Archrock Inc. expects to grow its contract compression fleet by up to 11% this year, company officials said when releasing fourth quarter 2018 earnings.
Net income for the period was US$13 million compared to US$49.1 million in the fourth quarter of 2017. For all of 2018, net income grew 58% to US$29.2 million.
Archrock expanded its operating fleet 65,000 hp (48.5 MW) in the fourth quarter and 277,000 hp (206.5 MW) for the year, bringing it to 3.5 million hp (2610 MW), compared to 3.3 million hp (2461 MW) at the end of 2017. Utilization on Dec. 31 was 89% compared to 84% a year earlier.
Brad Childers, president and CEO, said Archrock plans to spend US$250-US$300 million this year to expand its fleet another 285,000 to 385,000 hp (212.5 to 287 MW) and already has ordered 250,000 hp (186 MW).
He said most of that would be large horsepower units, which had 91% utilization in the second half of 2018. The use of smaller horsepower units improved to 84% at yearend, up from 80% at the end of 2017, driven by higher gas lift activity.
“There is more demand in the market than we are meeting,” Childers said. “We are definitely trying to work with our key core customers to meet their needs, but we are not satisfying all the demand for capital and equipment that we could entertain with new customers in the marketplace today.”
Archrock raised the rentals for more than half of its active fleet in January and will seek increases for the balance this year.
Childers said the large-scale build-out of liquefied natural gas export facilities has changed the landscape for the gas business, necessitating significant investments in new compression.