January 26, 2010 Extending Canadian Pipelines

Volume 13 | Issue 1

An integral component of a global enterprise, Techint E&C’s recently established Canadian operation has already contributed to large pipelin

Techint Engineering and Construction (Techint E&C), a major business sector within the global Techint Group, recently established Canadian operations to meet North America’s increasing needs for reliable and secure energy supplies. Only about three years old, the Calgary-based Canadian branch has contributed to several of the largest pipeline construction projects in its home country.
“We’re an integral part of a larger enterprise that has established operations throughout the world, and as its name indicates, we provide engineering and construction services as well as procurement,” describes Daniel Santander, Techint E&C’s managing director for Canadian territories. “Also, we provide such services on a lump-sum, turnkey basis, which essentially means that we take on the risks related to engineering and construction activities as well as any risks related to project completion. That’s one of the major differentiators that separate us from other similar companies.”

Odds are favorable for Techint E&C’s clients, as the Canadian operation has managed to effectively manage these risks, from both a cost and time standpoint. “So far, in every project we’ve taken on, we’ve completed work according to specifications and schedules,” reports Santander.

Moreover, the operation adheres to the overall Techint E&C business strategy, which entails design and implementation of the largest and most environmentally sound infrastructure projects, no matter how severe the surrounding geographic terrain.

THE TECHINT ADVANTAGE
The larger Techint E&C business, which includes about 18,000 employees and boasts more than 3,000 completed engineering and construction projects, serves clients throughout the world and delivers its promise in the most remote regions. In business for more than 60 years, Techint E&C has assumed a substantial role in complex and diverse projects in Latin America, Europe, the Middle East and Africa.

Most often, the organization functions as the primary contractor for crude oil and natural gas pipeline installation. Achievements have been both sizeable and significant. For instance, Techint E&C has thus far installed more than 70,000 kilometers of pipelines throughout its coverage area, including 16 pipelines placed on the Andean mountain range. Some of these pipelines were positioned at altitudes as high as 5,000 miles above sea level.

Beyond laying pipelines, the company’s other major activity areas include construction contributions to oil and gas facilities, chemical and petrochemical plants, and mining and metal complexes. Further, Techint E&C supplies services applicable to infrastructures such as water and waste treatment plants, water and mineral pipelines, telecommunications networks, power plants, transmission lines, information technology and automation systems. Also, structures that bear the Techint E&C fingerprint include railways, highways, marine terminals, bridges, dams and airports.

MULTI-FOCUSED ENTERPRISE
With operations established in many countries, Techint E&C necessarily focuses its attention on specific local and regional needs. The company terms this a “multilocal” approach, and the advantages are many: Techint E&C understands local needs and shares its expertise with local operations. This enables it to adhere to regional technical standards and laws/regulations. All local geographic, environmental and business culture issues are effectively addressed.

“That’s one of Techint E&C’s defining characteristics,” says Santander. “In all of its international locations, it tries to set itself up as a local company. This extends to the hiring of local management and staff.”

So far, the company realized its multilocal vision in South America (Argentina, Brazil, Chile, Colombia, Ecuador, Peru and Uruguay), Mexico, the Middle East (e.g., Kazakhstan), and in Nigeria, Trinidad and Tobago. It is also developing more projects in Europe, the United States and, obviously, in Canada. “The company discerned an enormous amount of opportunity in that country,” adds Santander.

ARGENTINA/ITALY CONNECTION
Techint E&C is a division of the Techint Group, the Argentina-based multinational corporation. Agostino Rocca, an Italian engineer and entrepreneur, founded the business in 1945 as Compagnia Tecnica Internazionale (the enterprise eventually changed its name to Techint, which was derived from its original abbreviated telex code name). Previously, Rocca was a driving force in his home country’s steel industry in the 1930s.

From its outset, Techint E&C provided engineering services to an expanding client list that included customers in Latin American and Europe. Soon after, it began offering construction services. In one of its first major projects, it built a network of large-diameter pipelines in Argentina and Brazil.

From there, the Techint E&C Group evolved into a regional and global leader in areas of steel making, infrastructure construction, design and assembly of industrial plants, oil and gas exploration and production, and wide-ranging public services. Along the way, it merged with other Latin American steel, oil and gas providers, and it gained ownership of more than 100 affiliated companies, ensuring a consolidated and solid pathway toward a multi-local and multi-regional presence that takes in Africa, the Americas, Asia, Europe and the Middle East.

Currently, the Techint E&C Group includes six major subcompanies, each charged with different operations. Along with Techint E&C, these include Tenaris (seamless and welded tubular products, technologies and services for the oil and gas industry and for specialized industrial applications); Ternium (flatand long-steel products for steel mills and processing facilities throughout the Americas); Tenova (service provision for global metals, mining, power, raw materials and rock wool industries); Tecpetrol (oil and gas exploration and development and gas transportation and distribution projects in South America), and Humanitas (a supplier of health services in Italy).

EMERGENCE IN CANADA
The Canadian operations implanted its foot on the map with an initial assignment: a pipeline construction project that was part of a 380-kilometer system designed to transport 600,000 barrels a day, according to Santander. The contract, signed in 2007 with the client (the Canadian-based Enbridge Pipelines Inc.), was valued at C$ 99 million, and the project included construction of two sections. “Specifically, we placed two spreads that extended 214 kilometers, which comprised more than half of the system,” reports Santander, adding that the project represented a joint venture with the Robert B. Somerville Company Ltd of King City, Ontario, a frequent Techint E&C project collaborator.

Techint Canada followed that with the Products Pipeline NPS 20 project, for the Interpipeline Fund with the Alberta province, and the Corridor Pipeline Expansion Project. Both projects were completed in November 2008. The pipeline expansion effort was particularly notable. “The pipeline was designed to transport diluted bitumen, and we built a large portion of the slurry pipeline,” informs Santander. “The total project comprised 467 kilometers. Our contract called for 32 kilometers of 42-inch diameter pipe and 43 kilometers of 20-inch diameter pipe.” The contract amounted to about $US 73 million.

More recently, Techint E&C’s Canadian operations engaged in the Alberta Clipper Project, again in a joint partnership with the Robert B. Somerville Company and for Enbridge Pipelines Inc. “The project, which is in its final stage, is part of Enbridge’s expansion program,” describes Santander.

Overall, the project involves the installation of 1,500 kilometers of 36- and 20-inch diameter crude oil pipelines. Its impact is spreading across the Canadian provinces of Alberta, Saskatchewan and Manitoba. Further, an additional 740 kilometers is extending into the United States (to Superior, Wis.). The entire segment is designed to resolve anticipated capacity constraints and be in service by mid-2010.

Techint E&C’s C$ 256 million contract stipulated construction of three spreads of 36-inch diameter pipeline. Santander describes the progression: “We signed the contract in July 2007. We carried out construction of the three sections in the fall of 2008 and the winter and summer of 2009. We are now completing our final section.”

As with the overall Techint E&C business, the Canadian operation demonstrates versatility. In addition to pipeline-installation activities, it participated in an engineering project for a gas terminal plant. “In October 2006, Techint E&C completed the front-end engineering design for the LNG regasification plant, located near Riviere-Du-Loup, for Cacouna Energy,” says Santander. “The terminal would be capable of receiving, storing, and re-gasifying imported LNG with an average annual throughput capacity of 500 million cubic feet a day of natural gas. This was our first project of this kind in Canada.”

The project represented a joint venture between Transcanada and Petro Canada with significant engineering, construction and procurement contribution by Techint E&C. It’s only one of the ways the Canadian operation has demonstrated value and versatility. No doubt, the burgeoning enterprise will have many more opportunities to demonstrate its worth.

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