Weir Group, Rolls Royce Power Systems in fracking venture
05 May 2015
Scottish engineering firm Weir Group has joined hands with Rolls-Royce Power Systems (RRPS) company MTU in a new joint-venture to produce a power system to make hydraulic fracturing, or fracking, more efficient.
While Weir is a manufacturer of hydraulic fracturing pumps, MTU is a leader in heavy-duty industrial diesel engines.
The JV announcement came at the OTC oil and gas show in Houston – involving Glasgow-based Weir's oil and gas division, with global operations that include a sales office in Aberdeen.
With the fracking technology link-up, Weir said it was an extension of the collaboration agreement announced in May 2014.
The Weir-MTU power system integrated engine, transmission and hydraulic fracturing pump into one purpose-built power system for shale fracturing, which had helped the US produce record levels of oil and gas in recent years.
Weir Group chief executive Keith Cochrane said, ''This joint-venture again shows our ongoing commitment to innovation which reduces our customers' total cost of ownership and improves productivity.
''By combining the frack pump, transmission and engine into one power system and supporting it using MTU and Weir's service networks, we will deliver significant benefits for our oil and gas customers.''
The joint-venture – which is yet to be named, comes with oil prices at around $65 a barrel – just above half the level a year ago – making fracking less attractive due to the higher costs compared with traditional drilling.
A spokesman for Weir said, rather than sitting still while the oil price was low, the companies were looking to develop. He added, the industry was looking for efficiencies and this agreement was about trying to get costs down.
The first product to be produced by the new business would be in the market in mid-2016.
Dr Ulrich Dohle, chief executive of Rolls-Royce Power Systems, said, ''The new joint venture between MTU and Weir will provide easier access to a completely integrated pumping power system that addresses the challenges faced by frack site operators.''
The agreement comes amid falling oil prices putting pressure on the companies.
According to Glasgow-based Weir's trading update last month, energy companies were slashing their spending on new equipment and had previously implemented a series of cost saving measures and job cuts.
