|
PETROLEUM DIRECTORY: Pipeline contractor endures lull H.C. Price anticipates ANWR, NPR-A, gas pipeline for future work, company continues to branch out in power plant, facility construction Patricia Jones PNA Contributing Writer
Although construction of the Trans-Alaska Pipeline System originally brought pipeline building specialist H.C. Price Co. to the state more than 25 years ago, the company has contributed much more to Alaska’s construction industry.
A laundry list of the projects that H.C. Price has been involved with includes many of Alaska’s large-scale construction jobs — evidence that the company has evolved and expanded, despite the many boom and bust cycles in the state’s oil and gas industry.
“A lot of pipeline companies have come and gone, but we’ve remained,” said David Matthews, H.C. Price vice president and Alaska general manager. “Our core business is pipeline construction but in Alaska, we’ve branched into heavy industrial building and trades construction.”
The company first established an Alaska division in 1975, to complete construction of the 144-mile section three of the trans-Alaska pipeline — which stretches from the Yukon River to Fairbanks, crossing two fault zones.
That was just the start for H.C. Price in Alaska. Between 1978 and 1994, the company completed more than half of all the pipeline construction work and approximately one quarter of the facility construction in Prudhoe Bay and Kuparuk.
Company helped built Prudhoe, Kuparuk During the infrastructure buildup at Prudhoe Bay and Kuparuk, H.C. Price completed a number of large projects, including the Seawater Injection Plant, the Gas Handling expansion at the CCP, as well as projects at the flow stations, gathering centers, Central Production facilities, drill Sites and well pads.
H.C. Price also provided maintenance and project construction services on the 800-mile oil pipeline for more than 10 years, concluding in 1998. That contract with Alyeska Pipeline Service was worth nearly $600 million for that period.
As work slowed on the North Slope in the late 1980s, the company parlayed its construction experience into a number of large power plant projects, culminating with construction of the Bradley Lake hydroelectric plant, from 1989 through 1991, and the experimental Healy Clean Coal Project, from 1994 through 1997.
At times, the Alaska division of H.C. Price has had more than 1,500 workers on its payroll, when the company had numerous projects stacked up, Matthews said. The company taps local union halls for its project labor force.
Staff varies depending on contracts. In addition to about 15 full-time overhead staff employees, staff ranks have grown to more than 130 employees.
Slope slowdown Caught in the current lull of the oil and gas industry, H.C. Price finds itself looking for other markets with which to share its extensive experience. It is a method that has allowed the Alaska division to withstand past slowdowns in the oil and gas industry, and to grow its experience as a contracting company.
“The near-term construction opportunities in oil and gas is pretty limited. Therefore, we’re aggressively pursing markets outside the slope,” Matthews said.
Those other opportunities include work on planned and conceptual power plants in the state, participation in construction of the national missile defense system near Delta Junction, military contracts and opportunities outside the state.
Construction of a natural gas pipeline, ExxonMobil’s Point Thomson project, the opening of the coastal plain of the Arctic National Wildlife Refuge for exploration, and development of known accumulations in the National Petroleum Reserve-Alaska — all are big ticket projects that contractors prepare for, and sometimes patiently await for years.
Gas pipeline project anticipated One of the key projects that H.C. Price is anticipating is start-up of a commercialized North Slope natural gas pipeline system. In regard to this mega-sized project, Matthews said, “It’s not if, but when.
“We’ve been involved in a lot of studies on the proposed Alaska gas pipeline, as we’re sought for our expertise,” he added.
However, he predicts that construction is at least seven years away.
Matthews anticipates that the Mackenzie River Valley pipeline in northwestern Canada will be built first, with the Alaska gas project closely following. He is confident that H.C. Price will be involved with the Alaska gas pipeline project, due to the company’s past experience in the field and presence in Alaska. “We’ll certainly figure into portions of it,” he said.
Furthermore, the company could be involved on both sides of the U.S.-Canadian border, as H.C. Price owns one of the largest pipeline companies in Canada, O.J. Pipeline in Nisku, Alberta.
Already the company’s Canadian resume includes construction of a significant portion of 36-inch and 42-inch gas pipe on the Alliance Pipeline in western Canada, one of the largest pipeline projects in North America.
Finally, H.C. Price is the sole North American distributor and full service contractor for RMS mechanized welding systems. Slope expansion offers potential Even though an Alaska natural gas project is years away, Matthews predicts that work will start before development of oil deposits in the coastal plain of ANWR.
“ANWR should be good for the state and the nation,” Matthews said. “However, it’s hard to comment about its potential until energy companies get an opportunity to explore and access what we have there.”
With Republican control of both the U.S. House and Senate, he expects to see some movement soon to allow exploration on the coastal plain of ANWR.
“If a national energy policy recognizes the need to develop energy sources within this country, the nation should not exclude the potential ANWR may hold,” he said.
Closer on the horizon is the potential for development of discoveries on the western North Slope, near and within NPR-A.
ConocoPhillips, which has led exploration in NPR-A, potentially has a “nice development program in the making,” Matthews said. “There’s sizeable accumulations but none stand on their own. However, combined all together they could be substantial.”
Even so, that potential development will likely take another two to three years for the company to prove its theories and economic models, and win its board approval for its funding and development.
Other oil and gas potential Both large and small projects in Alaska offer hope to contractors like H.C. Price. One large potential project involves the development at Point Thomson by ExxonMobil, expected by Matthews to start sometime after or concurrent with the next expansion into NPR-A.
Heavy oil developments in existing fields also provide some promise for additional work on the Slope, although those jobs typically don’t involve much pipeline construction. Rather than anticipating such new developments stemming from the well-established North Slope investors like BP Exploration, which has eliminated its frontier exploration program in Alaska, Matthews is looking at new players in the state for economic impact.
“I’m very optimistic about independents coming in and their exploration work,” Matthews said. “If they get support from the state and the population in general, plus reasonable access to facilities, there could be a big flurry of activity.”
A stable government spending plan and permitting process could also help construction in the oil and gas industry in general, he said.
“The outlook for the next two or three years isn’t good,” Matthews said. “But if the state would adopt a long-term fiscal plan that balances spending with revenues, while encouraging economic development and concurrently developing a clear and streamlined equitable permitting system, we would in effect encourage investments and could see another boom period.”
| 