Interview with Agility Project Logistics President & CEO Grant Wattman
AJOT: Could you give me any sense as to how important pipeline-related work is to your overall project cargo business? Has it become more important over time?
Wattman: Onshore and offshore pipeline project activity is important to Agility Project Logistics. We anticipate a significant increase in activity in North America in support of shale gas, LNG and NGL export and support of the petrochemical complexes. For Asia Pacific offshore, because of onshore project costs in Australia, there are increasing opportunities in Myanmar, Vietnam, Malaysia and East Africa moving forward with their development.
AJOT: Has the work shifted over time at all in terms of kinds of projects, location?
Wattman: Over the last 18 months, there has been a noticeable shift in oil & gas activity and resulting pipeline projects from Asia Pacific to North America, Middle East and Africa. What the next shift may be as a result of low oil prices, reduction in working capital and geopolitical issues, only time will tell. For Agility, it is time to invest in our capabilities and accelerate our emerging market growth
AJOT: Pipeline projects are notorious for long lead times, for work starting and stopping and then, once construction is underway, for tremendous demands on the carriers. How do you cope with these difficulties?
Wattman: While it’s true that pipeline projects are demanding, our focus and capability is the capital project market and supply chain. Long lead times, changing schedules, difficult locations, and complex sourcing strategies are routine. Our team has the skill sets and we work with our subcontractors through contracting and relationship building to ensure they are well positioned to support the project.
AJOT: What are the biggest challenges for logistics/carriers in terms of pipeline projects? Do pipeline projects present any unique challenges for project cargo?
Wattman: The level of complexity is dependent upon several factors – onshore or offshore project, geographical location, pipe diameter, coated or non-coated. Offshore has increased complexity by nature of the seas you operate in for unloading vessels to barges to lay barge; onshore by location and readily available transport equipment. If coated, handling and maneuvering are challenging. Schedule and ensuring pipe is at hand when laying the string is paramount.
AJOT: As pipeline technology develops, are there new issues that logistics carriers must deal with?
Wattman: Agility is introducing new technology through use of the simple iPhone to provide cargo status updates enroute, proof of delivery at yards and along the string to the pipeline project community. It’s currently in the experimental phase of leveraging the use of drones for inventory management and status updates along the string. We use them now for route surveys and overseeing vessel discharge of project equipment.
AJOT: We tend to focus on the mega-projects such as the South Stream or the Trans Anatolian Pipeline, but there are many, many more smaller projects. Are these projects more the “bread and butter” of the industry?
Wattman: Megaprojects are flashy and sexy and they get the attention of everyone. However, they require service providers with a significant service mix, large footprint, proven history and strong working capital. Take Agility as an example, we are completing one and nearing the completion of another with Gorgon. But we cannot have a product that focuses on one project, at some time in the future. To use a baseball analogy, you cannot expect to hit a home run every time at bat and not always the big game. If we did that, we would not have what those mega projects require to execute. You manage many regular projects, with the bandwidth and capability to swallow a mega.
AJOT: Are there any notable differences between pipeline projects in, say, Asia, than in Europe or North America?
Wattman: There are challenges in all these regions, with varying levels of emphasis around factors such as site access and accessibility, environmental, health, safety, socioeconomic, geopolitical and security.
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