Latin America Reports

MesoCoat Considers Brazilian Pipe Coating Partnership

By Charles Thurston, Latin America Correspondent | February 7, 2013

Euclid, Ohio-based MesoCoat Inc. is considering a four-line pipe cladding facility in Brazil in cooperation with state petroleum company Petrobras that would serve Brazil’s rising demand for oil and gas pipelines in new discovery areas and in established networks. MesoCoat is currently mounting a $6.3 million one-line factory in Euclid with an annual throughput of up to 30 kilometers of pipe. Once this pilot plant is established, the company could pursue the larger industrial format in Brazil and other countries, company executives have said. Site work in Brazil is already advanced, one source indicates.

Petrobras currently plans to add 230 kilometers of new oil and gas pipeline for an anticipated service date of 2014. The company has an existing pipeline network of more than 30,000 kilometers, as the fifth largest petroleum company in the world with a market capitalization of $140 billion. Petrobras has a history of forming partnerships with global technology leaders to bring manufacturing technology to Brazil. The country also has substantial domestic content rules for supplying state companies: pipe supply in Brazil faces a 70 percent local content threshold, a MesoCoat executive noted.

Petrobras in January 2011 signed a cooperation agreement with MesoCoat to test the latter’s exterior and interior pipe coatings. In April, Brazil’s Central Bank reported that Petrobras and MesoCoat had together registered foreign capital in the country.

MesoCoat’s parent company Abakan Inc, of Miami, secured a low-interest $1 million loan in October  from Ohio’s Innovation Ohio Loan Fund to build out the pilot plant. The company also has received U.S. Department of Energy funding for the proving of the company technology. MesoCoat’s process is plasma arc-fired cermet – mixed ceramic and metallic elements – which the company claims can be deposited at a thickness of 20 micrometers at a speed of one-fortieth of competing welding clad processes, and at a 20 percent savings over competing processes. The coatings are projected to increase the life span of the underlying pipe by a factor of three to 20 years. Among institutions that have helped develop and test the MesoCoat’s CermaClad technology is the U.S. Oak Ridge National Laboratory.

Metal cladding for wear and corrosion protection is a $3.8 billion global market of which approximately 50 percent is for coating steel pipes which are used in the oil and gas, oil sands, mining and processing industries, according to a MesoCoat statement. The company also suggests that this market will double over the next four years since many new oil and gas discoveries are in more corrosive environments. In Brazil, an estimated 80 percent of all reserves are located in so-called “sour” environments. MesoCoat is also attempting to reduce the diameter of pipe into which its coating equipment will fit, and currently can coat the inside of a 7.5 inch diameter pipe.

Among competitors for MesoCoat in Brazil is Socotherm Brasil, originally an Italian company, which provides external and internal coats using epoxy, polyethylene, polypropylene and polyurethane, at its factory in Pindamonhangaba, in Sao Paulo state.