WHITEFISH, MT / May 27th, 2014/ Abakan, Inc. (OTC: ABKI) has positioned itself to quickly become
a top player in the growing $150B global market for advanced metal coatings and
formulations by putting together an impressive portfolio of next-gen tech firms
like MesoCoat, Inc., which is focused on advanced wear and corrosion solutions primarily
for the oil and gas and energy industries; Powdermet, Inc., which manufactures
high-strength light-weight metal composites and advanced nanopowder
manufacturing; and Terves, Inc., which manufactures metal tools and components
that dissolve, disintegrate, swell, change shape, store and release energy to
make oil and gas production safer and more efficient.
The company stands ready to address the mounting public and
private demand for advanced surface engineering, especially in critical
infrastructure markets, with a host of proprietary technologies that directly
offset the staggering (yet underreported) impact of material degradation.
Corrosion Costs Study data from 1998 indicates that the direct costs of
corrosion amounted to a whopping 3.1% of U.S. GDP, but when including indirect
costs estimates climb above $1T for 2013 alone, or 6.2% of GDP.
Concerns Over the Keystone
Critics of Keystone XL, led by the Natural Resources Defense
Council, have raised the alarm over the potential environmental impact of
pipeline failures due to corrosion, and have argued that the product to be
moved through the pipeline has higher than normal corrosion risk due to its
origin in the Alberta tar sands. The argument that higher grit content and
increased acidity in such bitumen, which is diluted with light hydrocarbons to
get it to flow (or dillbit), has been a major point of contention for the
Keystone XL project. This highly
corrosive product is referred to in the industry as "sour" oil and gas.
Clad pipes have proven to be the most economically viable
option for production and transportation of sour oil and gas. Clad pipe is
typically produced by cladding (coating) a low-cost carbon steel pipe with a
thin layer of expensive corrosion-resistant stainless steel or nickel alloys; which
costs a fraction of using a more expensive solid stainless steel or nickel
alloy pipe (8-40 times higher cost).
While cladding carbon steel pipes is cheaper than using
solid alloy pipe, the conventional technologies used to produce clad pipe have
several limitations. Clad pipes manufactured using the CermaClad
technology are easier to inspect, bend, reel, and install unlike the
mechanically lined pipes; as well the process provides a seamless cladding
unlike the roll bonded plate to pipe alternative.
2.6 Million Miles of
Pipelines, with Spills Everyday
The corrosion failure concerns for our continuously
expanding 2.6M-mile network of pipelines are amply characterized by the
numerous incidents (1.6 per day between 2010 and 2013) documented by the
Pipeline and Hazardous Materials Safety Administration (PHMSA). Beyond such
pipeline-related metal corrosion concerns lies the broader, more daunting
problem of corrosion in bridges, power plants, ships, and trains. Clearly, the time for nanocomposite material
science, as well as advanced cladding processes like MesoCoat's high-speed
large-area fusion cladding technology, CermaClad(TM), has come.
The CermaClad process (view
video) is ideal for protecting large-areas of metal subject to considerable
corrosion or wear and the advent of this processing technology allows the
cladding process to keep pace with the line speed of steel mills (15 to 100
times faster than conventional weld/laser cladding). Such a high-speed,
economical fusion cladding process represents a paradigm shift away from
cladding carbon steel pipes with stainless steel or nickel alloys and offers
improved metallurgical/mechanical benefits, as well being completely seamless,
further enchaining the overall safety and workability profile of the pipe. To
put it simply, pipes coated using CermaClad technology should be able to withstand
the assault of corrosive fluids throughout the life of the project, which will
lead to less corrosion related spills and leaks to worry about.
Further enhancing ABKI's competitiveness and
environmental-safe profile is the company's PComP(TM) series of nanocomposite
core, cermet coatings, which are able to extend the life of components by as
much as twenty times while being cheaper and lighter, as well as safer and free
of toxic chemicals.
MesoCoat’s PComP technology is a platform technology that
enables combining different materials that do not usually combine well
together, and by doing that PComP products achieve properties and performance
that are very difficult to achieve. For example, MesoCoat’s PComP coatings are
both hard and tough, a feat considered impossible to achieve since hardness and
toughness are inversely proportional and before PComP’s it was only possible to
get either high hardness or high toughness, but not both.
These unique properties and benefits of PComP coatings have
been verified by several oilfield companies, and Caterpillar (NYSE: CAT)
published a paper that highlights that MesoCoat’s PComP carbide coating
provided 80 times longer life in sliding wear environment. The math behind the
benefits of PComP is very simple, the oilfield components that are coated using
PComP cost anywhere between $10,000 to $200,000, but every single time that you
have to stop production to repair and replace those components due to coating
failure costs millions of dollars per day in downtime costs; so if PComP
coatings can make the components last longer, then they are saving millions of
dollars every year.
Given that International Energy Agency data indicates
roughly 70% of remaining oilfields on the planet contain highly corrosive
components, CermaClad has a very bright future on the global energy stage.
Concerns over the TransCanada Corp. (NYSE: TRP) Keystone XL pipeline typify the
situation and throw a much-needed spotlight on vastly overlooked preventative
technologies like those offered by ABKI, which can substantially address the
Worldwide Issues with
The concerns are valid, as there has recently been an issue in
Kazakhstan at the massive Kashagan offshore oilfield. Even though this is the biggest oilfield find
in 35 years, with as much as 13B bbls in reserves estimated, production may
fail to restart at all this year due to prevailing concerns over microcracks in
the 112 mile pipeline network of this $50B project.
Kazakh authorities are livid as outputs have been further
delayed pending arduous/complicated inspection of the network. With the North
Caspian Operating Company consortium, headed up by sector majors like Exxon
Mobil Corp. (NYSE: XOM), Royal Dutch Shell (NYSE: RDS.A), Total (NYSE: TOT),
and Eni (NYSE: ENI), as well as Kazakhstan's state-run oil and gas firm
KazMunaiGas, already being sued for some $737M due to ecological damage, there
are serious questions now about who will pay for the complex inspection and
possible overhauls. As the old adage goes: an ounce of prevention is worth a
pound of cure and with Abakan’s CermaClad pipe coating technology oil and gas
companies can exponentially minimize the risk of pipeline leaks and failures.
There is huge demand for thick-walled clad pipes in the Gulf
of Mexico and Brazil, and a massive requirement for large-diameter clad pipes
in the Asia-Pacific and MENA regions – the mechanically lined pipe and roll
bonded plate to pipe alternatives are not ideal for thick-walled and
large-diameter clad pipes due to several quality and mechanical limitations.
Given the huge need for clad pipes in Brazil, it comes as no surprise that
South American oil and gas major, Petrobras S.A (NYSE: PBR) has invested in
development and qualification of Abakan’s CermaClad clad pipe product.
Abakan Growing to
To meet the growing demand for high-quality pipe coatings
that can withstand the assault of corrosive oil and gas; Abakan intends to
build an 8-line corrosion-resistant clad pipe manufacturing facility in Batam,
Indonesia. The high productivity of the CermaClad pipe cladding technology will
enable Abakan to build the facility at a miniscule investment compared to its
competition; a $36M investment in the 8-line clad pipe manufacturing facility
would lead to more than $250M in annual revenues, a very healthy ROI.
Abakan is currently in talks with a number of oil and gas
companies, which are evaluating the capacity and availability of clad pipes for
their projects. Several large projects have been delayed by major oil and gas
players due to lack of quality corrosion-resistant clad pipes, which is a
testament to the growing requirement for the product.
The market for clad pipe is growing, the supply is limited,
and Abakan’s CermaClad has both the promise and the potential to make its mark
and dominate the multi-billion dollar clad pipe market.
To Learn More on Abakan,
please visit their website at Abakaninc.com.
for the historical information presented herein, matters discussed in this
release contain forward-looking statements that are subject to certain risks
and uncertainties that could cause actual results to differ materially from any
future results, performance or achievements expressed or implied by such
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SOURCE: Emerging Growth LLC
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