Compact Rig Market Continues to Shine for HDD
The compact drill rig market in 2018 remains an incredibly busy and steadying segment of the horizontal directional drilling (HDD) industry, with a bright outlook in both the short- and long-term, say industry insiders.
The sustained tidal wave of fiber and telecom deployments remain key to the small rig market’s strength, as the demand for more bandwidth, more speed and more power continue to drive this vibrant market. Other compact rig market drivers include natural gas rehab work, as well as utility projects — an area where small, yet powerful, drill rigs are needed but with a lighter footprint.
Contractors look to bolster their rig fleets with the latest and greatest rigs available and manufacturers have shown they are up to the task, as seen with new compact models unveiled at the recent ICUEE show in October. Contractors want — to quote Tim Allen’s character Tim “the Tool Man” Taylor on “Home Improvement” — more power. But they also want flexibility and a light footprint to get in and get out of a jobsite and on to the next.
“Just with the amount of fiber being installed over the past two to three years, we have seen an increase in the demand for these smaller drills to help supplement contractor fleets,” says TT Technologies vice president of operations Kevin Nagle.
“The state of the compact HDD market is very strong today,” says Ditch Witch HDD category manager Seth Matthesen. “For the past few years, telecommunications projects drove growth in this market. And as increased bandwidth continues to be in high demand, we anticipate growth in the compact HDD market for at least three to five years.”
According to the Fiber Broadband Association, the United States has experienced record growth in fiber deployment: annual U.S. Deployment hit a new record in 2017 passing 35 million homes, a whopping 4.4 million increase in homes marketed — the most-ever in a single year — and a 15 percent growth over the 2016. This recent boom in fiber to the home deployment began in 2011, which coincides with an uptick in the HDD market.
The HDD market has seen this before but not at this sustainability and long-term need. In the late 1990s, when the Internet was really starting to take off, HDD experienced a huge influx of work as the new networks were being constructed. The end of that work coincided with the HDD market bottoming out, taking years to recover. Today, HDD drillers are relishing the upswing in this communications work and know the need is long-term. Drill rig manufacturers such as Vermeer, TT Technologies and Ditch Witch are eager to supply the rigs to meet this increasing demand.
“HDD contractors continue to ask for highly productive drills with more capacity that ever before,” says Vermeer product manager of trenchless products Tod Michael. “They are also want machines that are quiet, comfortable and have a compact footprint to fit into congested locations and minimize disturbance.”
To that end, several new compact rig models were unveiled at ICUEE in October 2017, one of the largest international outdoor equipment shows in North America for utility professionals and construction contractors. From Toro to TT Technologies manufacturers presented contractors with more powerful and efficient drills to use on projects needing a compact drill. Not all contractor rig demands are the same and rig manufacturers continue to meet their needs.
“Some contractors are pushing the envelope on distance, tough ground conditions and trying to get higher footage per day,” Michael says. “These contractors want highly productive drills with additional torque mud and thrust capabilities. Other contractors want a very compact machine.”
And that compact, light footprint combined with additional power is critical. In the past, compact drills had provided the smaller footprint but lacked the capability to drill through tough ground conditions, forcing them to turn to larger rigs. These larger rigs were not ideal for the congested, urban worksites. Today, that is not the case, as these smaller systems are now built for the power contractors crave.
“Maintaining a small footprint and gaining the most horsepower possible are the needs of most contractors using compact HDD rigs. Fiber projects are like any other in one respect: Time is money,” says Ditch Witch product manager, HDD, Jeff Davis, who notes that Ditch Witch’s AT40 All-Terrain drill has 160 gross hp and RockMaster housing with an industry-exclusive, double-layer seal that increases downhole life. Ditch Witch also recently released its JT20XP compact rig, powered by a 74-hp engine, which maximizes the available horsepower for thrust and rotation.
TT Technologies only makes compact size rigs and likes to keep their functionality relatively simple. “A contractor wants a simple, reliable rig that can get them from Point A to Point B efficiently and on target,” Nagle says. “Some of the compact rigs on the market today have a lot of bells and whistles but in the end, it comes down to putting pipe in the ground. [Our] focus is making the contractor successful by providing a small, simple machine with lots of power that can be counted on to get the job done.”
At ICUEE, TT Technologies unveiled its latest compact drill, the Grundopit 6V, which replaces its Grundopit 40/60. This version is a little more automated with longer drill rods and with a little more power. The drill is pit-launched and is made for areas that surface-launched drill can’t navigate, Nagle says, noting it has a lot of power and is made for ultra-tight jobsites.
While fiber/telecom projects are getting all the headlines in HDD circles, another area of growth for the compact rig market is in gas distribution and service. This is a market-segment rooted in the need for communities to address their aging infrastructure. “Like anything, markets fluctuate and right now the compact drill market is in a good place,” Nagle says. “The market, in my estimation, looks to be even a little steadier for the long-term, largely because of the amount utility work being done with these drills. Fiber and telecom will taper off at some point but utility work is and has been a constant source of work for compact directional drills.”
Michael concurs, adding, “Gas line replacement and new build work continues to be strong due to an aging infrastructure and homeowners converting from electric heat to gas because of low natural gas prices.”
At ICUEE 2017, Vermeer unveiled its D8x12 Navigator drill. This new compact and highly productive drill is sized for working in tight spaces, features straightforward controls and delivers quiet operation. With two drill rod options for added versatility, the Vermeer D8x12 is well suited for small service installations, including gas distribution, power, water and telecommunication networks.
Matthesen says the mix of utility work and fiber will keep the compact rig market vibrant in the long term. “The popularity for compact HDD rigs resulted from lower oil prices and a boom in telecommunications projects. While the price of oil remains in its current range and telecom providers remain dedicated to faster speeds and better service to urban communities, that popularity will stay strong.”