In the past decade alone, the energy sector has seen a decided shift toward wringing out every last drop of energy from the logistics of production, a process spurred on by global cries to reduce harmful emissions, as well as more immediate industry goals such as enhanced profitability, output, and overall efficiency. At the forefront of this push are a variety of players, each bringing different advantages to the market via innovative systems that could collectively help to transform the entire energy equation and put us on a path to a much brighter tomorrow.
One such entity is award-winning pump and pressure harnessing technology developer, Energy Recovery, Inc. (NASDAQ: ERII), with its growing portfolio of proprietary offerings designed to revolutionize complex industrial systems through simplification and enhanced production metrics. These include systems like the PX Prime™, a first-of-its-kind PX Pressure Exchanger made available via the company’s Prime Performance Energy Service Agreement program, which not only guarantees performance, but allows customers to forego upfront CAPEX outlays. The company also provides a variety of field services in association with its systems. Improved capacity and industry-leading efficiency are hallmarks of ERII’s hardware, and the industry has really taken notice over the years, turning to the company more and more as the pressure builds to reduce waste and emissions.
Another prime example would be the company’s extremely versatile VorTeq platform, which incorporates ERII’s revolutionary PX Pressure Exchanger technology, allowing fracking engineers to achieve hitherto unheard of pump lifespans, while simultaneously heading off at the pass the main concern for most fracking operations: pump failure. This extremely robust platform made of tungsten carbide re-routes abrasive fracking proppants safely away from high-pressure pumps, handles up to 15k psi treating pressure, delivers up to 95 percent efficiency exchange, and yet hooks up to the customer’s fleet like a standard manifold trailer.
It’s little wonder, then, that the company has been tapped to deliver $7 million in equipment and services (an optional/additional $4 million is also on the table) to one of the major gas processing plants slated for construction in the Middle East, where demand for such capacity continues to be quite high. Projects such as the $800 million contract announced in March by SNC-Lavalin (OTC: SNCAF), the award of which underscores recent projections by research and consulting firm GlobalData for the future of the space. GlobalData sees global gas processing capacity demand rising nearly 13 percent in the next four years alone, hitting upwards of 516 billion cubic feet per day by 2019, “driven by a slate of projects in the Middle East.”
ERII will be delivering several of its cutting-edge IsoBoost hydraulic pumping systems to the as-yet undisclosed Middle East customer, each engineered to deliver 6,000 gallon-per-minute performance, while helping to offset an estimated 6.5 MW of ongoing power consumption. We are talking roughly 57 GWh a year here. That’s around 39,000 tons of CO2 that would otherwise end up in the atmosphere, and all via an implementation that will not only help operators mitigate the risk of price fluctuations, but return as much as 80 percent of otherwise completely wasted pressure energy to the equation during the removal of acid gas (processing) and production of ammonia (CO2 removal process). It is projects like this that enable ERII to proudly boast that its installed hardware base saves clients over $1.7 billion a year.
The company anticipates revenue recognition from this contract before the year is out and should have word for investors sometime in late 2017 about the additional $4 million in equipment and services. President and CEO of ERII, Joel Gay, emphasized the significance of the deal in light of the continued development of the company’s gas processing segment and the deal’s size, explaining that this is a major validation milestone for the IsoBoost system, and one which shows clearly to investors that ERII is making-good on its commitment to “ensure 2016 is a year of execution and delivery.” The deal is another feather in the cap for this rising, homegrown Bay Area star, which has global offices in Dubai, Shanghai, and Ireland. Investors should keep an ear to the ground for announcements about progress on the contract later this year, as well as for news about that other $4 million.
Similarly, investors should keep in mind the company’s entire technology footprint, as this latest contract represents a shining example of ERII’s ability to continue applying its technologies to new industries and applications, as well as directly address the omni-cyclical nature of the business.
Take a closer look, visit www.energyrecovery.com
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