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H.C. Price: More than just a pipeline construction company H.C. Price's Alaska division has diversified from laying pipelines to constructing oil field facilities and power plants Alan Bailey PNA Contributing Writer
If adventurous pioneering characterizes life in the Last Frontier, H.C. Price Co. fits right into the Alaska scene. Since its inception in the 1920s, H.C. Price has grown its business through the innovative use of technology and through involvement in groundbreaking engineering projects.
The company's Alaska division has mastered the logistics of working in Alaska's remote wilderness. It has also pioneered the use of new technologies to meet the challenges of engineering in the Arctic. Although it started out as a pipeline construction company, the Alaska division has diversified into the construction of major oil field and power plant facilities.
Growth through innovation The story of H.C. Price dates back to 1921 when Hal Price, a 33-year-old entrepreneur, borrowed the princely sum of $2,500, in order to pursue his pioneering use of electric arc welding. In his first big job, Hal Price repaired the bottom of a 55,000-barrel tank for the Eldorado Pipeline Company.
Although he initially focused on tank construction and repair, Hal Price was anxious to try his new electric welding techniques on pipeline construction.
In 1928 H.C. Price Co. completed the construction of a 169-mile long, 8-inch diameter pipeline from Corsicana to St. Augustine, Texas. Over the following years, the company continued to grow as a major constructor of oil pipelines, establishing its base in Bartesville, Okla.
The use of new and innovative welding techniques drove much of the company's successful early growth. Innovations included shielded arc welding, removable backup rings and the so-called "stove pipe" method of welding around a pipe. H.C. Price also established a reputation for the use of pipeline coating systems for buoyancy control.
As Dave Matthews, of H.C. Price's Alaska division, explained, "That was right at the beginning of the oil boom in Oklahoma and Texas. [Hal Price] pioneered some techniques that provided higher quality, more productive installations for pipelines ... and grew the company from there."
World War II experiences lead company to Alaska H.C. Price put its welding experience to good use during World War II. In one of the company's most important achievements to support the war effort, it built the Big Inch pipeline. This 24-inch oil pipeline delivered fuel oil from the Gulf Coast to naval operations based on the Atlantic seaboard and marked a significant breakthrough in pipeline construction.
In the post-war period, between 1946 and 1971, H.C. Price participated in more than 120 pipeline construction projects in the United States.
H.C. Price's first connection with Alaska occurred as part of its World War II support. In partnership with two other companies, H.C. Price undertook the daunting task of building an oil line across the 1,700 miles of mountain and wilderness between Fort Norman, Northwest Territories, and Whitehorse in the Yukon.
H.C. Price first established a division in Alaska in 1975, when it participated in the construction of the 800-mile trans-Alaska oil pipeline from Prudhoe Bay to Valdez. H.C. Price built section three of the pipeline, a 144-mile stretch from the Yukon River to Fairbanks.
One unusual feature of section three is that it crosses two fault zones. As a consequence, earthquakes threatened the pipeline structure.
"The engineers were expecting the earth to move there, so they brought the pipeline up above ground," said Matthews. "That's the only place in the line where it's placed on sleepers." The flexibility of the pipe would enable it to move on the sleepers during an earthquake, whereas a rigid fixture could cause a rupture.
Testing the pipeline was critical. Although the construction teams carefully x-rayed all of the welds between pipe sections, crews also had to ensure the overall integrity of the structure - rough handling during transportation or installation could have damaged the pipe sections. The crews tested for leaks by pumping water down the pipeline.
The mountainous terrain north of Fairbanks caused problems with this so-called hydro testing: where the pipeline went down a gradient, a large head of water could build up.
"You have to be pretty sophisticated in your planning on hydro test sections, because you can over-pressurize the pipe if you have too long of a section and too large of a gradient," Matthews said. The high water pressure can also jeopardize the safe removal of the water after the tests are completed.
A famous incident at Hess Creek illustrates the risks of hydro testing in hilly country. A water surge shot through the pipeline on a hillside. When the slug of water hit the bottom of the hill, it lifted the pipeline into the air. The 48-inch-diameter pipe writhed about like a piece of loose spaghetti before dropping back to the ground.
H.C. Price completed construction of section three of the pipeline in the fall of 1976, at a cost of about $100 million.
"When all dollars got added up and divided into the miles of the pipeline, our section was recognized as the lowest-cost section," Matthews said.
North Slope pipelines H.C. Price successfully fended off competition during the early years of Prudhoe Bay.
From a technical perspective, H.C. Price could build on its long history of innovation in pipeline construction. In particular, figuring out Arctic techniques proved a key to success.
"It used be thought that you could do work more productively and cheaper in the summertime," said Matthews, "but you do it at a tremendous expense to the environment." Matthews explained that the main problem during the summer months was the need for gravel to build work sites off the tundra.
Working from ice pads during the winter eliminated the cost of mining and moving of gravel. However, engineers had to modify or develop equipment that could withstand winter temperatures. The company also had to devise working techniques and shelters that would enable crews to operate effectively and safely in extreme cold.
As well as constructing new pipelines, H.C. Price inspected and maintained existing pipelines. The company contributed to the pioneering of the use of video cameras on robots in order to inspect the insides of pipes.
First to use automated welding One of H.C. Price's most notable technical innovations appeared in 1994, with the first use of automated welding in the United States. The automated technique proved necessary for the construction of pipelines in ARCO Alaska Inc.'s Point McIntyre field. H.C. Price teamed up with CRC-Evans, the manufacturer of the welding equipment.
The use of stainless-steel drove the need for automated welding: ARCO had decided to use duplex stainless-steel for the Point McIntyre pipelines in order to combat corrosion. However, welding stainless steel is much more difficult than welding ordinary carbon steel. When done manually, the welder has to work uphill rather than downhill; the welder also has to protect the joint with shielding gas in order to prevent impurities from weakening the weld. These complications drive up the cost.
"Automation not only improves the potential quality of the weld by taking the human element out of it somewhat, but it brings the cost down too," said Matthews.
In automated welding, the operator controls the welding machine using a computer. Computer-driven welding devices sit on a band that passes around the pipe at the position of the joint. The computer adjusts the wire feed time, the feed rate and the heat input in order to produce a near-perfect weld.
Facility construction Early in its involvement in the North Slope, H.C. Price expanded into a line of business that was to prove a turning point in the development of its Alaska division: it started doing oil field facility construction.
"Normally on the slope back at those times there were just one or two pipeline projects a year," Matthews said, "so that left us with a lot of capacity for the year-round work. That's why we moved into the facility construction."
The company installed a number of major modules that had been sea-lifted to the North Slope. When the modules arrived by barge, the company moved them on-site, hooked them up and made them operable. Modules ranged from a waterflood facility for the Kuparuk field to the GHX-1 expansion of the Prudhoe Bay Central Gas Facility.
Matthews also explained that in the late 1980s H.C. Price did most of the facility work for Sohio (later to become BP Exploration (Alaska) Inc. in state) with its joint venture partner CIRI.
The installation of the Prudhoe Bay seawater injection plant typified H.C. Price/CIRI's facility construction. The company fit together the modules of this massive plant during a tightly planned three-month schedule, involving 80,000 man-hours of work. After the construction team had placed the modules on-site, it built tank farms and tied in all of the piping. Technicians interconnected the electrical and mechanical systems. Crews installed and aligned the large turbines, which would power the plant.
Power plants and utilities When business in the oil patch plummeted during the 1986 oil price crisis, H.C. Price sought clients in other industries. The company's experience of facility construction proved a major benefit.
"Our experience that we gained in Prudhoe Bay working with industrial facilities transferred quite well to about any type of facility," Matthews said.
Through competitive bidding, H.C. Price picked up two power plant and utility jobs for the U.S. Army Corps of Engineers in Fairbanks. The first job was the expansion of the coal-fired power plant at Eielson Air Force Base. The army wanted to modernize and upgrade the plant. This 200,000 man-hour project gave H.C. Price invaluable experience of powerhouse construction.
The second job for the Corps of Engineers was the expansion of the water, heating, electrical and sewage utilities at Fort Wainwright.
After its experience with the Corps of Engineers, H.C. Price moved on to two other major power plant projects: the Bradley Lake powerhouse and the Healy clean coal plant.
Recent years When BP and ARCO started contracting through a strategic alliance in 1995, the oil companies did not include H.C. Price in their alliance.
Fortunately, H.C. Price did have other work. It held the maintenance contract for the trans-Alaska oil pipeline, in partnership with Ahtna Corp. That contract, however, ended in 1998.
Recently, BP has awarded H.C. Price a contract for the construction of modules for the Northstar field.
Meanwhile, in 1994, the Koyukuk River, south of the Brooks Range, flooded. The river inundated several Native villages in the area, with disastrous results.
The Federal Emergency Management Administration commissioned H.C. Price to manage the reconstruction and cleanup of the villages. The administration recognized the company's knowledge of local contractors and its experience with managing logistics in the unique environment of Alaska.
As Matthews said, "These were all remote villages, so we mobilized Hercules aircraft and local contractors and scheduled the work." Never before had the federal administration commissioned a private company to manage a complete disaster response.
The work involved an interesting mixture of activities, ranging from relocating buildings to reinterring caskets in graveyards. In perhaps the most notable exercise, a construction crew completely relocated the village of Alatna to a place three miles from its original site; the assignment included home and road construction and the installation of a water supply.
Experience of facility and power plant construction is providing the key to another new market: the installation of compressor stations in gas pipelines. With the Environmental Protection Agency mandating cleaner air standards, many coal-fired power plants in the East Coast and Midwest are converting to natural gas. Compressor stations move the gas along the supply pipelines.
Gas pipeline from Canada to Boston In 1999, the Alaska division of H.C. Price successfully bid a contract to build a compressor station in Maine for a pipeline bringing gas from Canada into the Boston region. With the widespread retooling of powerhouses, H.C. Price expects to land more work of this type.
Diversification into other areas, such as building construction, may also provide future work. By teaming with a building contractor, for example, H.C. Price could leverage its experience of planning and managing large construction projects.
However, Matthews is optimistic about doing more work for the oil companies.
"I think that there is enough opportunity on the North Slope still for more than just a few contractors," he said.
The Alaska division has positioned itself well to take on new assignments. The company understands the logistical issues of operating in Alaska. It also enjoys an enviable safety record. It is financially secure, with virtually unlimited bonding.
And H.C. Price is more than just a pipeline construction company. As Matthews said, "We've actually spent about half of our man-hours in Alaska doing facility construction work, not just pipelines. ... We're the only pipeline company that has maintained continuous construction operations in both Alaska and the Lower 48 since the construction of the trans-Alaska pipeline." He expects that record to continue.
Editor's Note: This is an abbreviated version of an article about H.C. Price that appeared in PNA's special publications, "Partners in Development."
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