What has been described as an industry-first overland “smart conveyor” installation in one of the world’s busiest hydrocarbon producing regions is shaping as a watershed project for an Australian sensor and internet-of-things (IoT) technology firm.
That company, Queensland-based Vayeron, effectively helped reset engineering of the US$400 million Dune Express project of New York Stock Exchange-listed Atlas Energy Solutions with its Smart-Idler technology and IoT platform.
“Typically these conveyors are … maybe 90%-plus reliable,” Atlas CFO John Turner said on a podcast earlier this month.
“We’re utilising new technology to make it more reliable.
“We’re using Smart-Idler technology that incorporates a microchip and that microchip will notify our maintenance teams that the idler is going out before it actually goes out so that we’ll be able to replace idlers before they create additional wear and tear on the belt. We won’t even have to stop the belt [to replace idlers].
“So we’re looking for 96-97% [conveyor] uptime.”
When the Dune Express starts rolling at the end of 2024, Vayeron founder Ryan Norris expects to have further staked out the scale-up’s position in a global conveyor component market worth several billion dollars a year.
The former central Queensland mechanical engineer, who patented the Smart-Idler in 2014 and launched Vayeron three years later, had just returned from a trip to China when InvestMETS.com caught up with him.
“It’s a really ground-breaking project for us,” Norris said.
“The whole industry has got their eyes on this project for a couple of reasons.
“It’s a 67km-long conveyor that’s got [this] cutting-edge technology right the way through it. It’s one of the first use cases of a conveyor system being used to transport frac-sand over long distances in the Permian Basin of Texas. They’re removing over 1000 haulage trucks per day off the roads. Our technology [is] a marquee kind of inclusion on that conveyor system.
“You’ve got to get material from A to B one way or another and conveyors are extensively used as critical infrastructure. Now the focus is starting to move off trucks and up the value stream and through the conveyors and we’re seeing a surge in demand for our technology to make these things smart.”
Atlas Energy Solutions, which raised US$324 million via an initial public offering (IPO) earlier this year, is a large supplier of proppant and logistics services to oil and gas producers in the Permian Basin of west Texas and New Mexico. It says the Dune Express will be the first long-haul proppant conveyor system in the world. As well as lowering transport costs, it is expected to “contribute to a meaningful reduction in Permian Basin traffic accidents, congestion and automobile fatalities”. Texas Department of Transport data indicates the average number of trucking fatalities in the Permian Basin in 2019-2021 increased by 77% versus the 2003-2005 average.
The conveyor design, with a hooded cover and lifts to bridge highways and other structures, has been tested to make sure it withstands high winds and has no fugitive emissions.
Drone survey and conveyor-mounted fibre cable detection of idler wear and failure are other, more expensive and less reliable options available to conveyor designers and owners. The Smart-Idler harvests energy from roller rotation, which means its embedded sensor is virtually maintenance free. The smart device means the idler configuration – in this case only one roller per metre of conveyor – and belt speed can be (and have been) optimised for greater efficiency.
Norris, whose background is in conveyor engineering, says conveyor roller component failure can be “a death by a thousand cuts kind of problem” for operators. “You will find over the course of a year the primary reason the conveyor system was down was because of the lifecycle management and the failure of these components. Through IoT-based type solutions we’re eliminating that as a factor.
“We’re starting to see the advent of AI and machine learning and all these really intricate analytics that take in multiple datasets, and we’re only one of those datasets. But combine it all together and you get a very holistic overview of the performance of the conveyor system, which is often the artery of an operation.
“You build a conveyor, you’ve got idlers; you might as well install those idlers as smart idlers. They’ve got to be installed anyway. Our solution is very easily implemented in that regard. So it just makes a heck of a lot of sense.
“And all the data is back-hauled via a wireless network which we developed. We’ve got a proprietary protocol which optimises how we get the data up and down the conveyor and back to a central collector.”
Vayeron will supply about 70,000 of its devices for the Dune Express via idler maker Syntron Material Handling.
It’s a major deal and Norris says others are in its pipeline. Vayeron has supplied about 25 sites in its short life and will look to significantly scale its manufacturing and inventory management operations to meet future demand from larger projects.
“We are a couple of years away from some of these other huge sort of marquee projects coming through,” Norris said.
Integration agreements with more than 20 international conveyor component manufacturers give Vayeron access to more than one-third of the circa-30 million-a-year heavy industrial roller market, worth about US$2.5 billion a year.
“Our technology is agnostic, so can be embedded within component manufacturers from all around the world,” Norris said.
“We’ve also got the end-users starting to specify the Vayeron solution in projects. We’ve done a couple now where we were hard-spec and the OEMs or the manufacturers have to comply and source our technology in order to bid on the projects.
“Through digitalising rollers, which is what we’re doing, there’s a whole additional market which is the digital insights and the monetisation of the data that smart rollers produce.”
Vayeron has received Queensland Business Development Fund and private high net worth and family office funding. Norris says private equity groups have shown interest in his fast-growing firm.
“We’re quite well financed right now,” he said.
“We’ve obviously always got eyes and ears open, always looking for sources of capital that can fund growth. And really for us growth is in manufacturing and then inventory.
“We have lead-time issues which do constrain our market penetration.
“So improving our supply chain is where a lot of the investment focus needs to go for us.
“We won’t preclude a capital raising if it makes sense.”