IPS’s Arab breakthrough

Though IPS business seems simple – energy generation and storage, the nitty-gritty technicalissues and labour in the desert pose serious challenges

IPS’s Arab breakthrough

Bulgarian family firm International Power Supply has finished a key project for Saudi Aramco and is now winning new contracts

Though IPS business seems simple – energy generation and storage, the nitty-gritty technicalissues and labour in the desert pose serious challenges

© IPS


Meet International Power Supply (IPS), a Bulgarian family firm that has virtually no projects in Bulgaria but is known in nearly 60 other countries. Its main product, the Exeron system, provides independent power supply for remote sites, using renewable sources of energy.

Though it sounds simple, the latest project of the company is not only a market advance but also a technological breakthrough in this area. IPS recently finished a project to supply power to three natural gas wells of Saudi Aramco, which is the first such technological application in the world. The successful completion of the project for the world's largest oil and gas company opens unlimited opportunities for IPS.

To be noticed by Aramco

Alexander Rangelov, CEO of IPS, says he targeted Saudi Arabia as a personal challenge. On the one hand, the market there is specific and difficult to access. On the other, the client is the world's largest oil and gas company. IPS first tried to get in contact with Saudi Aramco seven years ago but without success. "That is a huge structure with 80,000 people and reaching someone who will notice you are very hard," Rangelov says.

This changed in 2014 when IPS's Exeron won the world ees AWARD (electrical energy storage prize) in Germany for the best system for autonomous power supply and storage. The company was then invited to present its technology at Saudi Aramco's headquarters but, as Rangelov says, "for them we were just another best company". The Arab giant had already made many unsuccessful tests and considered RES-based power supply systems to be unreliable.

"They explained to us it was not just a question of power supply and that we had to tackle problems such as the overheating of electronics, damage to batteries from the heat and preventing the access of thieves. Besides, the system should require no service as it is extremely expensive to send a team 300 km into the desert, which meant we could not use filters in the air ventilation system, as they would have to be regularly replaced because of the sand," Rangelov recalls.

When he said they could solve all those problems, Rangelov actually had no idea how that would happen. "But I was confident that our R&D team would do it because we have not had a failure so far," he adds. In the end, Saudi Aramco decided to give them a try.

The development of all those solutions took IPS two years. Instead of a standard air conditioning system with a compressor IPS made an innovative cooling system with semiconductors, developed systems for air filtering without filters and made an electromagnetic locking system for the equipment container so that it could only be opened with an access code. It also solved the high-temperature issue by using military-standard electronics that can work at 80 degrees Celsius without cooling and extended the battery life by 50%.

The first site where the system was installed was in the Safania area, where the temperature reaches 56 or 57 degrees in summer. The project was cathodic protection of pipes against corrosion: power is generated during the day and stored for the night so that there can be a constant supply of electric current to prevent rusting.

"All the managers came to see it, because the system really worked," Rangelov says. Three years later, it continues to perform excellently. "We have had no failure and no-one services it, so that saves substantial expenses for Aramco," he explains.

Key contract

The success of the first project opened the door to other projects in Saudi Arabia for IPS. The key contract was awarded less than a year ago: the company was assigned the development of a system for power supply of three wells for unconventional gas. The problem of such deposits is that they are numerous but their reserves are small - three to five years - which makes the construction of a power-transmission system too expensive. The alternative had been to use diesel generators for power supply. Renewable sources had been considered unreliable, as the wells are strategic sites for the kingdom. After IPS's technology was successfully applied for cathodic protection, however, Aramco's views changed and it decided to try the technology for the wells.

In 2014 IPS’s Exeron won the world ees AWARD (electrical energy storage prize) in Germany for the best system for autonomous power supply and storage |
Photographer: НАДЕЖДА ЧИПЕВА

Thus, a couple of months ago, the first three wells supplied with electricity by Exeron started operating in Saudi Arabia. The very systems for the desert were called Nomaad. They include solar panels and ten containers with equipment that have mirrors outside to reflect sunlight and reduce heat inside. An additional effect is that the mirrors make the containers "disappear" in the sand. "We use 2-megawatt-hour batteries for a site, which is a huge storage capacity that can cover consumption for five days if there is no sun," Rangelov explains. The system is managed remotely from Aramco's office. "They are all very happy now and the project recognized as of national importance," he says.

Now the oil and gas company is awarding IPS contracts to equip more wells with its technology. The projects have to be completed by 2021 and the value of the framework agreement is $53 million. That in practice opens many opportunities to the Bulgarian company since all future wells will rely on this type of system. There are about 2,000 unconventional gas deposits discovered so far and explorations are continuing.

Working in the desert

The very construction in the desert was an interesting experience for the Bulgarian team. The site was two hours' drive from the nearest town and the team travelled every day in both directions. Work started at 5.30 a.m. because the heat was too intense in the afternoon and everyone was dressed in special protective clothing.

"You feel as if you are in a sauna. In the beginning, my colleagues did not want to go there but now they call it a super wellness spot, like the food, it is very healthy, there is no alcohol, the daily routine is very strict and when you add the "sauna", one gets cleaned," Rangelov jokes. The installation of the equipment on a site takes between six and eight weeks.

Production

IPS is a family company established by the father, Stoil Trifonov. Together with two of the oldest employees of the company Trifonov is the brains of the R&D department, which comprises 7 people out of 90 employed in the company. Rangelov is proud that "for 30 years in business there has never been a case when I promise something and we do not deliver". Thanks to this the company already has more than 6,000 software and hardware products developed: system solutions, structural solutions for metal parts, electronics, to name a few. IPS is currently developing new projects in the field of smart grids and already has a patent in the United States.

The production and assembly of IPS' systems are currently organized in Sofia but the new products for Saudi Arabia will be manufactured in the new plant in Kardjali, in southern Bulgaria. Its construction was just recently completed and the plant will be equipped and start operating by the end of the year. The investment amounts to some 18 million levs and the facility will employ 60 people. However, the company may abandon its plans for expansion there, as it is now setting up a production facility in Saudi Arabia, where it will obviously focus a lot of its efforts in the coming years. Generous government subsidies for such projects are an additional bonus.

Next stage of growth

Besides the new contracts, the breakthrough in Saudi Arabia is bringing additional benefits to IPS. Thanks to the reference there the company has been already invited to provide energy supply to oil wells for Santos in Australia, as well as to some sites of Abu Dhabi National Oil Company (ADNOC). In Rangelov's words, Saudi Aramco is a top reference and when it tests and accepts a technology, all other companies trust it.

The growing volume of orders is the reason why IPS is already looking for a partner to work with. "We are a small team and given the strong interest in our products at present, we will lose the market if we do not find a global partner that has the offices and local structures," Rangelov says.

Besides his family, shareholders in IPS include two VC funds, BlackPeak Capital and PostScriptum, which hold among them 27%. Greece's Mytilineos group holds 10%. The entry of a new partner will allow the company to grow further.

Meet International Power Supply (IPS), a Bulgarian family firm that has virtually no projects in Bulgaria but is known in nearly 60 other countries. Its main product, the Exeron system, provides independent power supply for remote sites, using renewable sources of energy.

Though it sounds simple, the latest project of the company is not only a market advance but also a technological breakthrough in this area. IPS recently finished a project to supply power to three natural gas wells of Saudi Aramco, which is the first such technological application in the world. The successful completion of the project for the world's largest oil and gas company opens unlimited opportunities for IPS.

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