INNOVATION / More high-tech entrepreneurs in the sector are looking to Houston rather than Austin or Silicon Valley/ Local startups energized

By BRAD HEM
Staff

A common complaint among people in Houston technology circles is that startup companies in the area often leave town for Austin, Silicon Valley or other places with more extensive tech histories.

Just the opposite is true when it comes to innovative startups in the energy sector, which is responsible for luring dozens of entrepreneurs here.

More have been coming because high oil prices have sparked interest in finding more efficient ways to extract and refine it, or find alternate energy forms, said Walter Ulrich, president of the Houston Technology Center, a business accelerator for startups.

Most of the center's client companies are in the energy field, he said.

"It is truly advantageous that so many of the big oil companies are located here," Ulrich said. "There's been a distinct increase in innovation in energy."

Steve Catha said he moved his Smart Pipe Co. here from New Orleans a few years ago because "this is where the activity is."

Houston is home not only to the company's potential customers but also to investors who helped get Smart Pipe going. In Houston, Smart Pipe first received $6 million from angel investors to build a factory and develop a prototype. The company later got $10 million from Kenda Capital, the manager of Shell Technology Ventures' investment fund, to make some upgrades, start computer analysis and get the company ready for business.

Smart Pipe produces polyethylene pipes wrapped in ballistic-grade fabric and fiberoptic sensors. The product, designed to stop leaks, is folded into a semicircle and pulled through an existing pipeline from a single entry point.

Once in place, Smart Pipe pressurizes the line, causing the new pipe liner to expand to a cylindrical shape and fit flush against the old pipe. The new pipe can handle pressure up to 2,000 pounds per square inch, Catha said.

The embedded fiber optics report problems with the line in real time.

"If someone were to hit it with a backhoe or something, it would tell the operator instantaneously," Catha said.

The product is especially useful to repair damaged pipelines in urban or environmentally sensitive areas where excavating an entire section of pipeline would be extremely extensive or disruptive, he said.

Smart Pipe can produce the new pipe liner on site at the rate of one mile per day.

It's an expensive process, Catha said. The company is considering a 45-mile repair job that would cost $60 million, he said.

The need to be near oil and gas companies also prompted S2S Systems to move to Houston in 2002. The company's founder created software that could report live data about an oil field while it was being drilled. The only problem was he was in Seattle.

Not exactly oil country.

"He realized pretty early on that if he was producing oil and gas software, he needed to be in Houston," Chief Operating Officer Stuart Jackson said. So the pair created a Houston-based S2S Systems and transferred the assets here.

Jackson credited the Houston Technology Center for helping the company develop industry contacts, the kind of relationship-building city officials touted when the center was launched nine years ago.

"They've opened up a lot of doors for us," Jackson said.

Author: Stephen Catha
Phone: (832) 476-9287
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Category: client companies | Sub Category: energy