Industry promoters of the Alberta oil sands are predicting gradual growth in the latter half of 2010 as development projects, shelved by the recession and dipping oil prices, come back to life.
The companies of the Thunder Bay Oil Consortium plan to be there, rubbing elbows and exchanging business cards at the upcoming National Buyers/Sellers Forum in Edmonton this March.
Attendance by the city’s industrial service companies has become an annual rite of spring for the 22 metal-working and fabrication shops looking to make inroads and secure piece work in the Alberta oil sands and across Western Canada.
Many contacts came through networking at the show and it helps keep the Thunder Bay name out there, said John Jurcik, chairman of Thunder Bay Oil Sands Consortium and president of Venshore Mechanical, a general contractor and pipe manufacturer.
At last year’s show, Jurcik said it was a struggle to get one-on-one meetings with the large development players. Not because they didn’t need goods or services, but it was just the turmoil, stemming from corporation takeovers in the oil and gas sector that threw a wrench into many project plans.
"It was definitely at its lowest part (of the cycle) and some of those projects are coming back on-line," said Jurcik, who believes activity will pick up by mid-year.
While not working directly for big oil players like Suncor and Imperial Oil, Thunder Bay companies have been able to connect with the big producers in an indirect way through companies like PCL and Ledcor.
"Some of those projects are way too big for a Northern Ontario company to spearhead first-hand. We’re in the tier two area where we’re sub-contracting to a larger general contractor."
The distance from clients, logistical challenges and a company’s capability all factor into bidding for big projects, but there are plenty of smaller components that can be made in northwestern Ontario.
Through connections made at the show, local companies are also finding success in Manitoba and Saskatchewan on natural resources and municipal projects, based on referrals from Alberta clients. Venshore Mechanical landed a few projects from the City of Regina.
"Saskatchewan, because of the potash, is going to be an area that will do quite well. They haven’t suffered through the recession. It’s definitely going to be a spot for us to look at," said Jurcik.
With an estimated 40 per cent of Venshore’s geared toward Western Canada, Jurcik’s company is building a new shop in anticipation of securing more work in 2010.
In December, the company was closing the roof on a new 20,000-square-foot fabrication facility, close to the Bombardier plant in Thunder Bay.
Last year, Venshore fabricated two fuel off-loading modules for a Saskatchewan client, Consumers’ Co-operative Refineries.
But the low-slung ceiling of the current 26,000-square-foot shop, a half-hour west of Thunder Bay in Oliver Paipoonge Township created problems in handling the modules.
That won’t be a problem with their new digs, which will be ready for occupancy in late February.
The new $2.5 million shop has doors 28-feet wide and 25-feet high which can handle any piece of equipment that can be shipped by truck or rail.
Jurcik said at the old building, his company would have to refuse work if a module project looked as if it would stretch into the late fall and winter.
Clients would not allow the modules to be built outside in cold weather.
"With the new building, we’ll be able to work 12 months of the year and not turn down any work."
Besides more headroom, the new building will be decked out with two 20,000-pound travelling bridge cranes to easily handle any size of module.
All the automatic welding and pipe fabrication equipment will be transferred over.
The building will be energy-efficient with in-floor heating installed and state-of-the-art filtration for fume extraction.
"It’s going to drastically improve our efficiency," said Jurcik.
There may be future employment opportunities to add to their workforce of 20 full-time tradespeople.
Being located in the city, close to their main administrative office, will save money from their suppliers who charged for deliveries outside Thunder Bay.
Venshore was the lead company for these fuel modules but the work was spread around Thunder Bay with Coastal Steel contributing the structural steel, Dingwells fabricating the steel frame and Clara Industrial doing the painting.
Jurcik said "it’s a pretty safe bet" they will be doing more modules in 2010 for other clients.
"We’re in conversation with people who’ve seen the product we’ve put out and we’ve had an excellent response from it.
"It’s a case where you’ve got to get that product out there and let them see what we can do in Thunder Bay and the quality of work they’re going to come to expect."
www.tbosc.com
www.thunderbay.ca
