

Still, the survey found that more than 70 per cent of maintenance managers believe that the majority of their work is planned. Around 50 per cent of maintenance managers rate both their team and maintenance strategy as highly effective.

“The survey data clearly shows that there has been significant pressure on maintenance budgets,” said Peter Adam, EVP of Asset and Integrity Management at Add Energy.

“Upgrading and modifying systems and equipment are unsurprisingly high on the list as companies are being asked to sweat their assets harder and longer, requiring replacement parts that may not be in production anymore, along with increasing degradation and obsolescence.”

Read the latest issue of the OGV Energy magazine HERE