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Introduction

With gas back in vogue as the fuel of choice for power

generation, one of the oldest established engine technologies

– gas engines – is newly resurgent as a power source. Plentiful

supplies of natural gas and the increasing availability of

‘alternative’ gases such as biogas and anaerobic gas -

encouraged by policies favouring clean, renewable energy - is

driving the take up of localised power.

Energy security has climbed to the top of the business

agenda, as shifting government policies towards other fuel

sources are persuading industrial users to invest in localised

gas generation.

The economic case is compelling. Combined Heat and Power

(CHP) has become one of the most profitable ways that

companies can use to reduce their energy bills, providing heat

to the site and achieving cost savings of between 15% - 40%

over conventional electricity. (Source: CHPA).

Manufacturing plants and major new office buildings which

strive for security from the grid, can embed gas engines on

site, positioned close to suitable heat loads and/or sources of

low cost fuel.

EMEA demand

It is in Europe where the use of gas engines for power

generation is growing rapidly.

Andrew Stone, Director of Energy Solutions at Cummins,says EMEA is their biggest sales region for gas enginesglobally. Stone believes in keeping the proposition to newcustomers simple “We are not selling an engine, we are selling a solution”.

Richard Holdsworth, Global Marketing Manager, Lubricantsat Shell believes there is a shift towards independent back uppower and a real move away from heavy fuel towards gas. Hebelieves LNG will become an alternative option to heavy fuelin many parts of the world.

But the focus of this particular research is on the expandinguse of gas engines for the power generation market inEurope, where two thirds of all gas engines are sold,accounting for some 3800MW of power. (Source: TSW). Tostudy whole of market, The Strategy Works conducted indepth interviews with 25 companies involved in differentparts of the supply chain split into these defined sectors:

n O&Ms (operating and maintaining fleets of gasengines)

n OEMs (manufacturers of gas engines)

n Gas Engine Oil Manufacturers (selling lubricating oilfor gas engines)

n Gas Engine Oil Additives Manufacturers (sellingadditives to gas engine oil manufacturers)

The gas engine market

There is no reliable public domain data for sales of gas

engines as trade statistics are not (discretely) logged. Also

engine manufacturers are understandably nervous about

sharing data because recent acquisitions have concentrated

manufacturing capacity, prompting a 2011 EEA

monopolies investigation.

Combining desk research with interviews conducted, TSW

estimates that global annual gas engine sales (over 500kW in

power) exceed 6,000 MW per annum, of which 64% is in

EMEA at over 3,800 MW. (Chart Source: TSW)

In fact Europe, apart from accounting for two thirds of global

sales, is also the epicentre for production of gas engines with

CAT having relocated their excellence centre (for gas engines)

to MWM in Mannheim and GE confirming that 90% of their

worldwide sales of gas engines are manufactured by Jenbacher

in Austria. Another large USA manufacturer Cummins has

42% of its gas engine sales in EMEA.

Germany is a particularly important market for biogas with

rapid take up because of feed-in tariff incentives. This is

confirmed by Sharanie Patterson, Category Portfolio Manager

for Power Generation, Natural Gas Engine Oils at Petro-

Canada. “Our largest market would be Germany, which is the biggest

market in biogas, followed by the UK. Germany has large potential

with some 7,000 gas engines right now running on biogas. Our focus is

Gas engines emergefrom the shadows

Annual sales (In MW) of Gas Engines over 500kW = 6,000MW/year

18 Power Engineer September 2013 www.idgte.org

www.idgte.org Power Engineer September 2013 19

Gas engines emerge from the shadows

going to be on Germany, UK, France, Spain, Italy. Gas Engines is a

category that is growing double digit every year.”

The growth in biogas is recognised by Philippe Poudou,

Product Line Manager IEO Specialities EAME at Oronite “In

Germany the production from biogas increased by almost 20% in 2011.”

Source: Biogas Barometer, EUROBSERV’ER December 2012

Kirill Chervyakov, Industrial Marketing Advisor, Mobil

Industrial Lubricants, agrees: “Germany, Italy and Benelux are our

main markets for gas engine oils in Europe. Germany has developed a

strong biogas market and Benelux is using gas engines extensively for their

greenhouse operations.”

Frank Merbitz, (Chief) Applications Consultant at Addinol

echoes these views. “Europe is most important to us as there are

more gas engines than in other places, especially in Eastern European

countries like the Czech Republic, Bulgaria or Estonia, but also in Italy

and in Germany. Nowadays it accounts for a large share of our total

turnover and it’s growing still.”

Michael Wagner, Marketing Director of leading engine

manufacturer Jenbacher explains: “Western Europe and secondly

Eastern Europe are still our traditional segments. Germany and Italy

are historically among the important segments for us.”

Maxim Donde, LLK (Lukoil) General Director in Russia also

sees the growth in gas engines. “The dynamics of sales is positive.

Market volume of these oils around the world is growing at about 5%

per year, which is associated with an increase in the number of working

gas engines.”

David Burke, Service Director of leading O&M Clarke

Energy who maintain 300 engines in the UK and has installed

units with over 2,750 MW capacity worldwide, confirms the

drivers in the UK “The two big markets now are natural gas for

combined heat and power and the anaerobic digestion biogas markets.”

“In general we see that there is a lot of growth in gas engines and

especially on the natural gas side” says Mark Hensen, Senior

Product Line Manager – Energy, of Q8Oils.

Installed capacity – 40GW

TSW estimates that to total installed capacity of gas engines

in EMEA is 40GW and is growing at around 8% per year.

Based on average oil consumption figures this equates to over

270 million litres per year for gas engine oil within EMEA

making the EMEA market alone worth around £500m

($750m) for lubricant.

The use of gas engines

In EMEA the main application for gas engines has

traditionally been and continues to be for power generation,

whereas in North America it is for pipeline applications such

as gas transmission and compression. In fact GE produces its

Waukesha gas engines range in the US, primarily for gas

compression and the European built Jenbacher gas engines

range for power generation, reflecting their different profiles

and are offering those to worldwide customers. The rapid

availability of low cost shale gas in the USA produced by

fracking could change the market dynamics there in the

future but gas generation will remain the dominant driver

within EMEA.

Examples of embedded generation

Operation and maintenance companies play a pivotal role in

the market as power generation is rarely the business of the

enterprises where the engines are installed. Therefore the

work is farmed out to specialist operation and maintenance

providers (O&Ms) as plants can be required to operate 24/7

and at full power. Many companies who sell plant also seek to

secure the O&M contracts.

Any loss of output is lost revenue, so choosing and buying

the right gas engine oil is a critical decision (for the O&M)

Gas engine oil approval/trial procedures

Alan Beckman, Natural Gas Engine Oil OEM Liaison of

Oronite in California, USA outlines the lengthy process that

gas engine oil companies are required to navigate to get their

oil on an approvals list. “Each OEM has its own specific approval

process that you need to satisfy, so there’s a lot of coordination and

careful planning that has to go into running the field test and putting the

data packages together and then making the presentations to the

OEMs.”

The process starts with the gas engine manufacturers (OEMs)

specifying the performance parameters of the lubricating oil

their engines require. Some go further and also provide a

‘long list’ of approved oils allowing the end user - typically

the O&M - to select from the list according to the type of

application and gas. They strive to provide a wide choice of

Factories, Hospital Energy Centres, Broadcasting Studios, Hotels, Leisure Centres, Horticulture, etc

Farms with organic waste,Meat or vegetableprocessing plants,Water/Sewage treatmentplantsLandfill sites, Wasterecycling plantsDisused and operationalcoal mines

On-site energy demand On site “free” fuel

T-Po 101 Gasmotor Jenbachersupplied by ExxonMobil

Article

approved oil brands, so the lists are generally comprehensive

and OEMs strongly avoid ‘recommending’ any particular

brand from their list and rarely ‘specify’ that a particular gas

engine oil is used solely.

There are some OEMs like Cummins who also have their

own brand of oil. Stone explains: “We have a marketing

agreement with Valvoline. If you had a maintenance agreement with

Cummins we do have a preference for Valvoline but have the option to

use other specified oils dependent on availability, application etc.”

The one exception is Guascor owned by Dresser Rand who

recommend only its own brand of gas engine oil “We

incentivise the use of our oil which has been tested and designed for our

engines and the specific applications that we’re in. During the warranty

period we will not warrant the engine unless our oil is used.”

comments José Maria Bilbao, Sales Director, Power

Environmental Solutions

David Burke of Clarke Energy confirms that O&Ms have a

wide list of oils to choose from “GE Power & Water’s gas engine

business leave it open for you to select from their approved oils list.” If a

choice is made from outside that list without the OEM’s

agreement, then the warranty may be invalidated.

“They won’t favour one oil company over the other. In their field trials

they are simply concerned whether the oils are suitable for use in their

engines” says Addinol‘s Merbitz.

However, once outside the OEMs’ warranty period (around

12 months), O&Ms are then free to choose the gas engine oil

that they use, but they usually won’t switch oils until they

have run trials to prove that the new oil is better for them in

their fleet. These trials conducted over many months are

often funded by oil manufacturers. “As part of the product

development process, ExxonMobil will sponsor field tests to obtain

OEM approvals and provide lubricant proof of performance, including

oil supply, power cylinder assembly installation, borescopic inspections

and in-service oil analysis.” says Kathleen Tellier, Commercial,

Marine & Gas Engine Oils, Product Research & Technology,

ExxonMobil.

Paul Nadin-Salter, Technical Manager at Chevron emphasises

this point: “Everything in this business is about trials”. This is

confirmed by Praveen Nagpal, Global Product Application

Specialist, Lubricants for Shell: “There are extensive field trials

involved before we finally secure approval for a product.”

Arevon Energy who operate and maintain 35 mature landfill

sites in the UK with a total output of 64 MW explain how

the trial procedure works from their perspective as an end

customer. Mark Woollams, Asset Manager explains that if the

oil is less expensive, then the first stage is a like for like trial,

without altering oil change intervals; if satisfactory, they will

adopt the new product but run further tests to see what

benefits can be achieved by increasing oil change intervals.

Woollams confirms initial trials can take six months to a year

with the oil company usually underwriting the commercial

risks, and providing the test oil either free or at a reduced

cost, allowing O&Ms to benefit from effectively being the

trial resource for oil companies.

This detailed testing process is confirmed by Stone at

Cummins “There are a number of tests and a number of gates that

the oil companies have to pass, some of them are static, some of them

are dynamic.”

Hensen of Q8Oils explains the step by step process. “How

they [OEMs] approve their oils is done through a trial, so we agree it

with them, we find an engine, we agree on the test conditions, test length,

number of samples, at the end usually inspection or intermediate

inspections are required.”

The conclusion is that the O&M will only switch oil suppliers

if the oil is first trialled on engines in its fleet and it reduces

operating costs.

Types of gas

Sub-sectors exhibit different growth characteristics; the

consensus of those interviewed is that anaerobic digestion

and biogas are both increasing and following the trend of

natural gas.

David Hatherill, Head of Power Technologies & Engineering

Manager, at Finning (UK) Ltd. part of the world’s largest

EnerG plant in situ at Tesco

Mobil SHC Pagasussupplied by ExxonMobil


Caterpillar distributor, Finning International Inc, confirms

their investment in the potential of biogas from anaerobic

digestion: “We have just finished our first anaerobic digestion

plant for a major customer in the UK, so we are expanding the

scope of our Caterpillar distribution business in a complementary

manner with our Clean Power, Contracting and Technologies

division. We firmly believe that there is a growing demand and that

will continue for gas power generation in the future.” Finning’s

UK Power Generation business contributes £50m in

revenues to the Group.

Edina only entered the UK market about 5 years ago, but has

grown rapidly. Tony Fenton, CEO, attributes part of the

growth to their focus on anaerobic digestion biogas:

“Anaerobic gas has many problems and no two sites are the same.

Along with our CHP business we took the strategic decision to focus on

AD and have seen major business growth as a result.”

The consensus is that landfill gas is declining in the UK,

where no new sites are permitted (the move is now to

anaerobic digestion) but, in contrast, landfill is increasing in

the rest of the world. However, this creates an opportunity

for the UK to export its expertise to other markets. “The good

thing for UK people involved in landfill is that they’re taking that

experience out to the world now, with hindsight, to countries like Mexico,

Brazil, Mauritius, and they’re recognising that landfill is a viable

technology” says Nadin-Salter of Chevron.

The decline in the UK landfill market is endorsed by Julian

Packer, Director at Cogenco. “The whole drive away from dumping

landfill, moving to recycling and making use of these materials means

that there will be no great prospects for landfill.” Cummins who

have a global perspective confirm this “….elsewhere in the world

landfill is booming” adds Stone.

Trends in the UK are confirmed by David Burke at Clarke

Energy: “In the UK, landfill operators may have excess capacity on

their engines”

The gas type also affects the specification of the engine.

Wagner of GE’s Jenbacher gas engines explains: “There are

about 13 or 14 different types of engine, all differently optimised for

differing gases and customised for differing applications”

Problems caused by contaminated gasesand the role of additives

All O&Ms use regular oil analysis to ensure that the oil never

fails to protect the engine and is changed in good time. So

they are well aware of the effect of different gases on the oil.

The majority of O&Ms and OEMs interviewed did not

regard natural gas as a problem; the major technical issues

were always around biogas and other contaminated or ‘sour’

gases; these present the greatest challenges for the O&Ms

and also the OEMs in the design of the gas engines.

The chart below demonstrates the % fleet by types of gas for

the OEM’s interviewed. This shows that (on average) 60% of

their UK fleet runs on contaminated gases.

A measure of the difference between clean natural gas and

the dirtier biogases is that O&Ms typically analyse the

engine oil monthly, if it runs on natural gas, but weekly if

it runs on biogas.

There was widespread agreement that the main contaminants

that condemn engine oil were hydrogen sulphide and

siloxanes. Without additives in the oil, the hydrogen sulphide

would make the oil acidic, attacking the engine, and abrasive

deposits from the siloxanes, would cause extreme wear,

particularly on the cylinder surface.

For engines operating on landfill gas, siloxanes, which form a

silicon dioxide deposit, are usually the worst offender.

Unchecked these deposits on the inside of the combustion

chamber would raise the operating temperature and increase

nitrogen oxide emissions.

For engines operating on gas from anaerobic digestion and

other biogases, hydrogen sulphide was usually the worst.

Hydrogen sulphide in biogas reduces oil life by creating acids

in the oil that must be neutralised by additives.

The key purposes of additives are:

ENER-G 60% 1% 30% 3% 5% 1%

Cogenco 90% 10%

Edina 50% 20% 5% 25%

Finning 12% 5% 72% 11%

Clarke Energy 26% 6% 55% 5% 8%

Arevon 100%



O&M Na

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Lan

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ga

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An

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LPG

% of fleet (in MW) by gas type (Source : TSW)

Landfill installation in Finland 4 2032 15MWsupplied by MWM

n Protection against corrosive substances such as acids

that form in the oil

n Improving upper cylinder and head lubrication and

reduce valve recession.

n Protection against harmful compounds that are

abrasive

Stone of Cummins sees the benefit of the additives to

combat these problems “It’s the secret of that additive package and

how it deals with the siloxanes and the hydrogen sulphide that is the

unique selling point.” This is endorsed by a leading independent

oil analysis laboratory, Spectro whose Global Power Systems

Advisor Don Wootton, comments “There is definite evidence that

in high silicon engines certain additive types can reduce the friction caused

by the silicon in the combustion chamber.”

Dean Clark, Global Segment Manager for Gas Engine Oil

Additives at Infineum agrees: “Regular oil testing and changes

work well but do not provide complete engine protection. For example

damage caused by Silicon dioxide deposits triggered by the impurities in

landfill gas drive frequent and expensive top-end engine rebuilds (costing

~$25,000-$40,000). We are working with our oil company partners to

further develop our additive packages so that they effectively suspend and

disperse these impurities thus reducing both the harmful effects and the

cost of maintenance.”

Stone of Cummins sees the benefit of the additives to

combat these problems “It’s the secret of that additive package and

how it deals with the siloxanes and the hydrogen sulphide is their unique

selling point.”

Oil change intervals may vary from 150 hours in the case of

highly contaminated gases to 1,000 to 2,000 hours for clean

gases. To put this in context, 150 hours would be only 6 days

of operation and 1000 hours is 6 weeks.

Nadin-Salter explains that Chevron is striving to extend oil

drain intervals. “Some people want highly improved extended drain

periods, up to 8,000 hours and some in the landfill market are

content if they can achieve 1,000 hours, depending on the quality of

the gas. To combat the very aggressive gases in landfill technology,

our HDAX 6500 can extend drain periods by 50% or more in the

same application, and it is highly resistant to abrasive silicones

produced in landfill.”

But extended life oil is more expensive and some OEMs

believe that changing the oil more frequently is a financially

better solution.

Peter Law, Operations Director at ENER-G is not

convinced about the premium placed on extended life oil:

“The cost of an oil that will do 10,000 hours is massive compared to

an oil that does 1,000 hours, so you may as well go for an oil which

will do you 1,000 hours... we do look at alternative ways of

extending the oil life but we then have to weigh the cost of the oil

versus the benefit it provides you.”

Shorter maintenance regimes are favoured by other O&M’s.

Woollams at Arevon Energy confirms: “We are actively

shortening the routine maintenance and overhaul regimes to combat the

aggressive nature of the gas.”

Holdsworth of Shell stresses that sewage gases, landfill gases

and other non-traditional gas types can cause problems to

engine operation due to their fluctuating quality over time

and from location to location: “For these sour gas applications,

there’s a tremendous variation in the amount of acidity and other

contaminants that comes through the gas and that can really impact the

oil drain intervals.”

Base oils

Gas Engine Oils are carefully formulated blends of base

stock that provides the lubrication, into which are blended

additives that customise the oil to the demands of the

application, unlike automotive oils, where multigrades are

more common. Most base oils fall into one of two categories:

those made by refining crude oil through solvent extraction

(Group I) and those made by a more sophisticated

refinement processes (Groups II and III).

There are split opinions prevalent in the market. There are

companies such as Q8OILS and Lukoil who are only using

Group I. Conversely, Petro Canada produce and use Group II

oils and Chevron has made a strategic decision to move all its

gas engine oils to Group II.

Woollams of Arevon confirms their on-going trial: “Currently,

the whole of our fleet is on Group I products but we’re currently on a

trial with Chevron on a Group II product, if it proves successful we’ll

move all our fleet onto the Group II because of the future long-term life

and availability.”

Poudou of Chevron Oronite believes the decision to switch

to Group II base oils to achieve high performance is correct

‘Mainly in gas engine oil it’s Group I, Group II category, some are

using Group III to make it a bit different...I would say that Group II

oils currently are the bulk of the high performance products in natural

gas engine oils.”

Damian Perez de Larraya, Technical Director, Power

Environmental Solutions at Dresser Rand has concerns

about cost effectiveness of Group II oils “We hold a different

view, group two oils are nice oils, but they may not be cost-effective.”

Hensen explains Q8Oil’s preference for Group I: “New

developments are more related to the thermal stability of Gas Engine

Oils, deposit control in combination with good dispersancy, so looking at

different components but also different base fluids, that’s really critical for

Article

Oil field test inspectionssupplied by Oronite


the moment... we know that there are a lot of companies going to the

Group II base oils, we think that Q8 Oils produces one of the best

Group I base oils with very good oxidation stability and therefore very

suitable for gas engines of the newest generation.”

Spectro believes that both additive and oil manufacturers are

moving towards the use of higher quality base stocks for

their new packages, giving advantages such as longer oil

drains, cleaner upper cylinders and reduced volatilisation.

Spectro believe in the importance of calendarisation, says

Wootton “I'm aware that there’s a desire to calendarise oil change to

synchronise with service intervals because, particularly with natural gas

engines where the oil change cycles are getting longer and longer,

synchronisation with the service cycle is a more appropriate emphasis

than simply the longevity of the oil change.”

Some lubricant manufacturers like Addinol use high-

quality mineral and synthetic base oil components for

longer life products.

However the consensus from manufacturers is clear in that 5

or 6 different oil products were needed in an oil company’s

gas engine oil portfolio in order to meet all of the various

needs, including some with extended life.

The role of additives

Gas engine oil companies create their unique gas engine oil

formulations to suit different applications by blending their

selected additives into the chosen base oil. The additives must

be carefully blended together first before they can be mixed

into the oil. This process, to create the additive cocktail, is

complex and an additive mixture that works well in one base

oil will produce different results in another.

When a lubricant burns in the combustion chamber it will

form a carbon deposit and the additives form ash. All OEMs

will have specifications for the permissible amount of ash

and oil companies therefore determine how much ash their

oil contains (e.g., medium ash, low ash, etc.) and their

products are marketed in this fashion.

This point is confirmed by Woollams at Arevon Energy:

“The additives introduced to the oil to combat the siloxanes create ash

and ash causes problems within the engines”. David Burke at

Clarke Energy explains: “Ash is there primarily as one of the

safeguards against the acid increase, it adds some absorbency to

protect against acid build-up, so that would be the reason why you

would normally see a medium ash oil for a non-natural gas

application or a low ash oil for natural gas”. Lube Oil Ash is an

essential component for the effective ‘lubrication’ of the

gas engine exhaust valve seat & face.

MWM in Germany (acquired by CAT in 2011) clearly believes

in the effectiveness of additives but they specify the oil not

the additive itself. This is confirmed by Armin Roeseler, Head

of Product Line Management at MWM. “We do not specify

exactly which and how many additives have to be included in the engine

oil; this is done by the oil producers. However, our specialists work very

closely together with the oil manufacturers as they understand additives.”

Roeseler also explains the difference in approach between

natural gas and biogas “Generally, the issue is not to have as many

additives as possible, for instance with natural gas you should have only

the amount of additives that you really need in your oil, as too many

can lead to deposits which in turn change your compression ratio and

impinges on the running of the engine. We clearly state that with

natural gas the ash content must not exceed 0.5% and with biogas it has

to be in a range of 0.5% - 1.0%.”

Merbitz of Addinol also believes that the attributes of the oil

need to match the type of gas. “It is better if you can offer a tailor

made oil for the situation it is needed for. There is a huge difference

between the demands biogas makes on an engine and natural gas”

Engine design is driving the development of gas engine oil

and hence the choice of additives and base oil, as explained

by Hensen of Q8Oils. “OEMs are pushing towards higher

efficiency engines, and this means that temperatures and pressures in the

engines will go up. Of course this is also important for the lubricant

because if pressure and temperature goes up we have to deal with more

thermally stable additives.”

Iban Bascones Oset, Power Plants and Cogeneration

Lubricants Expert for REPSOL in Spain explains that: “We add

detergent/dispersant additives for cleaning and to prevent the build-up of

engine deposits, antioxidants to prolong oil life, prevent corrosion/wear

to protect the engine, de-foamers etc.”

Additive packs versus components

Oil companies have a choice how they create their additive

mixtures; they can buy the additives either as pre-formulated

‘packs’ or as individual chemical components to make their

own additive packs in-house if they have the equipment and

expertise to do so. Whether produced in-house from

components or bought-in, the additive pack contains all of

the components to create the final gas engine oil when

blended into the chosen base oil.

Beckman at Oronite in California explains the difference: “An

individual piece of an additive package would be termed a component.

A particular type of detergent would be a component; a formulated

additive would contain all of the components necessary for the final

product to be blended from the customer’s base oils”

ExxonMobil (acknowledged by most to be the market leader)

is firmly in the components camp and sees it as a point of

difference with competitors. “Mobil Pegasus™ gas engine


MWM TCG2020K 350 engine


oils are component based formulations, and therefore we do

not deploy additive packages like some of the competition.

This approach allows each additive to be specifically selected and

optimised to meet the required performance levels. Types of additives

which are selected include, detergents, dispersants, antioxidants, anti-

wear, metal passivators to name but a few” says Tellier.

Chevron is the only oil company that has an additives

company (Oronite) within the same group and it believes that

gives them an edge. “It’s that combination of knowing base oil

technology and additive technology and blending them all together and we

can quite confidently say we’re the only integrated lubricant

manufacturer” comments Nadin-Salter.

Oil analysis

Spectro has an independent view of the market because it

conducts oil analysis for a number of oil companies and

O&Ms, claiming a majority share of the outsourced UK gas

engine oil analysis market and substantial penetration of the

EU market

Spectro is competing with those oil companies who now

provide their own analysis service. It still provides services to

many oil companies (who offer Spectro’s analysis to their

customers), but it has focused strongly on serving the O&Ms

and they actively strive to understand their needs. In this

respect, Wootton sees one of Spectro’s core strengths as the

quality of its technical staff.

Stewart Wilson, Manager, Centre of Excellence, at landfill

operator Infinis comments: “Spectro’s turnaround times coupled

with the accuracy of reporting are excellent. We rely heavily on their

analysis and would find the maintenance task much more challenging

without their input.”

David Burke of Clarke Energy confirms the importance of

oil analysis. “Our primary method for determining oil change frequency

is through lube oil analysis.”

Merbitz at Addinol in Germany is also an advocate of oil

analysis: “The application of our gas engine oils is accompanied by

substantiated technical support and regular oil analyses. Based on

analysis results and comprehensive experience, we determine the optimum

oil change intervals for each gas engine, individually and tailored to the

particular operating conditions. Therefore, operators do not only have

operating and maintenance costs under control, but monitor the state of

the plants and ensure their trouble-free operation.”

“If the customer is used to drain interval of 1,000 hours, we

do regular oil analysis every few hundred hours, an analysis of

1,000 hours, look at the oil quality but still drain the oil and

then the next oil drain we go to 1,100, look at the results, so

just stretch the oil life” says Joris van der List, Research

Scientist at Q8Oils

Woollams of Arevon Energy is another advocate of oil

analysis: “We use condition based monitoring for the oil. It is sent away

weekly to laboratories.”

Packer of Cogenco also believes in regular oil monitoring:

“Every service and in-between services we take oil samples and have

them analysed.”

Holdsworth of Shell is another who believes in monitoring

feedback “We get data from the customer locations and specifically

customers with operational issues and subsequently use a ‘demonstrated

value record’ to document what happened to the customer, what we’ve

done, and how that has solved their problem.”

B2B relationships

The relationships matrix below demonstrates where the main

marketing and technical dialogue takes place.

The main oil companies (GEOs) maintain relationships with

the O&Ms because they are their key customers, but also with

the OEM’s because they specify the range of oils that can be

used within the initial warranty period.

Additive companies (GEOAs) have virtually no relationship

with final users of the product, as the product is not added

separately (by OEMs); it’s always part of the gas engine oil

formulation. Therefore the gas engine oil companies are in

effect their customers.

“Generally, it is not recommended to add additives yourself as you

might damage the engine. So, all our additives for gas engines come

blended in the oil. It’s important not to underestimate the expertise

needed to marry oils and additives. We have 20 years’ experience in

doing that for the lubrication of gas engines, our overall experience

in the composition of lubricants reaches back as far as 1936”

adds Merbitz.

Hatherill of Finning also advises against end users blending

additives separately into the gas engine oil: “We would not

recommend anybody did that.”

Bascones of REPSOL is just as strong on this point:

“REPSOL does not recommend introducing any other additives to the

oil or engine as this can alter the original formula of oils and threatens

the balance of the different components of the formula. If this occurs,

any guarantee, assurances or approvals are null and void.”

The universal industry view is that the additive formulations

are the intellectual property of the additive companies and, if

Article

Groups they generally talk to

Company groups

O&Ms OEMs GEOs GEO As

O&Ms

OEMs

GEOs

GEO As

Good relationship

Limited relationship

No relationship

Relationship matrix


they were to release that information into the market, they

would compromise their IP. Therefore they are only

effectively sold as an ‘ingredient’ to oil companies, not for

later use within the end customer supply chain.

This is confirmed by Merbitz at Addinol in Germany. “Every

company has their own secret mix of one or several additives with the

oil. The additives help to increase the base properties in the process and

obviously the lubrication. Our engine oil used for biogas and fermented

gases mainly possesses an outstanding neutralising capacity towards acid

components; it is a so-called high-ash product containing a special

additive package.”

Patterson of Petro-Canada sees it as a partnership “Ultimately,

it’s about a partnership with the additive company.”

“You are only able to make it if you have a good sales staff, good

service, good support and that the customer knows that’s someone taking

care of me”, explains Hensen of Q8Oils.

OEMs - gas engine power bands

Gas engines can be split into two major power bands, over 5

MW which operates almost entirely on natural gas and below

5 MW. The 500 KW to 3.5 MW bands account for 68% of

all new capacity and it is these power bands where there is the

highest use of contaminated gas.

The future

Most are optimistic about the future and the prospects for

gas. Thoralf Lemke Director of Marketing at MWM is

positive: “Gas has become, not just in the US, a lot cheaper and in

one or two years the US will become an exporter of gas. Then this lower

cost gas will be available outside the US as well. For the future we are

very optimistic and expect good growth opportunities”

Hermann Kling, Sales Gas Engines Export, of MAN

forecasts a 5% growth in gas engines sales in EMEA. “The

biogas share will grow depending on energy politics and the natural gas

share will become more important.” he adds.

Wagner of Jenbacher, believes that in Germany and Western

Europe biogas will increase further. Going forward,

government energy policies and, in particular the subsidies

and incentives, will have a profound effect on the market. “It

will be very important to watch the debate on energy diversity and safety

as it will determine which renewable energies profit from subsidies and to

what levels.” says Wagner.

The gas engine still sits below the radar, without an SIC

product code and does not appear in official statistics. Yet

this long established technology has become one of the

most cost effective ways of generating electricity, with over

40GW of installed capacity (over 500kW) across EMEA

and growing.

The market is growing rapidly because it makes

compelling financial sense for investors and helps mitigate

the risk of electricity shortages. Still to come is the

unknown impact of shale gas development which may

secure further investment in distributed generation in

Europe, using gas engines.

All market sectors interviewed for this article stand to

benefit from the projected market growth but gas engine

oil companies in particular face the ‘perfect storm’. They

are secure in the knowledge that oil consumption (per se)

is increasing faster than the market, because of the rapid

growth of biogases in the mix which greatly increase oil

consumption. Gas engines have indeed proved to be ‘the

stalking horse’, silently booming again, some 140 years

after they were first invented. n

Acknowledgements

The Strategy Works acknowledges the support of the

following companies who co-operated in the research

programme for this article:


% of Global sales of gas engines in MW by power band

The Strategy Works

This article has been prepared by Michael Herson

and Bob Bell of London based The Strategy Works - a

strategic marketing consultancy specialising in

market sizing and original business to business insight

on a global basis.

Contact: 44 208 868 0212 or

[email protected]

Website: www.thestrategyworks.com

Cummins Arevon Infineum Addinol

Dresser Rand Clarke Energy Oronite Chevron

Jenbacher Cogenco Spectro ExxonMobil

MAN Edina Petro-Canada

Rolls Royce/ Finning Q8 Oils

Bergen Wärtsilä Repsol

Shell

Additivecompanies/Oil

OEMs O&Ms Oil/lab companies


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