Engineering Challenges in Flagship PipelineWed, 01/20/2016 - 13:28
The way in which business is done in Mexico has changed, and now companies have new ways of participating. Rubén Kuri, Arendal’s Director of Pipeline Commercialization, explains that years ago, Mexican companies participating in the energy sector were known as contractors due to the dominant scheme, in which clients provided the design and materials, and contractors carried out the project following a set of rules and specifications. Later on, companies moved from being contractors to EPC companies in which the only clients were State-owned companies. “Now there is a revolution taking place in the energy sector, ultimately changing the rules and the way companies can participate in the projects, including the possibility of actually owning them,” Kuri says, adding that if companies do not fully understand the changes in the market, they will run out of work. “These new times call for a change in mentality and focus.”
Arendal had the opportunity to delve into the heralded change in mentality a while ago, and it gained the experience needed to transition from an EPC company to a developer by participating in Los Ramones II Norte. “This pipeline means a lot to the country’s energy sector and the government, and our participation in it and our success is something we can showcase to secure new projects,” Kuri boasts. In his view, the project entailed a paradigm change in the way Arendal worked. “Firstly, although TAG Pipelines, the developer and Arendal’s main client, is partly a public company, it functions as a fully private entity, which implies different rules.” The second challenge involved the size of the project, which consists of 42-inch ducts and an extension of 450km. Kuri explains that Arendal’s reach two years ago prompted the company to look for partners that would allow the company to participate directly and not just as a contractor. “We found the right partners that allowed us to present the winning proposal, and this was the right strategy at the time.”
As for the technical aspect, Kuri identifies two main challenges in the execution of the project, one of which was finishing on the agreed time. “In my experience, the schedules set by owners are aggressive in terms of execution, a situation that is overcome by increasing resources. For Los Ramones II Norte, thousands of pieces of equipment were brought in and over 7,000 workers were recruited.” From a construction perspective, Kuri notes that crossing the Sierra Madre mountain range was the most difficult aspect in terms of execution due to the delivery times, the presence of mountainous rocks, access issues, rain, and other factors. Arendal pushed its engineering muscle to the point of implementing a ropeway to help install ducts in steep areas.
Now Arendal is looking to become a developer and it is working on several proposals to bid on CFE tenders. In the meantime, it is working of a branch of the Tula pipeline. Kuri points out that the marine duct segment is appealing to his company, and as a result Arendal acquired Cal Dive’s Mexican operations. “Cal Dive has built a significant percentage of Mexico’s marine ducts, so taking advantage of this experience will enable us to enter this segment,” Kuri explains.
Arendal has two approaches regarding its ambitions in the Mexican market. “We want to be the Mexican firm that develops the most kilometers worth of pipelines, and to be recognized for our work in these projects and be present in bidding rounds. In addition, we want to own some transportation infrastructure for strategic reasons, so we are looking for partnerships as this is a new business line for us, and we want to be the owner-operator of an important pipeline or at least begin with a branch,” Kuri shares.