May 6 (Bloomberg) -- Weir Group Plc, the world’s largest seller of fracking pumps used in shale exploration, is teaming up with Rolls-Royce Plc on a new design in anticipation a two-year market glut is about to ease.
Weir plans to roll out a new longer-lasting pump next year in expectation that customer spending is set to rebound within the next 18 months, Chief Executive Officer Keith Cochrane said today in an interview in Houston.
As producers push their fracking fleets to 24-hour operations, moving quickly from well to well with little time in between, their equipment is wearing out faster, the CEO said. It’s now more important for the engine to be able to react to high-pump speeds in order to last longer, he said.
Weir is working with MTU America Inc., a unit of Rolls-Royce Power Systems AG, to create a computerized monitoring system which is expected to reach the market in mid-2015, the companies said today in a statement.
“This is us evolving the frack pump in a way the automotive industry has,” Cochrane said. “Think about how our car has evolved,” he said in relation to the introduction of computerized systems.
Because of the heavy competition among fracking-equipment makers, Glasgow, Scotland-based Weir needed to create a more technology-driven frack pump to differentiate itself and keep its top spot in the market, Cochrane said.
Thanks to increased drilling and the need to replace old equipment, the oversupply in pressure-pumping equipment used to shoot water, sand and chemicals underground to release trapped oil and natural gas is easing much faster than expected, Halliburton Co. said last month.
Fracking service prices are expected to remain flat this year in the U.S. and Canada and increase in some U.S. regions in early 2015, according to a Feb. 14 report by PacWest Consulting Partners in Houston. That’s after tumbling 14 percent in 2012 and by another 7 percent last year, the consultant said. About 16.7 million horsepower for fracking is competing in the U.S. to meet demand for 12.7 million this year.
The average number of rigs active in the U.S. and Canada rose 0.7 percent to 2,304 in the first quarter from 2,289 a year earlier, according to Baker Hughes Inc.
Energy producers are poised to increase capital spending in the U.S. and Canada by 7 percent this year after two previous years of less than 5 percent growth, according to Barclays Plc.
Rolls-Royce and Daimler AG each own a 50 percent stake in Rolls-Royce Power Systems through a joint venture.
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