SAIPEM CUTBACKS
Facility down to core staff
A major Edmonton oilsands fabrication facility is down to a core of essential staff and its future is unclear after the plant ran out of orders last summer.
The 20-hectare Saipem Canada site in northeast Edmonton had 350 to 400 workers last fall, but is now down to about 50 people keeping the area in working order, company legal manager Denver Brust said Monday.
“Our backlog (of orders) is currently at zero, so we don’t have any ongoing projects ... It’s been reduced to essential staff only, mainly keeping the facility maintained, everything in working order,” he said from the Italian-owned firm’s Canadian headquarters in Calgary.
“Hopefully, we’re going to come into some work in the future, but right now module fabrication isn’t doing so well,” he said. “We’re in a holding pattern.” The plant opened just three years ago to construct major modules that are assembled into upgraders, sulphur recovery units and other structures at oilsands operations.
Officials at the time estimated it cost $200 million.
The facility had the capacity to produce 200 modules annually, but it was hit by the drop in Alberta’s energy sector and tough competition, Brust said.
“When the market started going down, we stopped having any further backlog in the yard,” he said, adding they normally want at least six months’ worth of orders on hand.
“The facility is ... geared toward the oilsands. If you’re not getting any modules up north, you’re not keeping your yard busy.”
Saipem laid off 1,000 tradespeople in March 2015 as construction ended at Husky Energy’s Sunrise oilsands project.
The last modules were built at the Aurum facility in July, when the company was only putting out four or five modules a month and staffing had been dropping steadily, Brust said.
He said there are no plans to shut the site, which includes 35,000 square metres of shops, offices and other buildings.
“We’re actively seeking contracts. We’re trying to get a plan in place right now. It’s still wait and see,” he said. “We’re waiting for the market to rebound. Right now, we don’t know what the future holds.”
The company is focusing more on pipeline manufacturing than modules, but these projects need government approval and then clients must decide to go ahead, Brust said. The Edmonton operation might not be needed for such contracts, and even if it is, the workforce will likely be smaller for the next few years than it was in the past, he said.