Adapting and Diversifying in an Evolving MarketWed, 01/18/2017 - 10:24
Operators evaluating the feasibility of projects in the pipeline business face two main issues: first securing anchor contracts in a market that is not completely established and that lacks clear rules and consolidated players and secondly, obtaining the required permits and rights of way
In general, “permits are becoming more difficult to acquire and sometimes their absence can delay projects for months,” says Donato Santomauro, Mexico Country Manager of Bonatti. “Several projects have been delayed for these reasons and in other cases we had to adjust the construction strategy due to limited access.”
Permit acquisition becomes even more complicated when crossing state lines, which most pipelines do, and with new requirements such as the social impact study. Regarding social management, Bonatti has found that communities might fear the projects being developed around their lands because of previous accidents and in some cases the incidents are caused by attempted theft of products being transported by the pipeline, a frequent problem in Mexico’s vast rural expanses.
Although social management is the pipeline owner’s responsibility, Bonatti strives to take action and participate in the improvement of the communities it works with. The company supports local institutes such as orphanages and schools through corporate social responsibility initiatives. Another strategy to support the local communities is by employing a local workforce. Over 90 percent of Bonatti’s workforce in the country is Mexican.
Bonatti entered the Mexican oil and gas market with Enagás, for which it was a main contractor in Spain, in 2012, just before the Energy Reform was implemented. Its first project was the Morelos Pipeline, a 160km, 30- inch wide pipeline crossing the states of Tlaxcala, Puebla and Morelos. Since then it has worked for major operators including Transcanada, IEnova and Gasoductos de Chihuahua and for EPC contractors such as ICA Fluor. The company has been involved in laying 1,628km of pipelines on an EPC basis and has also provided engineering, procurement and construction services for three major compression stations in Mexico.
The key elements that define Bonatti’s competitiveness are its level of efficiency and specialization resulting from the company’s complete integration and high level of local manpower. Only 10 percent of its pipeline construction activities are subcontracted, Santomauro says.
An automatic welding system developed in-house offers an additional competitive advantage, especially when it comes to large diameters and considerable lengths. “TransCanada mentioned that Bonatti was the fastest welding contractor they had ever worked with, including companies in Canada and the US,” Santomauro adds.
Bonatti’s latest mechatronic welding system, the ROB.E 10:01, allows the company flexibility and reliability to ensure quality and profitable on-time delivery. The system, designed to weld pipes with diameters greater than 10 inches, is the result of over 25 years of research and development.
A change resulting from the Energy Reform is the growing demand for refined products, creating an interesting opportunity for Bonatti to target multiproduct pipelines. “There is a need for importing refined products, especially from the US and Europe, and to transport them from the coast to consumption centers. The biggest markets are from the Atlantic Coast to the central area of the country, for example from Tuxpan to Tula, which we hope will be an opportunity for us.”
Bonatti is also looking for opportunities to diversify its services portfolio in Mexico and is considering plant construction and operation and maintenance activities. “We have a strong operation and maintenance portfolio around the world, with between 10 and 15 percent of our revenues coming from that sector. The EPC of pipelines and plants and the relevant operations and maintenance markets are complementary, with the latter providing multiyear stability, which helps Bonatti maintain its presence in the oil and gas market even in the absence of EPC projects,” Santomauro adds.