Date: May 18, 2014 Author: Chuck Soder Source: Crains Cleveland (
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The Euclid-based startup has spent the past few years developing a faster, cheaper way to protect steel pipes from corrosion.
But corrosion isn't the only enemy faced by energy companies working to pull tar-like petroleum out of the ground in northern Canada.
MesoCoat is about to start working with a technical school in Canada to optimize a new method of protecting pipelines from another problem: wear and tear.
The school, the province of Alberta and a group called Western Economic Diversification Canada have chipped in about $3 million for the project. Meanwhile, MesoCoat and its majority owner, a Miami-based investment firm called Abakan Inc., are throwing in another $1.2 million, according to documents Abakan filed with the U.S. Securities and Exchange Commission.
The effort aims to solve a multibillion-dollar problem.
There's a reason why the thick petroleum being pulled from the ground in northern Alberta often is referred to as "oil sands" or "tar sands" — it's packed with sand.
And sand is abrasive. It tears up pipes as it flows from the mine to processing facilities that separate the sand from the oil, and then the sand is pumped back to the mine, causing more damage.
It's expensive to buy super-strong pipes. Thus, every few months energy companies have to cut each piece of pipe, rotate it and put it back, unless it needs replaced. But that process is expensive, too, mainly because companies can't pump anything through those pipes while they're being rotated or replaced.
However, MesoCoat aims to provide a cheaper way of making standard pipes stronger, with the help of a plasma arc lamp that causes the company's protective coatings to bond with the inside of the pipe.
It'll be a while before the wear-resistant version of MesoCoat's CermaClad technology is ready. MesoCoat and the technical school, the Northern Alberta Institute of Technology, plan to spend roughly two years testing and tweaking the technology.
Even so, companies working in Canada's oil sands region already have shown interest in the technology: More than 20 energy companies and suppliers working in the area belong to a consortium that's involved with the project, according to MesoCoat founder Andrew Sherman.
"A number of them are actually contributing time and effort and resources to this project," Sherman said.
If MesoCoat can indeed prove it has a better, cheaper way to protect pipes from wear and tear, selling the technology will be easy, according to CEO Stephen Goss.
"They will be knocking our door down," Goss said.
Combined, corrosion and wear and tear cost Canada's oil sands industry about $10 billion per year in maintenance and downtime, according to an interview that Alberta Oil magazine conducted in March with John Wolodko, director of an energy industry consortium called Materials and Reliability in Oil Sands.
That market is plenty big, but lots of other abrasive materials — iron ore, coal and rock — are transported by pipe in slurry form, according to Goss.
"That's exactly why we say the market is much bigger than just oil," he said.
