Upstream Oil & Gas Market
by Jason Carnovale

Demand for corrosion inhibitors in oil and gas operations is projected to rise 3.4 percent per annum to $460 million in 2020. This growth will reflect a recovery from the downturn in oil prices and drilling activity during 2015 and 2016 as prices recover. However, advances in corrosion inhibitor demand will remain much slower than those realized between 2005 and 2014.

Oil and gas drilling and completion involve the use of large amounts of fluids—such as drilling, completion and hydraulic fracturing fluids—that are blended at the surface and pumped into the wellbore.

These fluids are generally water-based and may contain salt, acids, and other additives or contaminants that can lead to corrosion of steel pipes and other equipment. Of these fluids, hydraulic fracturing fluids are used in the greatest volume and account for the largest fraction of corrosion inhibitors.

In addition to their use in drilling and completion, corrosion inhibitors are also important in production applications. Produced oil and gas usually contain a large amount of water, which carries high loadings of dissolved salts and other solids that can lead to corrosion of steel pipes and storage tanks.

corrosion inhibitors tableTable 1. Oil and gas production market for corrosion inhibitors (million dollars)

When corrosion is expected, inhibitors can be injected at the bottom of the wellbore, where they adhere to metal surfaces and provide protection for a period of time before they need to be added once again. The majority of corrosion inhibitors used in oil and gas production are organics such as amines, azoles, fatty acids and other natural oils. However, phosphonates and some borates are also used in water treatment applications.

Organic corrosion inhibitors are the most widely used in the oil and gas industry. They are incorporated into drilling and hydraulic fracturing fluids and are injected downhole after well completion to protect steel tubulars (e.g., well casing and tubing) from corrosion. Phosphonates are the second largest product used, though far behind organics, because of their ability to work well in drilling fluids that have high
levels of mineralization and corrosively active oxygen.

One emerging area of opportunity for corrosion inhibitors is in produced water treatment and recycling. Currently, only a fairly small fraction of water produced from oil and gas formations, along with the hydrocarbons being gathered, is treated and recycled.

The majority of this water is too high in contaminants, such as dissolved solids, to be economically reused, and instead it is usually reinjected underground. However, increasing attention to the possibility for induced seismicity (earthquakes due to water injection), especially in Oklahoma, is expected to drive increased use of treatment and recycling of this water.