08/01/2008

Smart solution for remote monitoring of underground pipelines

A dynamic young company that has developed sophisticated technology to monitor the condition of underground pipelines remotely has won two new highly prestigious contracts and expanded into new premises.


Abriox Ltd, which has now established its international headquarters in Imperial House, Newport, has been awarded the contract to install its Merlin Cathodic Protection (CP) monitoring systems on National Grid’s new natural gas pipeline in Wales. It has also won a contract with United Utilities to supply the system to Northern Gas Networks.

The company has recently set up its US headquarters in El Paso and Merlin CP systems have already been installed on a water utility CP system in the south west and on a crude oil pipeline in the mid west. With support from SMARTCymru, £125,000 investment from Finance Wales and a funding package from The Royal Bank of Scotland (RBS), Abriox has spent the last two years designing and testing its unique systems that monitor the condition of underground metal pipelines carrying petrochemicals and hydrocarbons.

Pipeline operators use cathodic protection (CP) to prevent pipes rusting underground by applying a low voltage to the pipeline to counteract the natural electrolytic corrosion reaction that occurs when metal comes into contact with the soil. Damage to the pipes can occur if the level of voltage is too high or too low. The Merlin CP system checks that the correct voltage is applied and the correct current maintained throughout the length of the pipeline. The system identifies any problems and issues an immediate alert pinpointing the specific problem area which eliminates the need for regular manual inspections. All data is automatically monitored and fed through to a central HQ, providing timely information to ensure pipelines can be constantly maintained in good condition.

Ieuan Wyn Jones, Minister for the Economy and Transport, said the funding support package had been essential in helping Abriox develop an innovative new product and take it to market. “Abriox is a technology led company with high growth potential and the support offered by the Assembly Government and Finance Wales illustrates how we can assist businesses and dynamic young enterprises to help them turn their ideas into commercial reality.”

Funding from SMARTCymru, which supports the research, development and exploitation of technologically innovative products and processes, was provided at each stage of the development from the initial technical and commercial feasibility research through to commercialisation.

In total the company received more than £126,000 from SMARTCymru and also benefited from the services of Innovation Technology Counsellor, Jon Merrey, who assisted with issues such as product design, prototyping, intellectual property and product testing Finance Wales, which provides commercial funding to small and medium-sized businesses in Wales, tailored an investment package for Abriox having previously provided two rounds of debt finance. The company has also worked with Relationship Manager, Conor Barrett from the RBS commercial banking team in Cardiff, which has provided a bespoke finance solution to support the growth of the company.

Managing Director Neil Summers described the recent contracts as an important break through following extensive trials. “The LNG contract is particularly significant because the pipeline crosses areas of outstanding natural beauty as well as several national parks. It is vital that the integrity of the pipeline is protected and this will be the first major pipeline that has been monitored in this way. The support of SMARTCymru was absolutely essential for us from day one when we carried out the first technical feasibility project which enabled us to identify a gap in the market while the investment from Finance Wales has ensured the continued development of Abriox and our products from prototype to final product. I am also grateful to Conor Barrett at RBS who by really understanding our business needs has provided a tailored funding package.”

There is a huge potential market for Merlin CP systems as there are approximately 11,000 miles of gas transmission pipeline in the UK alone, many of which are located in inaccessible areas requiring considerable manpower to carryout the necessary functional and operational checks. The potential market in the UK and USA is estimated to be worth up to £100million and Abriox aims to capture 30-40 per cent of the UK market and between 4-5 per cent of the UK market within the next three years.

Karen Davies, Investment Executive at Finance Wales, said Abriox was a good example of a high growth business taking advantage of its global potential. “Abriox has grown rapidly, placing substantial investment into its research and development and working closely with potential customers. The investment from Finance Wales came at a critical time to allow the company to move forward with its global expansion plans.”

Conor Barrett, Relationship Manager, RBS commented: “I am delighted to see Abriox being so successful with new contract wins and have been impressed with the management team’s business acumen, which has been a key factor in driving growth for this company forward. I look forward to continuing to work with the team as they expand the business in the future.”