Archive for category: General News

Dubai needs to halt all new home construction for one or two years to avert an economic disaster brought on by continued oversupply, according to one of its biggest builders.

“We’re entering a crossroads now,” Damac Properties PJSC Chairman Hussain Sajwani said in a Bloomberg interview. “Either we fix this problem and we can grow from here or we are going to see a disaster.”

Damac’s chairman is the latest executive to call for curbs on construction in a market that’s been on a downward trajectory since it peaked five years ago. The slump has defied all predictions of a rebound as house prices fell around 30%. About 30,000 new homes will be built this year, twice the demand in the Gulf city, property broker JLL estimates.

Damac has dramatically reduced new sales in the past two years and will focus on selling the properties in its inventory, Sajwani said. Still, the developer will complete 4,000 homes this year and another 6,000 in 2020.

“All we need is just to freeze the supply,” Sajwani said. “Reduce it for a year, maybe 18 months, maybe 2 years,” he said.

Bank Risks

Sajwani warned that ignoring the oversupply could spell trouble for the city’s banks. The declining value of homes would inevitably lead to growing bad loans and higher provisions against default, hitting profitability. Dubai has recently created a committee to limit supply and ensure that private developers operate in fair environment.

“The domino effect is ridiculous because Dubai’s economy relies on property heavily,” he said.

Sajwani pointed at his competitor Emaar Properties PJSC as the main culprit in the oversupply and said the company offers payment plans that encourage speculation. The majority of other big developers, including Meraas Holding LLC and Nakheel PJSC, have halted new construction or cut it back by about 80%, while Emaar continues to “dump” properties on the market, he said.

Damac’s share price has fallen 40% this year and the company won’t pay dividend this year because profitability is down. Sajwani said he prefers to keep the cash in the company to meet financial obligations.

Emaar, which built the world’s tallest tower in Dubai, declined to comment.

Emaar’s website shows a long list of its latest developments, including Arabian Ranches III, Dubai Creek Harbour and Emaar South. The developer has also joined forces with divisions of state-owned builders. Dubai’s government owns about 29% of Emaar.

Source: Bloomberg

In an interview with ‘Development Finance Today’, Innes Smith, chief executive officer at Springfield Properties (pictured above), highlights the future challenges facing housebuilders, how Springfield Properties incorporates modern methods of construction and the current state of development funding.

How do you assess the current development funding space as an experienced housebuilder? Is it difficult to access funding?

We have raised funds from a variety of sources to support our developments. The key is to have the confidence of both investors and lenders. It is also important that market dynamics continue to favour housebuilders. Listing on the London Stock Exchange in 2017 meant we could access new capital. We raised £25m at the float and a further £15m from the public markets a year later to accelerate our growth, particularly through the development of our large-scale village sites and the acquisitions of Dawn Homes and Walker Group. But we also use borrowing facilities. This demonstrates not only readily available funding, but also a versatility in accessing funding in ways that will best unlock value for our shareholders.

What is the main obstacle to reaching the Scottish government’s goal of 50,000 affordable houses in the five years to 2021?  

The target of 50,000 more affordable homes over five years to 2021 is ambitious, but achievable. To build more affordable and private homes we need to get the planning system right. In some places, it is too slow and acts as a drag on housebuilding. We are seeing some signs of improvement and believe an efficient planning system will stimulate the industry and the economy. We also need to make sure the industry has a steady supply of skilled workers, which is why Springfield has put so much focus on education and training. We currently have 22% of our staff in further education or working through an apprenticeship with Springfield.

What are the biggest challenges for housebuilders in 2019?

There is a great deal of speculation about the wider economic outlook in 2019, and both in the UK and globally there are trends and geopolitical tensions that present economic uncertainty. There is a lot of debate about the impact that Brexit might have, in whatever form it takes. So far, Brexit has not been a major issue for the Scottish housing market. Our focus is on keeping tight control of our costs and building the best homes possible for our customers, whatever the economic conditions. This approach meant we remained profitable during the 2008 downturn and emerged as a market leader. We are confident we will navigate any future uncertainty with equal success.

You recently completed a road made of waste plastic on a housing development. How else are you intending to make your developments more environmentally sustainable?

Springfield has always championed environmentally sustainable building practices. As a matter of course, we look for new ways to improve the environmental credentials of our homes. This ensures the longer-term sustainability of our projects and keeps down fuel bills for owners over the lifetime of the property.

We were also one of the first UK volume housebuilders to begin to include charging cables for electric car charging points as standard in our homes, making charging point installation easier for homeowners in the future. Air source heat pumps or energy-efficient boilers with gas saver units are used to heat homes, saving fuel and keeping running costs low. We even fit light tunnels in some of our homes to reduce the need for electrical lights to be used in hallways during the day, which also helps to keep running costs low.

On a wider scale, electric charging points have been installed at our offices, plastic use is discouraged, recycling is promoted in the offices and has been reviewed on site, resulting in a reduction in waste sent to landfill. These are great examples of innovation in the ongoing pursuit of our environmental goals.

Do you have any interest in incorporating modern methods of construction into your future developments?

We build energy-efficient and high-quality homes for our customers. This requires constant innovation to be sure we are building the best homes possible. We use timber-frame construction, which we believe is the most sustainable method of building. It also allows us to manufacture precision-engineered kits in our own factory, it saves time on site and reduces costs for customers. We’ve recently improved the functionality of our kit factory in Elgin, which has increased production and efficiency.

We’ve added three more workstations, bringing the total to nine, installed a computerised saw and new air extraction system. We’ve also formed new walkways that have improved the flow of materials and workers around the factory. These improvements have increased the productivity potential of each workstation.

Our use of new technology is not restricted to construction. Through our Choices service, customers are provided with an online interactive opportunity to tailor their home to suit their needs, including high-quality kitchens and even the choice of an open or closed plan layout. By adopting modern methods on and off site, we can deliver the highest levels of consumer choice and the highest standards of construction.

How did you get into the industry?

As a youngster, I considered going into architecture for a time, so I guess I’ve always had an interest in building in one way or another. I started my career as an accountant, but for me it has always been more than just about the numbers. After graduating from Heriot-Watt University, I qualified as a chartered accountant with KPMG and then worked in a variety of industries, including engineering, aquaculture and carbon fibre manufacturing. I jumped at the chance to join Springfield. It’s a very ambitious company in a fascinating and important industry. Homes are a central part of people’s lives and building is a crucial part of our economy. Moving from financial director to chief executive felt like a natural progression. I enjoy seeing the bigger picture and how we work with customers, employees, investors and local authorities.

If you weren’t in the industry, what would you be doing?

Spending time with my wife and two children, getting out on the golf course and improving my guitar playing!

Source: Development Today

By JP Casey

As the offshore industry’s carbon footprint continues to grow, more subsea companies are looking to partial and total electrification as a means to cut costs and reduce environmental impacts. JP Casey looks at four electrification projects in the subsea sector.

In 2017, Oil & Gas UK reported that the UK offshore industry’s carbon footprint had grown, with upstream operations producing 15.7 million tonnes of CO₂, a 7% increase on 2016 figures. Meanwhile, Shell reported an increase in operating expenses from $9.7bn in the first quarter of 2018 to $10.2bn in the year’s final three months, raising both environmental and financial concerns about the sustainability of offshore operations.

This uncertainty has encouraged offshore companies to invest in cleaner, more efficient technologies, from sealed underwater cables to repair tools. Total has led the way in electrification, unveiling the world’s first all-electric subsea operation three years ago, and could prove to be an example for others in the industry to follow.

Total’s K5F-3 well

Following over a decade of research and development, and eight years of effective electrified Christmas tree valve operation, the K5F-3 well began commercial production in 2016. Located in the North Sea, Total is hopeful that the well will deliver a number of benefits, beginning with financial savings. The company claims that the construction of all-electric wells will reduce capital expenditure costs by up to 40% compared to traditional wells, and while the Aberdeen branch of the Society of Petroleum Engineers reported in 2017 that the well had secured savings of up to just 15%, this remains a positive development.

The well also boasts a number of safety benefits. In traditional wells, hydraulic fluid flows from a facility above the surface of the water into a subsea well through specialised pipes, which is used to power the well’s hydraulic equipment, which pumps the oil back to the surface. By electrifying the system, high-pressure equipment such as the hydraulic pipes are removed, reducing the risk of explosions arising from faulty pipes, and eliminates the threat of a pipe leaking, and spilling hydraulic fluid into the surrounding ocean.

All of the component parts of the K5F-3 well have been tested up to depths of 3km below the surface, and Total is hopeful that the system will become the industry standard for subsea wells at that depth.

ABB’s INSUBSEA system

While Total has been able to develop its own bespoke all-electric well, equipment manufacturer ABB has worked to develop solutions that can be applied to a number of rigs and facilities across the offshore industry. The company’s INSUBSEA system is an attempt to supply reliable electric power to oil and gas reservoirs, which the company notes are found increasing distances and depths from shore and surface; the system consists of compressors and pumps built on the seabed up to 150km from topside infrastructure, which can supply power over greater distances than conventional cables.

The system has been effectively deployed at the Statoil-owned Åsgard project off the Norwegian coast, which relies on INSUBSEA for its power. The system transfers 15MVA at 189Hz over a distance of 43km, setting world records for distance, voltage and frequency between a seabed compressor and a floating facility. The entire Åsgard oil field has the capacity to produce up to 200,000 barrels of oil per day and the use of the INSUBSEA system demonstrates the effectiveness of electrified solutions at large-scale operations.

ABB’s system can also be used to reduce operational costs related to heating. A combination of low temperatures and high pressures in subsea pipes can lead to the formation of wax and hydrates, which block the pipes. ABB reports that the petroleum industry spends over $700m a year dealing with these blockages; by using an electrified system, ABB can prevent the formation of these blockers, cutting this cost without the use of potentially dangerous chemicals.

Oceaneering and electrified tools

Based in the US, engineering services company Oceaneering is electrifying individual operations to improve its operational efficiency and environmental performance. The company has discussed a number of electrical tools, including manipulator arms, torque tools, cutting and cleaning equipment and sensors and probes, as it moves towards electrification of its equipment.

By the end of 2018, Oceaneering’s fleet of 275 remotely-operated vehicles (ROVs) comprised around one quarter of the offshore industry’s work-class vehicles, so moves towards electrification could have a significant impact on the offshore industry as a whole.

However, the company’s recent financial struggles could hinder future electrification efforts, with Oceaneering’s annual reports noting that the firm’s 2017 net income of $1.7m fell to a net loss of $2.1m in 2018. This was primarily caused by what president and CEO Roderick A Larson called a decline in ‘fleet utilisation’, with just 56% of the ROVs used in the third quarter of 2018, and 52% in the fourth quarter, and should the company have to cut operating costs, it is unlikely it will invest considerably in electrification.

Blue Logic’s Subsea USB cables

Norwegian manufacturer Blue Logic provides a number of cables known as the Subsea USB connectors, as part of its electrical interface range of products. All of the connecting components of the cables are sealed inside an external housing, dramatically minimising the risk of short circuits and corrosion arising from components being in contact with water. The company also claims its ‘inductive transfer technology’ can improve the operational lifespan of the connectors by removing limits on the number of times the components can be disconnected and reconnected.

The cables come in three variants, dubbed A, B, and C, each a different size and providing different volumes of power. The C model, for instance, can deliver up to two kilowatts of power, alongside an 80mbps Ethernet connection for communication, compared to the A model, which can provide up to 60 watts of power. However, the A model is completely sealed from seawater, and so impossible to short circuit and completely corrosion-resistant.

The products are in keeping with the company’s ‘one subsea world’ vision, in which equipment and systems are standardised across the company, so components can work effectively with a range of other systems. While the company lacks the financial muscle to develop large-scale solutions or bespoke rigs, the cables provide a versatile and effective way of improving the performance and efficiency of subsea power transfer.

Source: Offshore Technology

MIT researchers develop emissions-free cement production process

Massachusetts Institute of Technology (MIT) researchers have demonstrated an experimental way of manufacturing cement that releases no carbon dioxide into the atmosphere.

Currently, the production of cement for concrete accounts for about eight per cent of global greenhouse gas emissions, leading to calls for architects to stop using it.

However MIT’s materials scientists are exploring compromise solutions, including one that they consider “an important first step” towards more sustainable cement.

Their process incorporates an electrochemical method that means that, although carbon dioxide is still produced, it is able to be cleanly captured, so that no emissions enter the environment.

Process captures carbon dioxide emissions 

 A team led by MIT engineer Yet-Ming Chiang team tackled the problem of carbon dioxide emissions at the two points in the cement manufacturing process where they arise: from the burning of coal to create the necessary high heats, and from the gases released during the resulting chemical reaction.

Tackling the first source of CO2 was simply a matter of using electricity from renewable sources — sources that they note are increasingly the lowest-cost option.

The second source of CO2 involved a more novel approach of using an electrolyser to convert the limestone’s calcium carbonate into calcium hydroxide.

Captured CO2 could be used to make fizzy drinks

With this change, the CO2 comes out as a concentrated gas stream that can be easily separated and sequestered. It can be used for products such as liquid fuel or to carbonate beverages.

The CO2 created by current cement production is too contaminated to be used in this way.

The MIT team’s process produces the same Portland cement that is already commonly used around the world. The team wanted to avoid making a new type of cement, knowing it would take a long amount of time for an unknown material to gain acceptance.

In recent years, materials scientists have proposed greener concrete alternatives made with substances including desert sand, nano platelets and human urine.

Small-scale change could be implemented quickly

MIT’s process, if scaled up, is a smaller change that the team think could be implemented more quickly.

They point out that the number of buildings worldwide is expected to double by 2060, producing the equivalent of one new New York City every 30 days.

“How do you penetrate an industry like that and get a foot in the door?” asked Leah Ellis, a postdoctoral researcher and the lead author on a paper about the project, which argues for change “in a stepwise fashion”.

However, experts and activists at the Architecture of Emergency climate summit in London last month said there wasn’t time to redesign concrete and instead urged architects to swap the material for timber.

“If we invented concrete today, nobody would think it was a good idea,” said Michael Ramage, an architectural engineer and University of Cambridge academic.

Commenting on the MIT research Bernard Kennedy, Technical Director at FLI Carlow said,

“Any process which provides the concrete industry with low-carbon alternatives to conventional OPC (Ordinary Portland Cement) is a welcome addition to meeting our customers aspirations for a greener environment.  The claim of the MIT research team of producing identical OPC using novel methods requiring less energy and producing useful CO2 is especially valuable.

 Contrary to the perception that OPC and therefore concrete is not a clean material, its durability, natural resistance to most chemicals, self-healing capabilities in water retaining applications, long service life and complete recyclability have made it ubiquitous in the built environment.  Concrete is analogous to rock, the building material of our planet and  CO2 is a valuable commodity when controlled.   While there are new cement substitutes under development, experience in the manufacture, construction and application of OPC concrete has enormous value and it would be wasteful to dismiss in pursuit of possibly less versatile substitutes meeting discrete metrics only.

 Combined with manufacture using clean energy sources, the development of chemical processes producing OPC and useful CO2 is a win-win scenario adding significantly to society’s need for a clean environment and quality infrastructure”. 

FLI Carlow are at the forefront of large offsite fabrication technology and have undertaken responsibility for the design, manufacture, delivery and installation of some of the largest infrastructural projects in the UK.