Plexus product gets Russian deployment via licensee Gusar

Oil and gas engineering services business Plexus Holdings announced on Thursday that its Russian licensee, Gusevsky Valves Plant (Gusar), has entered into an initial agreement to supply Gazprom with two sets of its ‘Tersus TRT Mudline Suspension System’ (MLS) products for the construction of shallow water exploration gas wells on the Kara Sea Shelf in 2019.

The AIM-traded company said Gusar was in the process of localising the manufacturing of Plexus' MLS equipment under terms of a licence from Plexus.

It said the value of the initial order was in line with similar rates achieved in the UK Continental Shelf.

Plexus said the MLS order was the first breakthrough order secured by Gusar for the Russian and CIS market, and was in line with its strategy to establish its “best in class equipment” in Russia - a top three hydrocarbon producer in the world with “significant” gas reserves.

The order followed the sale by Plexus of its MLS equipment to Gusar in April last year, to assist in demonstrating to Russian operators the benefits and advantages of its proprietary system.

It also followed the agreed sale by Plexus to Gusar of two POS-GRIP 18-3/4" rental wellhead sets and associated equipment and tooling for around £1.4m in February, which it said would form the basis of Gusar's POS-GRIP rental exploration wellhead inventory.

“Following today's announcement, Plexus' MLS equipment will soon be deployed in the huge Russian market which, due to the level of upcoming gas drilling activity, represents a major commercial opportunity for Plexus, and its licensee Gusar,” said Plexus chief executive officer Ben Van Bilderbeek.

“Furthermore, with gas being targeted in the current shallow water campaign, it is clearly imperative that the best equipment is deployed to ensure drilling operations are completed safely and that gas leaks are avoided.

“Thanks to the superior qualities of our POS-GRIP wellhead and gas-seal technology, which has raised standards in high pressure/high temperature jack-up exploration drilling, we are confident our equipment will play an increasingly important role in this programme.”

Van Bilderbeek said the Commonwealth of Independent States was a “key target market” for Plexus.

“This is not just down to the vast volumes of hydrocarbon reserves it holds and the importance of gas within the country's energy mix, but also because the CIS provides a readymade example of the licensing model that lies at the centre of our strategy post the sale of our jack-up exploration business to FMC Technologies, excluding the CIS.

“Thanks to our growing suite of POS GRIP- based products, including production wellheads (both surface and subsea), and connector technology for abandonment operations such as our POS-SET Connector, there is scope for Plexus to build a portfolio of licensing agreements with key partners covering specific geographies and products, each generating a revenue stream through royalties earned on equipment rented out or sold.”

“This is an exciting stage in Plexus' development, and I look forward to providing further updates on our progress as we focus on positioning Plexus as the provider of superior enabling technology for the energy sector at a time when there is an increased focus on the need to address for example methane leaks where we believe that metal-to-metal seals are essential and which need to be scientifically proven to have verified integrity.”