Tuesday, Nov 04, 2003

Build a better mousetrap and the world will beat a path to your door, the saying goes. Build a better pipeline pig, though, and you not only win one of the UK's most important young enterprise awards, you also offer the promise of savings worth hundreds of millions of pounds in one of the world's biggest industries.

That is precisely the achievement of Gar-Ling Ng, a 20-year-old third-year student of mechanical and electrical engineering at the University of Aberdeen. During a recent two-month internship with Pact, a small local pipeline engineering company, she helped design and develop a drive mechanism for a pipeline "pig" that could revolutionise current oil industry practice.

Tim Derval, Pact's co-founder and managing director, says the value of Ms Ng's contribution to the company has been "simply incalculable", as it may also prove to the oil industry. Last week it won her the Shell Technology Enterprise Programme's "most enterprising student" award, beating 1,400 other students sponsored under the Step programme, a Shell and government-sponsored scheme to subsidise innovative student interns with small British companies.

Over 17 years, the scheme has guided thousands of students into successful business careers, throwing up dozens of industrial innovations in the process. Few, however, match the potential impact of the pig design.

Pipeline pigs are essentially bullet-shaped devices inserted into oil and gas pipelines to clean, unclog and check them. But current pigs have several drawbacks, most notably that they can travel only in the direction of the pipeline flow; they are usually solid devices, propelled by the oil flow itself.

To deal with these limitations, Mr Derval and two oil engineer colleagues set up Pact in 1994 to design a pig that could also run against the flow, without an external power source and without disrupting the flow.

Drawing on modest stage-by-stage funding from five oil majors, including ConocoPhillips, PetroCanada and Amerada Hess, although ironically not Shell, Pact built an early prototype in the late-1990s and was advancing a design that promised to make huge savings in oil companies' capital and running costs.

Because current pigs run in only one direction, oil companies have to install a pipeline loop from a platform to any wellhead to allow the pig to travel out to the wellhead and back. The extra leg for the loop can cost Pounds 14m for a 10km stretch of pipeline. A pig that can travel in both directions would save that capital cost at a stroke, among other potential advantages.

By the time Ms Ng joined Pact under the Step programme in July, the company had hit an impasse over the device's self-powered drive mechanism, essentially a form of turbine. "The drive we'd built as a group didn't work," says Mr Derval. "In fact it was a fantastic failure."

Pact's directors decided to rethink the drive design from scratch. Though Ms Ng, having finished her second year of a five-year degree, had only just started her placement, Mr Derval said it was his company's policy to pitch students directly into the core of their work. She was the second student they had had under the Step scheme. "She wasn't just pushed on to a desk and told to get on with it. She was working directly with the directors," he says.

Surprisingly, not least for Ms Ng herself, after a joint brainstorming session on the drive mechanism, it was she who came up with the design solution. Pact is understandably coy about the details, given that it is seeking patent protection. Ms Ng says she still cannot quite believe it was her proposal that worked: "I presented it to the team, and this must have been the scariest moment. I'd just finished my second year at university, and you're putting this design to guys with X amount of experience."

What she came up with, she says, was a design derived from a Chinese lantern. "It's based on the kind of thing we all used to make at primary school," she says. "It's a lot simpler than the first prototype, and I was thinking, 'This is too simple. What's gone wrong here? There's got to be a catch,' but they liked it, and it worked."

Not only did Ms Ng design the device but Mr Derval also assigned to her the task of overseeing the development of a first prototype. She had to find components and deal daily with a contracted machine shop to order the parts and ensure they were made on time and to budget.

Ms Ng admits to having found the process fairly stressful. She had to bring in the design brief, against tight deadlines. And she had to do so in a firmly male environment, among far more experienced engineers.

"I had two things going against me - one, I'm a student, and two, I'm a female," she says. "You have to learn your communication skills to get what you want without being too aggressive. It was extremely daunting. But I had to get on with the job. And it did come in on time and in budget."

After picking up her award in London last week, Ms Ng is back at university. Mr Derval, meanwhile, is looking for further funding to test the device and, ultimately, bring it to production. In the absence, so far, of interest from venture capital companies or business angels, which he says consider Pact either too small or too risky as an investment prospect, Mr Derval will be relying on further funds from the big oil companies.

To Pact the device, if it succeeds, could be worth tens of millions of pounds in revenues; to the oil industry, 10 times that amount. Mr Derval points out that roughly 35 per cent of all the US oil pipelines are currently "unpiggable". "It would cost the US majors Dollars 1.1bn to make all their pipelines piggable. That gives you an idea of the size of the market." But that all lies some way off. Mr Derval says it will take a fair while to bring the device to production.

And it is likely to be without any further help from Ms Ng. Even if the company wanted to, Mr Derval says Pact cannot afford to offer her a full-time job. "We can't keep her on, because we don't have enough funding," he says ruefully. But further funding may be in the pipeline, so to speak. ConocoPhillips says it is "quite excited" by the technology. It is, says Bob Thorp of the oil major's research and development team, "the holy grail of pigging", to create a bi-directional device. Not only could it save individual companies tens of millions of pounds in infrastructure costs, by avoiding the need for pipeline loops out to remote wellheads; Pact's is also a "flow-through" device, meaning it will not cut production flows while in use. There is also less danger if it should become stuck.

"With current technology, if the pig gets stuck, the flow stops. It makes us nervous about putting them in in the first place," says Mr Thorp. "And if they do get stuck, it requires expensive metal-cutting to get them out."

Moreover, says Mr Thorp, the Pact pig is more manoeuvrable than current devices. "There are simply miles and miles and miles of pipeline which are currently unpiggable," he says. "But this pig goes where no other pig has gone before."

Jonathan Guthrie's column returns next week

By MARK NICHOLSON

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