10/12 Industry Report [Q2 2017] by Baton Rouge Business Report

Q2 2017

INDUSTRY REPORT TOOLS OF EFFICIENCY AS COST OVERRUNS PLAGUE GULF COAST PROJECTS, OWNERS LOOK FOR ANSWERS.

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

CONTENTS

Publisher: Rolfe McCollister, Jr.

TOOLS OF EFFICIENCY

EDITORIAL Editorial Director: Penny Font Editor: Jerry Martin Director of Research: Sierra Crump Senior Contributing Writer: Sam Barnes Contributing Writers: Erin Z. Bass, Jen Bayhi-Gennaro, David Jacobs, Meredith Whitten Contributing Photographers: Lee Celano, Terri Fensel, Cheryl Gerber, Don Kadair ADVERTISING Sales Director: Jill Stokeld Account Executives: J.C. Applewhite, Joe Gonzales, Angie LaPorte Advertising Coordinator: Lacie Thibodeaux Community Liaison: Jeanne McCollister McNeil

AS COST OVERRUNS PLAGUE GULF COAST PROJECTS, OWNERS LOOK FOR ANSWERS. PAGE 28

PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Van Vu Graphic Designers: Tammi deGeneres, Melinda Gonzalez, Rachel Parker, Emily Witt

ISTOCK

ADMINISTRATION Chief Financial Officer: Jonathan Percle Business Manager: Adam Lagneaux Business Associate: Lydia Spano Office Coordinator: Debbie Lamonica Courier: Jim Wainwright Receptionist: Cathy Brown

LAUNCH

ICYMI Industry briefs and other intelligence

The big picture The 2,000-acre Port of Iberia is a hub of the oil and gas fabrication and marine services industries.

Get to know Kate MacArthur is the freshly appointed president and CEO of Ascension Economic Development Corp. Timeline The epic Toshiba and Westinghouse Electric Co. corporate disasters got their start in Louisiana. Dialogue Nine Louisiana industry executives and human resources experts share their strategies for attracting millennial talent.

24 27

5 things What you need to know about the Industrial Internet of Things. Executive profile Meet Robert Gelinas, plant manager of BioLab Inc. in Lake Charles.

NEWS

Winds of change The jackets supporting wind turbines off the coast of Rhode Island were engineered in New Orleans and built in Houma. Storm over Bayou Bridge Pipe for a $670 million pipeline through south Louisiana is ready to go. But its owners are awaiting the regulatory green light.

Manufactured habitat Louisiana’s ‘Rigs to Reefs’ program offers a costeffective solution to the energy industry and a boon to fish in the Gulf.

FOCUS: TRANSPORT

Working on the railroad Everyone agrees the New Orleans Public Belt is a critical cog in the global economy. What to do with it is another question. Saving La. 1 The shortcomings of a roadway built to bring vacationers to Grand Isle in their Model T Fords now has major implications for the nation’s oil supply.

INSIGHT

Columnists weigh in on low-cost hydrocarbons, investing in infrastructure and environmental considerations for project development.

CLOSING NOTES

61 62 66

A deeper commitment South Louisiana ports look to dredging of channels as a catalyst for growth.

Executive moves Company news Project maps Our maps of the megaprojects and medium-sized projects that are driving the industrial boom. My toughest challenge Johnny Holifield, Specialty Welding and Turnarounds

AUDIENCE DEVELOPMENT Audience Development Coordinator: Kenna Maranto A PUBLICATION OF LOUISIANA BUSINESS INC. Chairman: Rolfe H. McCollister, Jr. President and CEO: Julio A. Melara Executive Assistant: Millie Coon SUBSCRIPTIONS/ CUSTOMER SERVICE 9029 Jefferson Highway, Suite 300 Baton Rouge, LA 70809 225-421-8157 • FAX 225-928-5019 1012industryreport.com email: circulation@businessreport.com Volume 2 - Number 2

© Copyright 2017 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published quarterly by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. Telephone (225) 928-1700. POSTMASTER: Send address changes to 1012 Industry Report, 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. 10/12 Industry Report cannot be responsible for the return of unsolicited material— manuscripts or photographs, with or without the inclusion of a stamped, self-addressed return envelope. Information in this publication is gathered from sources considered to be reliable, but the accuracy and completeness of the information cannot be guaranteed. No information expressed here constitutes a solicitation for the purchase or sale of any securities.

Send your ideas and company news to editor@1012industryreport.com. 6 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

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IN THIS ISSUE

Unearthing the secrets to staying on budget—and on schedule

PENNY FONT EDITORIAL DIRECTOR

eality made headlines last June. South Africa-based Sasol’s Lake Charles Chemicals Project was running behind schedule and over budget. An early review indicated total capital expenditure for the project could increase by as much as $3 billion from the initial $8.1 billion estimate two years prior. Excessive rainfall. Higher labor costs. Lump-sum big projects above estimates. Bulk material needs underestimated. And the company’s decision to dial back spending until June 2018 in response to low oil prices. All of it—the company said—was to blame. The good news is Sasol is now on budget with a projected 2018 startup. But the anecdote is one that is playing out all along the Gulf Coast, as multimillion-dollar projects rise from blueprints. “Most of the major projects in the Gulf Coast are way over schedule and way over budget,” says Tony Salemme, vice president of Industrial Info Resources in Sugar Land, Texas. “That’s just the bottom line facts. Nobody wants to speak to it. They don’t want to be clear about the numbers.” There are some bright spots. Shell Chemical’s $717 million expansion of its alpha olefins plant in Geismar, for example, is on schedule and on budget. Based upon current conditions, the project likely will be delivered on the earliest date in the schedule, according to Shell Geismar General Manager Rhoman Hardy. So what distinguishes one project from another? Our cover story explores the secrets of success and the latest tools of efficiency. Read more on page 28. GET THE TIP Part of our mission at 10/12 Industry Report is to provide a

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

platform for leaders in industry to learn from the successes of others. In addition to our cover story offering you insight into becoming more efficient, this edition is chock full of tips on recruiting, technology, environmental considerations in site selection and more. On page 23, read about how nine executives and human resource managers are attracting the elusive millennial talent to industry—with aggressive career paths, technology, networking, civic and environmental engagement, and flexibility. Here, for example, is Turner Industries Executive Vice President Stephen Toups’ pitch to millennials: “You’re getting to work with bleeding-edge technology and implement it in the field. When you leave at the end of the day, you know you’ve made a difference, and I think that’s what the millennials want.” We hear about the Industrial Internet of Things, but what might it mean for your company? Five things you need to know about the IIoT begin on page 24. And it’s a fact: Environmental considerations can determine the success or failure of a commercial or industrial project. How to make sure you’re on the right track? Jones Walker Partner Boyd Bryan spells out the many criteria, from proximity to customers and usable acreage to available infrastructure and minimizing potential adverse environmental impacts of facility operations. Get all the details on page 60. FOCUS: TRANSPORT Infrastructure is perpetually a front-burner issue for Louisiana industry, but even more so this spring. The Legislature is mulling a gas tax this session, but the lowering of load limits on vehicles using the La. 1 Intracoastal Waterway Bridge in Port Allen is causing serious issues for industries on the west side of the

Mississippi River, making it all the more evident that we are nearing a breaking point. For that reason, our Focus section in this issue zeroes in on the topic of transport. We start with a look at the controversy over the New Orleans Public Belt Railroad. The City of New Orleans, which owns the belt, has decided upon a public-private partnership to run and maintain it. Deputy Mayor of External Affairs Ryan Berni contends the belt is “greatly undercapitalized,” and that the partnership is an opportunity to “improve and enhance” the railroad’s economic relationship with the city, the Port of New Orleans and its customers. But port officials are concerned the new arrangement will be driven more by profit than improvement. Get the full story on page 48. Also in Focus: the story of efforts to save La. 1. The roadway was built in the 1930s to bring vacationers to Grand Isle. Today, it supports 18% of the nation’s daily oil production and serves 90% of deepwater projects in the Gulf. But coastal erosion, sea-level rise and ground subsidence are making the roadway more vulnerable than ever. The story begins on page 52. And learn more about how south Louisiana ports are looking at channel dredging as a key catalyst for growth, beginning on page 55. SAME NAME, NEW LOOK When you picked up this issue of 10/12 Industry Report, you may have noticed a change in our look. Our name remains the same—as does our purpose—but our logo has been refined to place the emphasis on what we do: report on industry. As always, we want your ideas and company news. Send them to editor@1012industryreport.com. If you’d like to receive this free publication, you can sign up at 1012industryreport.com/signup.

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LAUNCH ICYMI

A story about a bridge LEADERS REPRESENTING the business community announced April 4 the formation of a new statewide coalition to advocate for significant and sustainable transportation funding. The coalition, BUILD IT: Businesses United for Improving Louisiana’s Development by Investing in Transportation, outlined two key principles developed through outreach to legislators and business organizations: 1. Maximize existing funding and ensure accountability. The group said Louisiana needs to continue to restore trust in the Transportation Trust Fund and prohibit the transfer of TTF funds to nontransportation uses. 2. Increase transportation investment. The group said Louisiana should significantly increase transportation revenue, with an

eye toward addressing the state’s $13 billion maintenance backlog and constructing new capacity megaprojects. “While a variety of sources have been considered, the bulk of funding must come through an increase in the state gas tax,” the group said in a statement. Just days before BUILD IT was announced, a single aging bridge began causing massive headaches for industry on the west side of the Mississippi River near Baton Rouge. The Louisiana Department of Transportation and Development announced late in the afternoon on March 30 that it would begin restricting traffic on the La. 1 bridge over the Intracoastal Waterway to vehicles weighing less than 25 tons the following day due to deficiencies uncovered during a routine inspec-

tion. The restriction is expected to remain in effect for at least 60 days, while work crews repair the 57-year-old structure. To get to the south side of the Intracoastal Waterway, trucks exceeding the weight limit are now being directed to cross the Mississippi River at the Sunshine Bridge in Donaldsonville. For industrial users like nearby Dow Louisiana Operations, the weight restriction is extremely problematic. Some 100 Dow trucks per day carrying liquid and polyethylene typically leave the company’s Port Allen warehouse and use the La. 1 bridge, said Stacey Chiasson in Dow’s public affairs division. Now, those trucks are spending at least an additional hour on the road using alternate routes. Connie Fabré, executive director of the Greater Baton Rouge Industry

Alliance, says the La. 1 issue underscores the importance of passing an increase in the gas tax this session. “This is a prime example of why Louisiana really needs to invest in its infrastructure,” Fabré said. Meanwhile, the membership of the Louisiana chapter of the National Federation of Independent Businesses is overwhelmingly against an increase in the gas tax, according to State Director Dawn Starns. Stay tuned.

—Stephanie Riegel, Jerry Martin

NUMBERS

5,600 Number of jobs gained during 2016 in the Lake Charles MSA—the most of any Louisiana metro—according to the U.S. Bureau of Labor Statistics

NEW POWER FOR A NEW AGE OFFICIALS WITH ENTERGY LOUISIANA are proposing an $872 million power plant in Westlake to meet the growing regional demand for energy and to replace existing infrastructure that has aged over the years, the American Press in Lake Charles reports. Phillip May, president/CEO of Entergy Louisiana, told the American Press editorial board in March the 994-megawatt plant could result in customer savings ranging from $1.3 billion to $2 billion over its 30-year lifespan. The project, known as the Lake Charles Power Station, will be built next to the existing Roy S. Nelson facility. It will cost $829 million, while transmission interconnection costs will be around $43 million. The goal is to have the plant up and running by June of 2020. CB&I will build the plant. —American Press

10 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

DIAMOND GREEN READIES EXPANSION BASED ON “SOLID EXECUTION and strong earnings,” the $190 million expansion of the Diamond Green Diesel facility in Norco is back in motion again. Engineering and construction planning is underway on the project, according to Darling Ingredients’ latest earnings statement. Equipment has been ordered “that requires a long lead time for manufacturing.” Construction is expected to be complete by late 2017 with a mid-2018 startup. Plans are to increase the facility’s annual production from 160 million gallons to 275 million gallons of renewable diesel fuel. —St. Charles Herald-Guide

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WELCOME BACK, DON!

TALENT TRENDS

STAFFING THE CYBER TEAM

THE LOUISIANA OIL AND GAS ASSOCIATION announced March 13 that Don Briggs is returning to his role as president of the association. Briggs had been recovering from a serious head injury suffered in North Carolina in October 2016. “His rehabilitation has gone well, and he is now ready to reassume his role,” LOGA said in statement. Briggs said, “It has been a long journey, and I am excited at the prospect of resuming my duties.” Gifford Briggs served as acting president of the organization during his father’s recovery and will now return to his position as vice president.

CYBERATTACKS ON MANUFACTURING companies of all sizes are on the rise as attackers attempt to steal valuable intellectual property and information. In fact, the manufacturing sector is one of the most hacked industries, second only to health care. Therefore, cybersecurity jobs in manufacturing are in high demand. However, the demand for these workers is outstripping supply. Cybersecurity openings have grown three times as fast as openings for IT jobs overall, and it takes companies longer to fill cybersecurity positions. The cybersecurity industry as a whole is expected to grow from $75 billion in 2015 to $170 billion by 2020, according to Forbes. In addition, the demand for the cybersecurity workforce is expected to rise to 6 million by 2019, with a projected shortfall of 1.5 million.

—Staff report

IN SO MANY WORDS

For our region and state to take advantage of our growth, we must have adequate infrastructure, and for southwest Louisiana our No. 1 priority is the replacement of the I-10 bridge in Lake Charles.

—DAN CHARNEY, mhlnews.com

MEDIA

EXPANDING ON THE NEWS

—SWLA ALLIANCE PRESIDENT GEORGE SWIFT, on the BUILD IT coalition campaign

HOMESITE CO. ANNOUNCED it is expanding its monthly newsletter. Gulf Coast Petrochemical News is distributed via email and covers news on changes in existing and proposed plants along the Gulf Coast from Pensacola, Florida, to just below Corpus Christi, Texas, involved in oil and gas production, separation, transportation and storage, refineries, power generation, biofuels, and paper mills, along with a bit of the political and global news impacting industry. “We’re seeing unprecedented change in the petrochemical industry today,” says publisher Randy Peterson. “For people working to sell products, services, or placing people with Gulf Coast plants, Homesite Co. is helping with an expanded monthly newsletter.” You can find out more at gcpn.online.

SAFETY CORNER “A FEW WEEKS AGO I was at a facility that has a monthly safety phrase contest. Employees create their own safety phrase and the safety council chooses the winning phrase. The phrase gets placed on the marquee you see driving into the facility and the employee gets recognition and a small prize. I’ve seen several companies that do something similar. I like this approach because it makes safety personal for their employees. Employees that write their own safety phrase are priming themselves to think and work safer. The words are personal, relevant, and therefore impactful. We can’t yet determine how much these efforts impact workplace behavior, but I’m willing to wager a person won’t violate their personal safety phrase when it’s visible to all co-workers.” —Brian Dishman, Senior Consultant, Select International

—Staff report

INSIDE SASOL’S CHEMICALS STRATEGY

IN SO MANY WORDS

US production volume (ktpa)

Sasol held a site visit for investors at its Lake Charles Chemical Project March 24. One of the key takeaways: The LCCP will help Sasol compete in chemicals markets on dual fronts—polyethylene and differentiated chemicals. SASOL’S FY16 GLOBAL CHEMICALS SALES Base Chemicals 3.0 mtpa Performance Chemicals 3.5 mtpa

2,400

US CAPACITY UNDER CONSTRUCTION LCCP 1.7 mtpa Gemini 0.2 mtpa

1,800

EXISTING LCCP GEMINI (JOINT VENTURE IN TEXAS)

*Ziegler Alumina Guerbet **Includes MEG

1,200 600 0

ETHYLENE

POLYETHYLENE

ZAG*

ETHYLENE OXIDE VALUE CHAIN**

ALKYLATES AND OTHER ORGANICS

PHENOLICS Source: Sasol

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Overseas markets underpin our investment. The supply is here; the demand is there. We want to keep connecting those dots. —DARREN WOODS, ExxonMobil chairman and CEO, in a speech at the CERAWeek energy conference in Houston, where the company announced a $20 billion investment program on the Gulf Coast. The company did not specify plans for Louisiana, but did promise “a number of other projects” at its petrochemical complex in Baton Rouge.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

Cajun Industrial Design & Construction LLC was an Eagle Award recipient in the Industrial $15M-25M category for the Shintech HAPF-3 Project. Cajun IDC demonstrated resourceful and profitable execution in building a hydrochloric acid production furnace on an accelerated 12-month schedule, recording zero injuries over 181,788 man-hours. Accepting the award on behalf of Cajun IDC was Eric Kelley (right).

LOUISIANA SHINES IN EIC AWARDS ASSOCIATED BUILDERS AND Contractors honored 98 projects collectively worth $2.4 billion at the 27th annual Excellence in Construction® Awards during ABC’s Workforce Week ’17 in Fort Lauderdale, Florida. The winning projects, selected from entries submitted from across the nation, were judged on complexity, attractiveness, unique challenges overcome, completion time, workmanship, innovation, safety and cost. Here are the winning Louisiana industrial firms and projects:

CONTRACTOR: Cajun Industries LLC PROJECT: Chevron Phillips Chemical - USGC Ethylene Project LOCATION: Baytown, Texas

Facility Expansion Project LOCATION: Port Fourchon, Louisiana

AWARD: Pyramid CONTRACTOR: Cajun Industries LLC PROJECT: Shintech Ethane Cracker Plant LOCATION: Plaquemine, Louisiana

INDUSTRIAL $15M TO $25M

COMMERCIAL - < $5M ELECTRICAL - > $10M AWARD: Eagle CONTRACTOR: ISC Constructors LLC PROJECT: Kemper County IGCC Project LOCATION: DeKalb, Mississippi AWARD: Pyramid CONTRACTOR: MMR Constructors Inc. PROJECT: EDC Expansion Project LOCATION: El Dorado, Arkansas AWARD: Pyramid CONTRACTOR: Triad Electric & Controls Inc. PROJECT: Methanex Geismar II Project LOCATION: Geismar, Louisiana

OTHER SPECIALTY CONSTRUCTION/ INDUSTRIAL - < $10M AWARD: Pyramid CONTRACTOR: Cajun Industries LLC PROJECT: Marathon Pipe Rack & Infrastructure Upgrades LOCATION: Garyville, Louisiana AWARD: Pyramid CONTRACTOR: Holes Inc. PROJECT: Sasol Chemical Unit 225 Dismantling LOCATION: Westlake, Louisiana

OTHER SPECIALTY CONSTRUCTION INDUSTRIAL - > $10M AWARD: Eagle

12 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

AWARD: Pyramid CONTRACTOR: EXCEL PROJECT: Apache Industrial New Facility LOCATION: Geismar, Louisiana

COMMERCIAL - $5M TO $10M AWARD: Eagle CONTRACTOR: Cajun Industries LLC PROJECT: Cajun Industries Office Expansion LOCATION: Baton Rouge, Louisiana

INDUSTRIAL - < $5M AWARD: Eagle CONTRACTOR: Cajun Industries LLC PROJECT: Motiva-Amite Convent Tank Farm Stream LOCATION: Convent, Louisiana

INDUSTRIAL - $5M TO $15M AWARD: Eagle CONTRACTOR: GROUP Contractors LLC PROJECT: Poly B Packaging Warehouse, The Dow Co. LOCATION: Plaquemine, Louisiana AWARD: Pyramid CONTRACTOR: Primoris Services Corp. PROJECT: Newpark Drilling Fluids

AWARD: Eagle CONTRACTOR: Cajun Industries LLC PROJECT: Shintech HAPF-3 LOCATION: Plaquemine, Louisiana AWARD: Pyramid CONTRACTOR: Cajun Industries LLC PROJECT: Motiva Project Amite LOCATION: Convent, Louisiana

INDUSTRIAL $25M TO $100M AWARD: Pyramid CONTRACTOR: Turner Industries Group LLC PROJECT: Methanex G-2 Mechanical Project LOCATION: Geismar, Louisiana

MEGAPROJECTS > $100M AWARD: Eagle CONTRACTOR: Turner Industries Group LLC PROJECT: Delayed Coker Replacement Project LOCATION: McPherson, Kansas

COURTESY CAJUN INDUSTRIES

LAUNCH: ICYMI

+77

Year-over-year change in the U.S. rig count according to Platts RigData, which counted 901 rigs in March 2017, up 391 from March 2016. The rig count includes U.S. onshore, U.S. inland waters and U.S. offshore Gulf of Mexico drilling rigs. Source: Platts RigData

EVENTS

LONDON CALLING: JUNE 10-14 ON THE HEELS OF the game-changing announcement that British Airways will provide direct air service between New Orleans and London—and with a nod to The Clash—GNO Inc. announced it will lead a business mission and international summit in London early this summer, “London Calling.” While in London, the delegation will hear from local experts, corporate and government entities across a number of sectors including energy, advanced manufacturing, and digital/tech and creative. —Staff report

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

LAUNCH: ICYMI

.37

A WIN

AND A LOSS

GOV. JOHN BEL EDWARDS and Wanhua Chemical Chairman and CEO Zengtai Liao announced in April the company will develop a chemical manufacturing complex in Louisiana, with plans for the $1.12 billion project leading to a specific site selection later this year. Wanhua will produce methylene diphenyl diisocyanate, or MDI, in the project, which will combine a $954 million capital investment by Wanhua with a $166 million capital investment by project partners. The project will create 170 new direct jobs. Wanhua’s project will be the second-largest foreign direct investment in Louisiana by a company based in mainland China, following the $1.85 billion methanol complex under development by Yuhuang Chemical in St. James Parish. Wanhua says the Louisiana project will enable the company to better serve customers in the Americas.

EXXONMOBIL CHEMICAL CO. and its Saudi partner, SABIC, announced April 19 they have chosen to build their roughly $10 billion, 1,300-acre plastics complex at a site near Corpus Christi. The decision ended months of speculation about which state would win the project, for which ExxonMobil and SABIC also reportedly considered sites in Ascension and St. James parishes. Louisiana’s economic development chief said the state is not discouraged by the decision to build the “world’s largest” ethane cracker plant in neighboring Texas. “Texas is formidable competition. But so is Louisiana,” Louisiana Economic Development Secretary Don Pierson said in a statement. “We were a strong finalist for this project, and we are very proud of the case we made on behalf of our state. We’re also proud of our record of progress in continuing to attract significant chemical manufacturing projects.”

—Staff report

—daily-report.com

2016 OSHA recordable incident rate achieved by Greater Baton Rouge Industry Alliance members and their contractors together.

SWEET NEWS FOR OIL MARKET OBSERVERS

Source: GBRIA

LAKE CHARLES LANDS LOTTE ON APRIL 6 Gov. John Bel Edwards and CEO Soon Hyo “Steve” Chung of Lotte Chemical USA announced the company will establish its headquarters in Lake Charles, where the corporate office will join Lotte Chemical USA’s $1.1 billion monoethylene glycol—or MEG—plant under construction at the junction of interstates 10 and 210. Together, the MEG plant and corporate headquarters will create 130 new direct jobs, with an average annual salary of more than $80,000, plus benefits. Lotte will move its headquarters from Houston to Lake Charles. In addition to the MEG plant, the company is investing in a $1.9 billion joint venture with Westlake Chemical to build an ethane cracker complex, also under construction on the 250-acre site that will be home to the MEG plant and the future headquarters. Lotte Chemical USA is part of the Seoul-based Lotte Group, South Korea’s fifth-largest company. Both plants are expected to begin operating in 2019. The Lake Charles site is expected to be the largest MEG plant in the U.S. —Staff report

—Staff report

DRIFTWOOD TAKES NEXT STEP

NUMBERS

S&P GLOBAL PLATTS ANNOUNCED in March the launch of a new daily price assessment for the U.S. Gulf Coast blended medium, Louisiana Offshore Oil Port Sour crude oil. The blend is increasingly becoming a competitive alternative to other established offshore grades and is a key component of the Gulf Coast refining complex. John-Laurent Tronche, managing editor of Americas crude at S&P Global Platts, said: “Refiners on the U.S. Gulf Coast continue to be major consumers of medium sour grades of crude oil produced both offshore domestically and imported from abroad, despite booming U.S. onshore production of sour and sweet crudes. The new LOOP Sour price assessment meets the industry’s need for a versatile benchmark that encompasses U.S. and foreign crudes while offering unique visibility into the storage market.” LOOP Sour blend is comprised of two domestic U.S. crudes produced in the Gulf of Mexico and three Middle Eastern grades: Arab Medium, Basrah Light and Kuwait. Pricing began March 27.

Rise in new business incorporations in St. Tammany parish from 2015 to 2016. Source: STEDF

TELLURIAN INC. HAS ANNOUNCED that its subsidiaries Driftwood LNG LLC and Driftwood Pipeline LLC have completed the pre-filing phase and collectively submitted a formal application with the Federal Energy Regulatory Commission to construct and operate an LNG facility and pipeline near Lake Charles. Priced at $13 billion to $16 billion, the LNG export facility becomes the No. 3 project on 10/12 Industry Report’s list of Louisiana megaprojects. [See pages 68-69.] The pipeline, meanwhile, will be approximately 96 miles long and connect the facility to interstate pipelines. Tellurian is expecting to commence construction of the Driftwood LNG project in 2018 and produce first LNG in 2022, with full operations to follow in 2025. During the construction phase, the project will require approximately 6,400 workers. When fully operational, it will create nearly 400 permanent jobs. Tellurian expects to make a final investment decision following regulatory approval in mid-2018. —LNG Industry

14 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

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MAKING CONNECTIONS TARA HERNANDEZ SAYS her primary role as GNO Inc.’s 2017 board chairman will be to facilitate connections among the various groups that comprise the 10-parish Greater New Orleans region’s manufacturing sector, with the end goal of creating new business opportunities. Through the economic development group’s Advanced Manufacturing Partnership, Hernandez (above) plans to create a brain trust comprised of academics and industry leaders from all segments of advanced manufacturing to enable cross-collaboration. AMP is one component of GNO Inc.’s strategy to increase outbound global exports and inbound foreign direct investment, as well as retain and create jobs. Hernandez, president of JCH Development in New Orleans, was appointed to her position in February. She cites a current partnership with TCI Plastics, a New Orleans company that packages and exports PVC resin and polyethylene for various end uses. “They see their business tripling in the next couple of years, so we are not only helping them with opportunities; they need a job force,” Hernandez says. “So how do we make people aware of that but also get them trained? I connected TCI with a job readiness program that could assist that.” According to statistics provided by GNO Inc., nearly 10,000 people are directly employed in advanced manufacturing in the parishes surrounding and including New Orleans, and more than 400 business operations. As of 2015, manufacturing accounted for $13.2 billion in gross regional product, about 17% of the Greater New Orleans GRP. —Sam Barnes

BUSINESS TICKER • Wood Group PLC has agreed to acquire fellow oil field services firm Amec Foster Wheeler PLC in a deal valued at $2.7 billion. • Dow and DuPont are looking to close their megamerger in the second quarter of 2017. • Embridge is buying Spectra. That will result in the largest North American energy infrastructure company. Embridge has 50,000 miles of pipelines. They plan to cut 1,000 jobs after the close.

Ready to take the next step? To take your business to the next level, you need a banking partner who not only understands the challenges of your industry, but also the unique needs of your business and your local market. That’s why the Regions Bankers right here in South Louisiana can deliver the resources of a large bank with the local market understanding and responsiveness of a community bank. So whether it’s a smart leasing solution, cutting-edge Treasury Management capability or traditional loans and deposits, your local Regions Banker will be right here to deliver the customized service and solutions that give you a competitive advantage.

Call us at 225.388.2701 for advice, guidance and education on ways to move your business forward.

• KBR Inc. has signed a multiphase, 10-year, global engineering and procurement services master contract with Chevron U.S.A. Inc. • Major oil producers like Shell, ExxonMobil and Chevron are cutting costs and believe they can break even with prices less than $50/bbl. Hedging is currently playing an important role. • Cheniere Energy is holding an open season for its Midship Pipeline Project. The 200-mile pipeline would carry natural gas from the Scoop/Stack plays in Oklahoma to the Gulf Coast. • Dow Chemical has completed a massive ethane cracker plant in Freeport, Texas, the “crown jewel” of its $6 billion expansion along the Gulf Coast.

Sources: Oil & Gas Journal, Gulf Coast Petrochemical News, FuelFix.com

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

LAUNCH: THE BIG PICTURE

A HUB IN THE

COURTESY DYNAMIC INDUSTRIES

SWAMP

10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2017

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ON THE WATERFRONT The Port of Iberia is a 2,000-acre industrial and manufacturing site south of Lafayette that is home to over 100 companies and 5,000 workers involved in oil and gas fabrication and production, materials handling, marine services and more. The port has direct access to the Gulf Intracoastal Waterway and access to the Gulf through its 13-foot deep main navigational channel. GOING DEEPER One of the top current priorities at the Port of Iberia is the creation of the Acadiana Gulf of Mexico Access Channel. Craig Romero, port executive director, recently met with lawmakers to brief them on the AGMAC status and emphasize its importance. “We will continue to pursue the deepening of the channel,” Romero said. “The AGMAC will increase the business potential for the Port of Iberia and Acadiana.” THE NEXT BIG THING At the center of this image is a major manufacturing project completed at the port for Fluor Technip Integrated and South Africa-based Sasol, which is building the largest of Louisiana’s megaprojects in Westlake. Dynamic Industries Inc., a fabrication and service provider to the global oil, gas and energy industries, fabricated and assembled these pipe racks at its Port of Iberia facility and then shipped them to Sasol. Dynamic was selected for this work in part due to its long history of successfully completing multiple projects for Fluor and its clients, Dynamic said in a statement. QUALITY WORK “This project is another example of the quality work that is performed by Dynamic Industries Inc. at the Port of Iberia,” said Jeff Clement, COO of Dynamic, U.S. Fabrication Division. “This project was very successful for Dynamic, FTI and Sasol and was completed with no lost-time accidents. Dynamic prides itself for delivering quality work, on time, within budget and most of all safely, in accordance with our company motto, ‘Everyone Arrives Home Safely.’ ” THE END USER These pipe racks were transported in October to become a component in Sasol’s Lake Charles Chemicals Project in Westlake, a new 1.5 million-ton-per-year ethane cracker with six downstream chemical units that will roughly triple Sasol’s chemical production capacity in the U.S. and expand its position in the growing global chemical markets. MORE ON PORTS For a new report on activities at the rest of south Louisiana’s ports, see page 55.

1012industryreport.com

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

LAUNCH: PEOPLE

GET TO KNOW

Kate MacArthur

DON KADAIR

Newly appointed President + CEO, Ascension Economic Development Corp.

ate MacArthur has been on a southerly trajectory for more than a decade. Growing up outside of Philadelphia, she attended college in Gettysburg before spending time in Washington, D.C., then made the big leap southward to earn her master’s degree at the University of Southern Mississippi. That’s when she first got the economic development bug. “As part of that program, I interned in the planning and economic development department for a small rural town, and it was fascinating,” MacArthur says. She learned something in the process—that she had the right skill-

set for managing the give and take of interactions with area industry. Her fate took an irrevocable turn when she visited Baton Rouge one weekend. She immediately fell in love with the city’s vibrant, smalltown feel, and later landed a job at the Baton Rouge Area Chamber in business intelligence research marketing. In that role, she became intimately knowledgeable about the area—including Ascension Parish. Little did she know that one day she would take on a leadership role in economic development there. In mid-March, MacArthur replaced departing Ascension Economic Development Corp. chief Mike Eades, after her most recent

18 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

stint in a similar role at the Zachary Chamber of Commerce. Just two weeks into the job, 10/12 Industry Report sat down with MacArthur to hear about her plans for the organization.

—Sam Barnes

How do your personal and professional strengths prepare you for your new role?

I think one of my strengths is an ability to build teams that work together. Economic developers are like middlemen: We just connect all the moving pieces. My job is to facilitate job creation. It’s getting the right people at the table and directing that vision.

Essentially, my job is to marry corporations with people. I believe that to be successful as a community and society, we must continue moving forward and pursue those things that promote growth. Related to that, I think one of my personal strengths is being able to relate to people, and in the process, I’m better able to promote a shared vision of growth. What are your immediate goals for AEDC?

We’re working on our response at the local level to changes to the Industrial Tax Exemption Program. Previously, the state would award exemptions with no input from the 1012industryreport.com

local level. Now, the locals get to decide what they want to give in the way of tax exemptions, and to what extent. So we need to figure out what that will look like … what kind of resolution we are going to write. We have formed a task force comprised of all the people who would need to be part of the decision making, as well as working on structuring a document and getting everyone to agree to it. It’s important that we eliminate any uncertainty about the program, so how we’re going to handle that will be the biggest thing to tackle right off the bat.

of potential anticipated jobs, we’re looking at thousands of jobs, and that’s just for those projects that are further along.

Do you notice any impediments to growth in Ascension Parish?

What do you feel is the ultimate mission for AEDC going forward?

To lay a foundation for the future, we need to adequately address our infrastructure and workforce development needs. I think a lot of what I do is going to be focused on how to find funds to address those things. The goal is to have adequate infrastructure in place to make project recruitment easier, so people can get out of the plants, onto the interstate and where they need to go. If not addressed, this could potentially impede our ability to attract new industry. Regarding workforce development, the model for the future will be marrying industry with education centers. If you look at the pipeline

Essentially, it’s the continued growth of projects. The petrochemical industry is huge in the background of this parish, so we want to continue promoting co-locations and other programs that really utilize those assets. Obviously, we already have a nice portfolio of LED-certified sites in place here, ready for development, so we’re really geared for industrial development. At the same time, we do want to diversify as much as we can in a way that is advantageous. I wouldn’t say that we’re going to be a software development mecca here in Ascension Parish, but we’re always open to new industries.

your partner in

pr gress

Would you say that Louisiana Economic Development’s FastStart program is a vital component of this training model?

DEMCO gives your business the power to grow.

Training is a significant cost for employers, and when you train them but don’t retain them for long then you not only lose the employee but the dollars invested in them. To an extent, FastStart alleviates that through prescreening and specialized training programs.

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/DEMCOLouisiana

A C lea rer Pa t h

It's no secret that our people set us apart. P&N’s professionals are highly involved in state and local organizations and stay on the cutting edge of developments within Louisiana. P&N is a leader in delivering diverse and innovative services to industrial companies. P&N’s Industrial Team is deeply committed to helping businesses

COURTESY BASF

navigate Louisiana’s industrial expansion and plan for sustainable

INDUSTRY RISING: Continued project growth is the Ascension Economic Development Corporation’s mission as Kate MacArthur sees it. BASF is doubling MDI capacity at its Geismar plant to 600,000 metric tons annually. Construction will begin in 2018.

1012industryreport.com

growth. That’s why we believe we oﬀer a clearer path – for our clients, the industry and Louisiana’s economic growth.

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Postlethwaite & Netter ville, A Professional Accounting Corporation

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

LAUNCH: MARKET WATCH

THE ASSOCIATED PRESS

TIMELINE

The Louisiana connection Westinghouse Electric Corp. is founded as an American manufacturing company.

Jim Bernhard Jr. founds the Baton Rouge-based Shaw Industries Inc. as a fabrication shop. The company grows into The Shaw Group Inc. through a series of acquisitions, and at its height is among the Fortune 500, with 25,000 employees and $6 billion in revenue.

1886

1873

Toshiba is founded as Japan’s first maker of telegraph equipment.

“IF YOU WANT TO understand why Toshiba Corp. is about to report a multibillion-dollar write-down on its nuclear reactor business,” Bloomberg wrote in February, “the story begins and ends with a one-time pipe manufacturer with roots in the swamp country of Louisiana.” That pipe manufacturer is The Shaw Group, founded by Baton Rouge’s Jim Bernhard. Shaw’s troubled foray into nuclear power has now impacted no less than three century-old powerhouses—Toshiba, which acquired Westinghouse Electric in 2006; Westinghouse Electric Co., which

1889 Horace E. Horton establishes Chicago Bridge & Iron Company in Chicago and opens the company’s first fabrication plant in nearby Washington Heights.

20 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

Toshiba pays $5.4 billion to acquire a 77% stake in Westinghouse Electric. Shaw buys a 20% stake.

2006

1987

2000 Bernhard rushes in at a bankruptcy auction and—after an 18-hour bidding war—buys Stone & Webster, an engineering company that had built MIT’s campus and many U.S. nuclear plants from the 1950s to the 1970s, for $150 million. The name gave Shaw Group new credibility in the coming nuclear renaissance, eventually helping it win Westinghouse contracts.

hired Shaw in 2008 to handle construction of two reactor projects at Plant Vogtle (above) in Georgia and subsequently acquired its nuclear construction and engineering business; and CB&I, which bought the Shaw Group in 2012. Westinghouse has filed for bankruptcy and Toshiba is selling its prized NAND flash memory unit to cover its nuclear losses. And those two Georgia reactors that were to open in 2016 and 2017? They’re now slated—optimistically—for 2019 and 2020. Here’s how it all unfolded. —Penny Font

The Shaw Group sells its 20% stake in Westinghouse to Toshiba, eliminating $1.7 billion in debt. At the time, Westinghouse was only weeks from receiving the Nuclear Regulatory Commission’s coveted design certification for the AP1000 reactor.

SEPT. 2011

2008 Westinghouse signs deals to build four reactors for utilities Southern Co. and Scana in Georgia and South Carolina, and hires Shaw to handle the construction. It is the first U.S. company to win nuclear power plant construction permits since the 1979 Three Mile Island accident.

SOURCES: Bloomberg, The Associated Press, IndustryWeek, The New York Times, FuelFix, TheStreet 1012industryreport.com

WILLIAM JACOBS JR., Georgia’s independent construction monitor for the Vogtle project, to the state’s public service commission in 2012. The Shaw Group disagreed with that characterization.

S ES PR

IA TE

“[Shaw Modular Solutions, part of The Shaw Group] clearly lacked experience in the nuclear power industry and was not prepared for the rigor and attention to detail required.”

Toshiba Chairman Shigenori Shiga resigns. The company says its net worth is in the negative, at minus $1.7 billion, and is looking for potential partners to acquire a stake in Westinghouse.

FILE PHOTO

FEB. 14, 2017

SPRING 2012

APRIL 2016

Nuclear Regulatory Commission inspectors discover steel in the foundation of one reactor had been installed improperly, and a 300-ton reactor vessel nearly falls off a rail car. Improper welds were also used on nuclear modules and had to be redone.

Toshiba accuses CB&I of inflating Shaw’s assets by $2.2 billion and asks to renegotiate. CB&I sues Toshiba for breach of contract in July; a preliminary decision in December rules in favor of Toshiba, but CB&I has appealed.

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President Donald Trump’s administration becomes so alarmed that Chinese investors may try to purchase Westinghouse’s nuclear business that they take extraordinary steps to prevent the company from falling into Chinese hands—including searching for an American or allied buyer and considering government investment in the company directly in return for an equity stake. Chief among their concerns is the disclosure of nuclear technology secrets that could be used for military or civilian purposes. Westinghouse has been a repeated target of Chinese espionage—five Chinese military officials were indicted in absentia in 2014 for allegedly stealing trade secrets through computer hacks, and the state-owned China General Nuclear Power Corp. was indicted in 2016 for conspiring to steal restricted nuclear technology.

Toshiba wins approval from angry shareholders to sell its prized flash memory business to offset liabilities from the bankruptcy of its Westinghouse nuclear energy unit. At deadline, a bidding war had emerged, with reported bids in the $18 billion to $28 billion range. Reports indicated that both Apple and Google were interested in having a stake.

MARCH 30

APRIL 4

MARCH 29, 2017 Westinghouse—which now owns most of Shaw’s assets—files for Chapter 11 bankruptcy protection after warning of a possible $6.2 billion writedown on the nuclear energy business. Its parent company, Toshiba Corp., is seeking a buyer.

GREGORY JACZKO, former head of the U.S. Nuclear Regulatory Commission

APRIL 11

THE ASSOCIATED PRESS

JULY 2012

“There’s billions and billions of dollars at stake here. This could take down Toshiba, and it certainly means the end of new nuclear construction in the U.S.”

FILE PHOTO

Shaw Group sells for $3.3 billion to Chicago Bridge & Iron. Three years later, CB&I sells the bulk of Shaw’s assets to Toshiba, which owns Westinghouse, for $229 million, shedding liabilities related to the nuclear projects.

Grappling with billions of dollars in losses from Westinghouse, Toshiba Corp. warns it may not be able to continue as a going concern. The disclosure comes as the company reports earnings after missing two previous deadlines for financial results. Toshiba posted an operating loss of $5.2 billion for the nine months ended Dec. 31, but could not get auditor PricewaterhouseCoopers Aarata to approve the figures. 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

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LAUNCH: INTELLIGENCE

DIALOGUE

Attracting millennial talent More than one in three American workers today are millennials, and in 2015 they surpassed Generation X to

become the largest share of the American workforce, according to a Pew Research Center analysis of U.S. Census Bureau data issued last summer. Yet recruiting them—and retaining them—remains an elusive challenge for many employers, particularly in heavy industry. We asked nine executives and human resource experts in the sector to share their strategies.

—David Jacobs

We embarked on a massive recruiting program about five years ago. We want to offer a very aggressive career path. Millennials are eager. You hire aggressive, talented people, and they want to be challenged and given the opportunity to excel in their career, based on the success that they have. So we want to put them in that position. We also want them to be involved in what we’re doing from a technology standpoint. LEE JENKINS Executive Manager, Performance Contractors

We’ve got to explain to people how much fun the stuff is that we’re doing and the cuttingedge technology that we’re allowed to play with, like data analytics and cloud mobility. That stuff attracts millennial developers and technology managers and engineers. You’re getting to work with bleeding-edge technology and implement it in the field. When you leave at the end of the day, you know you’ve made a difference, and I think that’s what the millennials want. STEPHEN TOUPS Executive Vice President, Turner Industries

Millennials are interested in understanding why their work matters, so you need to be willing to spend the time to explain the bigger picture. They want to know that they can make a difference, both within the company and as part of a bigger vision or plan. Young people care about having flexibility in their schedules, so if your company can offer that, emphasize it. Does your company offer professional development? If so, market your commitment to increasing their skills. Emphasize travel when possible and that you pay top dollar for talent. NATALIE HARDER Chancellor, South Louisiana Community College Chair, One Acadiana Workforce Committee

Millennials flourish in teams, love networking and live for encouragement and affirmation. They do not like top-down management, so an environment of consensus management that provides structure, leadership and guidance works best. They need to be heard, and their ideas understood. They are hard-working, but adhere to a life-work balance by adapting readily to change, multitasking and utilizing technology as a work multiplier, freeing up time for life. Companies that create cool, fun, high-energy work environments, where everyone’s contributions are appreciated and recognized, attract some of the best and brightest millennials. RICHARD SMITH Vice President of Business and Workforce Development, Southwest Louisiana Economic Development Alliance

You have to be real, candid and transparent to engage the most socially aware and environmentally conscious generation we have experienced to date. It is all about a diverse culture and the feeling of collective contribution—getting out, getting dirty and making an impact. It has been critical to our success to create this environment and the opportunity to take their trained talent, expertise and passion into the greater Baton Rouge, New Orleans and surrounding areas to build stronger, more sustainable communities. SHAWN LOACHRIDGE HR Regional Leader, Dow Chemical

For our plant, and plants along the corridor, it’s really about the partnerships that we have with the River Parishes Community College and the Baton Rouge Community College process technology programs. That is a great pipeline to tap. I know there are some facilities that only look at people that have gone through those community college programs.

We have a robust internship program, where the intern performs work directly related to their field of study. We also have a Professional Development Organization at the Lake Charles site for networking, teamwork, development, philanthropy and other activities. The organization has leadership roles; they govern themselves within defined parameters. We find that millennials are much less likely to leave when they are engaged both at work and outside of work with their teammates. It creates a great sense that they are part of something bigger that they don’t want to let go of. CURTIS BRESCHER Director of Operations, Westlake Chemical

They want flexibility. They don’t want to be really tied down, and we have to know that going in. They don’t want to spend 30 years in the same location. They also want to have flexibility in the job that they’re in, including flexible hours and working from home. Compensation is important, but perks and benefits are even more important. LORI DAVIS President, Rig-Chem

Millennials want to be connected to a purpose. We want to develop great people that solve challenges for our customers and our communities. When they contribute time to a community organization, we’ll make a donation to support the things that they’re passionate about. We’re re-engineering our whole incentive program so we can really draw a more direct line to what their goals are, and how that relates to the company’s goals. PAUL DANOS Executive Vice President, Danos

GROVER HALL Senior HR Business Partner, Geismar site, Williams Olefins

1012industryreport.com

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

LAUNCH: TECHNOLOGY

things you need to know about the INDUSTRIAL INTERNET of THINGS By JERRY MARTIN

1. WHAT IS IT? According to Kevin Walsh, vice president of marketing for Bsquare, the IIoT is an “array of technologies allowing businesses to use data generated by connected intelligent devices (i.e., things) to drive improved business outcomes.” But Walsh also notes, “things leads many to believe we’re principally focused on tiny, inexpensive devices such as sensors. While this is often the case, ‘things’ may also be 18-wheel big-rig trucks, manufacturing equipment and intelligent power meters, to name just a few.”

24 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

2. WHEN IS IT? It’s still early in the onrush of the IIoT, but experts predict a dizzying pace of acceleration. “The progress of digital adoption by companies remains sluggish,” says Eric Schaeffer of Accenture. “Research conducted by Accenture for the World Economic Forum showed that 73% of the C-level executives interviewed were convinced that the IIoT would fundamentally change their industry, but just 20% had a thought-through strategy for harnessing it.” His recommendation: Act now.

1012industryreport.com

3. ANALYTICS IS

5. DON’T LET

A FUNDAMENTAL CAPABILITY.

YOUR WORKERS GO OFF POORLY DRESSED.

Says Schaeffer: “Use analytics to gain insights and decision support from data gathered by connected products and other data sources. ... A manufacturer that does not use data analytics, even at a project level, will be at a major disadvantage.”

Even the clothes and equipment your employees wear are potential gold mines in the IIoT. Reduced costs, improved productivity and increased safety are all driving the development and deployment of “smart” textiles, “smart” wearables and “smart” personal protective equipment (PPE). “In November 2016, Forbes shared a heatmap by Forrester that listed the industries with the most opportunity for wearables and sensors. The hottest sectors included chemistry, oil and gas, primary manufacturing and industrial production,” notes Lior Akavia, co-founder and CEO of Seebo.

4. YOU SHOULD

BE LISTENING TO YOUR MACHINES, BUILDINGS AND PRODUCTS.

Says Schaeffer: “Automation already is transforming manufacturing in the automotive and industrial equipment industries with sensors and control mechanisms now embedded in most machinery.”

QUESTION

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See how Barriere did it on the French Branch I – 10 project at: barriere.com/projects-awards

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LAUNCH: PEOPLE LEE CELANO

Executive Profile: Robert Gelinas

native of Canada, Robert Gelinas’ career in chemical engineering has taken him around the world. His first job in Canada was for BF Goodrich before a series of transfers took him to Germany, Belgium and eventually Texas. From there, he landed in Lake Charles as plant manager for BioLab, an industry leader in the development and marketing of innovative products that provide clear water for pools and spas. He speaks fluent French and English and has a working knowledge of German; he became a U.S. citizen in 2010. As plant manager, Gelinas is perpetually on the job, responsible for both performance and safety. Through the years, he’s learned the importance of listening and clear communication. He says that part of his job involves keeping the community safe, and his résumé includes a long list of community service. He’s helped to raise more than $14 million for United Way of Southwest Louisiana over the past six years and serves on several industry boards. Now close to retirement and reflecting on a decades-long international career, Gelinas wants to serve as a mentor for the younger generation, hopefully leaving behind a perfect safety record and a dedication to continuous improvement.

—Erin Z. Bass

What is your secret to leadership and advancing in your field?

Be a good listener; this is how you learn. Communicate clear strategies and goals to your team, always strive for continuous improvement, be passionate about safety, report results, recognize good achievement and be visible on the shop floor. What is your favorite part about what you do?

Contact with people and interacting with all levels of the organization. Meeting goals and celebrating 1012industryreport.com

NAME

Robert Gelinas POSITION

Plant Manager COMPANY

BioLab Inc. AGE

achievements is very satisfying. At this stage of my career, I want to be a mentor for people and try to develop them by sharing my experience. What is one thing about your job people don’t expect or don’t know and hear about?

I guess they don’t hear about the calls, text messages and emails in the middle of the night or on weekends. Plant managers are on call 24/7. What are some of the biggest challenges that come with working in your industry?

Recruiting and retaining good employees. It is a very competitive market. Also, meeting all agency and permit requirements, being cost competitive and keeping everybody safe, including the community. What do you see for the future of your industry?

Growth. More pools will be built with the economy recovering. We have new products on the market that are growing our sales, and import duties on Chinese products

make American-made products more affordable.

HOMETOWN

Shawinigan, Quebec

What other leadership roles do you hold in the community and/or what volunteer efforts do you support?

EDUCATION

B.S., Chemical Engineering, Sherbrooke University

I am on the board of directors of Louisiana Chemical Association. I am the chairman of the board of the Louisiana Chemical Industry Alliance. I am on the board of the United Way of Southwest Louisiana and just completed my sixth campaign for major industry. I am a member of the Lake Area Industry Alliance and was president for two years.

Houston, New York, San Francisco. I also play golf and—being Canadian—I spend a lot of time watching my favorite hockey team on TV.

What is your most satisfying professional accomplishment?

If you could have any job other than your own, what would it be?

My international career. I learned languages and exposed my children to different cultures and countries. What is your favorite way to spend your time?

I spend a lot of time at home, but I like to travel a lot, too, to Europe, Mexico, Canada, New Orleans,

What is an item on your “bucket list”?

Spend one week in Tuscany with my wife and play Pebble Beach golf course with my son and grandson.

Professional golfer. What do you do to unwind?

I unwind every Friday afternoon by smoking a cigar and drinking a good glass of Scotch. I also work around the house taking care of the yard and like to drive my Corvette.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

COVER STORY

TOOLS OF EFFICIENCY AS COST OVERRUNS PLAGUE GULF COAST PROJECTS, OWNERS LOOK FOR ANSWERS.

BY SAM BARNES

nyone in industry will tell you cost overruns are the norm rather than the exception in the dynamic world of refinery and chemical plant construction. Capital projects almost always cost more and take longer than original plans proposed. The causes are as recognizable as they are plentiful: insufficient planning and inaccurate estimating, poor controls, ineffective management, inadequate communications, contract ambiguity, cash constraints, poor productivity and a lack of adequate skilled labor, to name a few. Although certainly not a new problem, cost overruns have taken a more serious tone following the Great Recession, and the various solutions and best practices, along with their pros and cons, have become favorite topics inside boardrooms and convention halls. According to Independent Project Analysis Inc., more than 50% of today’s megaprojects in the oil and gas, refining, chemicals, minerals, and power industries fail to meet business objectives. The problem is particularly prevalent in Louisiana. In one high-profile example, the state’s largest active industrial project—Sasol’s massive Lake Charles petrochemical complex—has an expected price tag that is now 25% higher than originally projected in 2014. Fortunately, at a current cost of $11 billion, Sasol says it is now on budget with a projected 2018 startup. In Louisiana and across the Gulf, attempted solutions to the efficiency problem are plentiful, but they have varying degrees of success. Shell Chemical’s Geismar plant stands out as an exception to the rule. The project, a $717 million

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expansion of its alpha olefins plant, is now 25% complete. The project is on schedule and on budget, and managers hope to keep it that way. Construction of a fourth AO unit (AO4) began in early 2016 to bring the total production at Shell’s Geismar site to more than 1.3 million tons per year, making it the world’s largest alpha olefins producer. “Based upon where we are right now, we believe we can deliver on our earliest date in the schedule,” says Shell Geismar General Manager Rhoman Hardy. “We’re still on budget.” Timeliness is especially important given that individual units will be brought on line as they are completed, beginning as early as this year. Randy Mill, Shell’s AO4 project manager, credits planning and contractor engagement for the project’s success so far. “For us, productivity and efficiency are construction-based,” Mill says. “It essentially boils down to three things—an effective pre-assembly strategy, our planning process, and the tools that we use in the background to enable efficiency.” THE LABOR SUPPLY FACTOR While there are some shining examples of efficiency along the industrial corridor, the dismal fact is that cost overruns are running rampant, says Tony Salemme, vice president of Industrial Info Resources in Sugar Land, Texas. “Most of the major projects in the Gulf Coast are way over schedule and way over budget,” Salemme adds. “That’s just the bottom line facts. Nobody wants to speak to it. They don’t want to be clear about the numbers. It shows up in their financial statements or in their annual reports if they’re a public company.” 1012industryreport.com

COURTESY AIR PRODUCTS

SWEATING THE DETAILS: An Air Products plant operator examines gauges at its industrial gas facility in Convent.

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COVER STORY

A big part of the problem is inaccurate cost forecasting, which is exacerbated by inevitable changes in market dynamics. Salemme cites scheduling, engineering and labor issues as the primary causes. “The smart owners are more analytic, use more big data and try to quantify their timelines against labor supply,” he adds. “Unfortunately, labor supply has remained static and is contracting.” Economist Loren Scott of Loren C. Scott & Associates in Baton Rouge says some companies are waiting to pull the trigger on large capital projects, in no small part due to fears of cost overruns and

negative impacts on return on equity caused by rising wage rates. “The big boom in projects is both here and in Texas, so the only way that folks like Turner Industries, Performance Contractors and Cajun Contractors can get enough people during this boom is to pay them more. That ends up impacting return on equity,” Scott says. “Some of these industrial owners are reexamining their timing. They want to get on the other side of this huge increase in labor demand. In the process, maybe they’ll get a break on the cost.” Of course, there’s a certain level of risk in waiting too long. “You always

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want to be the first in line to have your product available to consumers, because once you get your foot in the door, that’s way better than having to try to get your foot in the door when somebody’s ahead of you,” Scott adds. “They’re playing a game there that’s tricky.” MODULARIZATION MEETS PLANNING While modularization—the practice of preassembling certain plant units—is becoming more commonplace as a means of managing project efficiency, Shell’s Geismar plant has found added value in building the modules onsite rather than offsite.

That has been part of the plant’s strategy from the beginning. “When you have our constraints, such as the Mississippi River, getting over the levee and the overhead pipe racks inside the plant, a module strategy really simplifies your world,” Mill says. While available land has given Shell the ability to build the modules on site, Mill says many plants could find available space if properly motivated. “You have enough space for a laydown yard, right? It’s just about pushing yourself.” The benefits in time and cost from the onsite modularization process have been obvious, and in the end 1012industryreport.com

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COURTESY SHELL CHEMICAL

ON SCHEDULE: Shell Chemical’s Geismar expansion stands out as an exception to efficiency challenges along the Gulf Coast. The project, a $717 million expansion of its alpha olefins plant, shown here, is now 25% complete. The project is on schedule and on budget, and managers hope to keep it that way.

provided Shell with one prevailing advantage: stability in schedule. “Had we not done it this way, we would’ve added to the construction time at the back end because nothing would’ve progressed until the foundations were completed,” he adds. Additionally, Shell has taken a traditional 30-60-90-day planning process and adapted it to achieve a higher level of anticipation. As its name implies, a 30-60-90 analysis outlines specific activities for the coming 90 days of a project. By incorporating a greater level of detail, the modified Shell process helps minimize the unexpected. 1012industryreport.com

“It’s an extremely detailed schedule that we download into an Excel file, and each item within the schedule is mapped against a dozen different readiness criteria before it hits the field,” Mill says. “We sit weekly and review the forecast for a month, two months or three months down the road. That way there are no surprises and we’re able to pull up a lot of items within the schedule.” The project’s prime contractor, Turner Industries in Baton Rouge, facilitates the planning process, in collaboration with the project team. Stevie Toups, executive vice president at Turner, compliments the forethought of Shell’s site leaders, saying that one of the biggest missteps on other projects is inadequate planning. “The most successful jobs right now are way out on the front end,” Toups says. “Everybody’s talking, everybody’s looking, and they’re saying, ‘Where are the pitfalls?’ ‘What are the problems we’re going to have?’ For those projects that go well, by the time we arrive the long lead items have been ordered, and the engineering is done and tied up with a bow on it. There are always changes and there are always things that happen on the fly, but don’t send us to the field with engineering 20%, 30% done.” Technology also plays a role in Shell’s success. Two software programs—ConstructSim and Jovix— quickly convert 3-D models into work packages ready for the field. “When a piece of work is identified in the 30-60-90 process, and we can confirm that it’s good to go, it is ultimately put into a work package that gets handed to the field,” Mill explains. HARNESSING BIG DATA As industry grapples with cost overruns, some groups are actively searching for solutions. A trio of national construction associations is set to launch an online tool in the third quarter of 2017 to track labor productivity and address declining performance levels. The platform aims to create an accepted methodology by which projects can be benchmarked through the commonly used online tool, Construction Labor Market Analyzer, by using productivity

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COVER STORY data from the Construction Users Roundtable and the Construction Industry Institute. The tool will allow companies to input projects into the CLMA in the planning stages and track productivity over the entire life cycle, providing a forward-looking view and a simplified productivity score over chosen periods. Daniel Groves, CEO at CLMA, says it became apparent that a tool was needed to augment existing capabilities. “We had a conversation with an owner recently who said, ‘We’ve gotten to the point where we’re happy when we have a productivity factor of two, which is 50% productive.’ There’s a high degree of motivation to try to address this productivity challenge and get it improved. “This tool is top down. We want to know at a high level about your productivity performance. The goal is to build a database that we will use for creating a metric in the marketplace against2nd which Qtrowners can #1 benchmark their project. That way, AD WILL RUN AS IS they can identify the adjustments

that need to be made along the way to get back on track.” Closer to home, the Alliance Safety Council in Baton Rouge is promoting a tool called eTracker, which allows users to pinpoint concerns and issues that are impacting productivity. The product enables owners to solve issues and leverage those solutions throughout the project. The results can then be used on other projects to address similar issues, thereby maximizing its value. More specifically, eTracker dynamically discovers issues and concerns related to both productivity and safety, provides timely information on existing issues to encourage collaboration and expedite meaningful solutions, leverages solutions throughout a specific project (as well as others) to multiply the value, and recognizes and rewards managers and workers who bring new ideas and innovation to the forefront. The product is developed jointly by the council’s productivity partner, John W. Toups of Thibodaux, and a private developer. Alliance Safety Council President/CEO Kathy Tra-

MANAGING EFFICIENCY: Turner Industries expanded its portfolio to include information and data management as a way to manage efficiency at an industrial site.

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han says she is working to pilot the system with interested member contractors. The partnership between the safety council and eTracker can offer an online service that could allow small and large companies to re-energize the workforce, reduce costs, increase quality, and safely meet and exceed both schedule and budget. Turner Industries, in a move toward vertical integration, expanded its portfolio to include information and data management as a way to manage efficiency at industrial sites. Its Integrated Solutions Group creates mobile process safety software solutions to manage procedures, process limits and rounds. By assisting in the capture, development, re-engineering, cleanup and standardization of the clients’ processes, Integrated Solutions Group tools provide users with more effective field data and increase the efficiency of the work site. “Everybody talks about big data,” Toups says. “Well, this is harnessing the data that’s right there in front of you, right at your site. Obvious-

ly, any data you can gather on the operation of a unit is something that is going to make you more efficient. Any data you can gather from these units and these operating machines helps you. ‘Do I need to replace that unit?’ ‘Does it need to be included in this round?’” AN ACADEMIC APPROACH Industrial efficiency is being tracked at the university level as well. The U.S. Department of Energy recently designated the LSU Industrial Assessment Center as one of 28 IAC centers in the U.S. As such, the program provides free industrial assessments on energy efficiency, productivity, sustainability and competitiveness to small and medium‐sized manufacturers across Louisiana (annual sales below $100 million or fewer than 500 employees at a plant site). An LSU IAC team consisting of faculty and students has already begun evaluating plant sites, and in the process is providing plant managers with recommendations for reducing energy use, lowering production

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COVER STORY costs and other improvements. For each recommendation, a detailed analysis is provided on its initial implementation cost and expected payback period. Rebecca Harris, business manager for the LSU IAC, is responsible for coordinating the assessments. “We are functioning as a full-service program where we highlight areas that companies should consider changing or improving in order to see some cost savings and protect their business,” Harris says. “We also look at things like productivity and waste. We even look at some cybersecurity issues, which is a hot topic right now.” The program is affiliated with The Louisiana Chemical Manufacturing Initiative, a specialized community that received designation from the federal government as an IMCP (Investing in Manufacturing Communities Partnership). “A lot of our partners within the LCMI have been interested in participating in this program,” she adds. Although the LSU IAC is new, several assessments have already

CATCHING UP: Sasol’s Lake Charles Chemical Project at its sprawling complex in Westlake, shown here, has an expected price tag that is now 25% higher than originally projected in 2014. Fortunately, at a current cost of $11 billion, Sasol says it is now on schedule for a projected 2018 startup.

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COURTESY SASOL

been completed, with a goal of 17 to 20 assessments through the end of the year. “We are training engineering students at LSU to work with our faculty to go out into these facilities and perform these assessments. We are trying to communicate that not only are they getting these assessments for no cost, but they are contributing to the education of 10 engineering students at LSU. “As a result of this, we would like to see them implement these recommendations. We want them to see the value in reducing their costs. That’s what we like to see at the end of an assessment process.” An IAC database is available through the Department of Energy, where recommendations are documented for future reference. LSU will receive about $1.5 million over five years in the form of cooperative agreements. PEOPLE FIRST No matter the process or methodology used to corral costs or improve efficiency, Shell Geismar site leaders feel that none of it would be effective

without employee engagement. “We believe that by taking care of people the way you should, people will take care of you,” says Shell’s Hardy. “This is demonstrated in both tangible and intangible ways.” At its AO site, Shell constructed an air-conditioned facility, complete with more than 30 televisions and free Wi-Fi. “It’s a nice facility for all of our craftworkers to eat lunch, have safety meetings, etc. It also serves as a tangible way to show them, ‘We care about you. You’re not just somebody that’s going to come in here and do a job and then leave, and nobody ever thinks twice about it.’ ” Shell also conveys the “people first” concept in other ways, primarily in how it treats and communicates with employees and contractors. “We tell them about our successes and we tell them about our failures, and make them all part of the process,” Hardy says. “The bottom line is we want them to be a part of what we’re doing here because, quite frankly, they are. We want to treat them as such.”

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NEWS COMPANY PROFILE

Winds of change

BY SAM BARNES |

PHOTOS COURTESY GULF ISLAND

The jackets supporting wind turbines off the coast of Rhode Island were engineered in New Orleans and built in Houma.

COUNTRY’S FIRST: Deepwater Wind, a leading U.S. offshore wind and transmission developer, incorporated Gulf Island’s offshore platform capabilities to develop its five-turbine wind farm in the Atlantic Ocean.

arket fluctuations are an ever-present reality in the oil and gas industry, which means a company like Gulf Island Fabrication must be quick to respond to new opportunities. After all, its very existence was born out of the oil and gas downturn of the mid-1980s, when co-founders Doc Laborde and Baton Rouge catalog showroom industry magnate Huey Wilson created the Houma company to build offshore oil platforms.

Since those early days, Gulf Island—now headquartered in Houston—has become a leader in the fabrication, maintenance and servicing of structures, facilities and vessels within the energy sector and beyond. With several locations along the Gulf Coast, its craftsmen have built several “first of their kind” structures around the globe. So when Gulf Island got the call from Deepwater Wind to assist with the fabrication of the jackets for the country’s first offshore windfarm, it jumped at the chance. The company

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had been watching the fledgling offshore wind market for years, waiting for the right opportunity. Deepwater Wind, a leading U.S. offshore wind and transmission developer, wanted to incorporate Gulf Island’s offshore platform capabilities to develop its five-turbine wind farm in the Atlantic Ocean off the coast of Block Island, Rhode Island. Roy Francis, Gulf Island’s senior vice president of business development, says his company began actively pursuing wind farms earlier this decade after recognizing simi-

larities to work it was already doing. A native of Destrehan, Francis came to work at Gulf Island more than 11 years ago. “We knew that if the industry ever started to take off we wanted to be a part of it,” he adds. “We had talked to Deepwater and provided them with budgetary pricing and talked through the constructability of it. We realized that the jackets were quite similar to the ones we were building for platforms in the Gulf.” Ultimately, it proved to be a good 1012industryreport.com

EXPANDING EXPERTISE: Gulf Island Fabrication’s craftsmen have built several “first of their kind” structures around the globe.

BORN OF A DOWNTURN: Gulf Island Fabrication was founded in the mid-1980s. Doc Laborde and Baton Rouge catalog showroom industry magnate Huey Wilson created the Houma company to build offshore oil platforms.

relatively large layoffs, but it wasn’t to the magnitude that it might have been. We were somewhat successful in placing certain personnel within our other companies.”

diversification move for Gulf Island. “We have the necessary capacity and 32 years of experience building foundations. It was a good interaction and a good customer.” The 30-megawatt wind farm came on line last fall. Francis says the project came along at just the perfect time—the oil market downturn has significantly impacted the production of 1012industryreport.com

new platforms in recent years. “Our numbers are down right now like the rest of the industry.” Bill Blanchard, vice president and general manager of Gulf Island’s fabrication group in Houma, says when times are good there are about 450 workers at the facility, but the oil drop hit them hard. “We probably got down to 100 and maybe 60 in the field,” he adds. “We have had some

COLLABORATIVE APPROACH In 2015, Metairie-based Keystone Engineering handed off the Deepwater design documents to Gulf Island to begin the fabrication of the foundations, jackets and piles. A strong working relationship with Keystone was key to the project’s success—the two companies have collaborated on dozens of projects for 30 years. “Relationships such as ours are relatively common within the industry, where Keystone knows our pros and cons and strong suits, so to speak, and they are able to adapt the design to suit our facility,” Blanchard says. Throughout the design process, Keystone leaned heavily upon SACS Offshore Analysis and Design

software for the design and loading analysis of the structures, while Gulf Island’s Lee Barrios, senior project manager, and Richard Rieve, operations manager, participated in early constructability sessions to iron out potential issues with meeting cost and deadline targets. Designs differed somewhat from a typical oil or gas platform, primarily because of the load exerted by the force of the massive wind turbines. “Most platforms are designed to hold a static gravity load,” Blanchard says. “Conversely, wind turbine foundations are designed to support a very long vertical stick that’s swaying, with a lot of horizontal and cyclical moments applied to them. So, it takes a completely different jacket stiffening style.” Jacket components were fabricated in assembly line fashion within existing facilities at the Gulf Island yard using a “core group” of workers. At peak, nearly 300 workers were involved in the fabrication of the

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NEWS: COMPANY PROFILE various components, including pipefitters, welders, sandblasters, scaffold builders and painters. “From start to finish, you’ve got a variety of different crafts that are all working on the project in different phases,” Blanchard says. “At any given time, you might have the jacket leg components being fabricated as other components are coming out of the pipe mill. You might have piling that’s being put together in a separate location, and then the braces being put together. It all gets transferred to the field, where they perform the actual assembly.” The jackets range from 93 to 108 feet tall, with each having its own complexities. “It was more of a serial manufacturing process,” Blanchard says. “In general, they were identical, except for a little bit of length added on. There were five jackets, or lower foundations, and five deck sections, which were just an extension of the jacket up to a point above the water line where the mating flange to the turbine was connected.” In the end, there were 10 different component sections, two for each of the five sites. “They were mated together offshore,” Blanchard adds. HOMEGROWN Another Louisiana company, Montco Inc. of Galliano, helped assemble the wind farm components from a liftboat after their arrival in the Atlantic. Coincidentally, Montco’s boat—normally used for the decommissioning of offshore oil and gas platforms—was also fabricated by Gulf Island. “It was definitely a step change for us from our normal oil and gas activities in the Gulf of Mexico,” says Joe Orgeron, chief technology officer at Montco. Still, it wasn’t the first time that Montco has worked “outside the box.” Most recently, the company offered its liftboat services to a consortium of European scientists taking core samples in the Atlantic and the Gulf. “After we were finished working for the scientists, we got picked up by Deepwater Wind,” Orgeron says.

RHODE ISLAND RIG: The first foundation for Deepwater Wind’s turbine is placed off the coast of Rhode Island. Designs differed somewhat from a typical oil or gas platform, primarily because of the load exerted by the force of the massive wind turbines.

“Early on, they hired us to do the site-specific cores for the locations where the wind turbines would ultimately be located.” Although another contractor was initially hired to install the foundations and upper deck, the company underestimated the heave and sway of the Atlantic, making it apparent that a liftboat would be the most reliable way to finish the assembly. “They successfully placed the jackets with no problems,” Orgeron says. “The problem came when they had to hammer piles through the legs to affix and secure the jackets to the sea floor.” The “pin piles” were nearly 130 feet long. While there are roughly a dozen liftboat companies operating in the Gulf, none has a boat the size of the one used by Montco. Liftboat “Robert” is the largest currently operating in U.S. waters. When in operation, the boat literally lifts itself out of the water using its legs as support on the ocean floor. In turn, a 500-ton crane mounted on the boat maneuvers and places the jacket components. Due to the boat’s width (137 feet)

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and leg length (335 feet), Montco was forced to stay in deepwater while in transit to the site, meaning it had to go around the tip of Florida and up the East Coast. UP AND RUNNING Now that the Block Island Wind Farm is operational, the potential

for future offshore projects seems limitless, and as such Gulf Island and Montco hope to continue reaping the benefits. Deepwater Wind, led by a veteran team with extensive experience in developing renewable energy projects, is actively planning offshore wind projects located 15 or more miles offshore to serve multiple East Coast markets, including New York, Massachusetts, Rhode Island and New Jersey. The company is owned principally by an entity of the D.E. Shaw group, with more than $35 billion in assets. GE Renewable Energy supplied the five 6-megawatt Haliade wind turbines for the new Block Island wind farm. In addition to the turbines, GE Renewable Energy’s offshore wind business is providing long-term services and maintenance for the project. The Block Island Wind Farm is GE Energy Financial Services’ second offshore wind investment this year, building upon the company’s $12 billion renewable energy investment commitments in more than 18-gigawatts of wind and solar projects. “Our success here is a testament to the hard work of hundreds of local workers who helped build this historic project, and to the Block

ON THE LINE: Jacket components were fabricated in assembly line fashion within existing facilities at the Gulf Island yard in Houma using a “core group” of workers.

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Islanders and the thousands more around the U.S. who’ve supported us every step of the way of this amazing journey,” said Deepwater Wind CEO Jeffrey Grybowski in a prepared statement. The U.S. could add as much as 86,000 megawatts of offshore wind power by 2050, according to the U.S. Department of Energy. If that happens, DOE says it could cut greenhouse gas emissions by 1.8% and support 160,000 U.S. jobs. To fuel the advancement of wind power, a coalition of northeastern U.S. governors recently announced that it would push for the extension of the 30% renewable energy investment tax credit and continue federal research and development efforts. GULF ISLAND EYES FURTHER DIVERSIFICATION Gulf Island’s Francis is quick to point out that his company’s diversification is not limited to offshore wind farms. Gulf Island also operates a service company and ship yard and is expanding its portfolio of services. In the process, it will be

better able to weather the ebbs and flows of the oil and gas market. “We do everything from building inland and offshore vessels and barges and repair yards to vessels,” he adds. “We have fabrication facilities and we have a company that does service work offshore or onshore (painting, blasting and coastal infrastructure work). While we’ve traditionally been in oil and gas, we’ve now diversified to build onshore modules for infrastructure.” Gulf Island recently delivered an onshore module to Trinidad and is currently working on another at its Houma fabrication facilities. More recently, Gulf Island acquired LeeVac Shipyards, a Covington-based marine fabrication firm with shipyards in Jennings and Lake Charles. Kirk Meche, Gulf Island’s president and CEO, said in a statement “the acquisition of the LeeVac assets further diversifies our business, enhances our marine fabrication and maintenance and repair capabilities, and provides our company with facilities in key strategic locations.”

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Storm over Bayou Bridge

BY SAM BARNES

Pipe for a $670 million pipeline through south Louisiana is ready to go. But its owners are awaiting the regulatory green light.

s the second phase of the contentious Bayou Bridge pipeline awaits permit approval from state and federal agencies, the entirety of the pipe has already been produced. Stupp Corp. has more than 117 miles of the custom-ordered pipe, equating to 30,000 pipe tons, sitting at its Baton Rouge facilities, ready to go once the project gets the green light. Not without its detractors, the $670 million pipeline would transport an estimated 280,000 barrels of crude oil a day between hubs in Nederland, Texas, and St. James Parish once completed and operational. Bayou Bridge is jointly owned by subsidiaries of Phillips 66 Partners, Energy Transfer Partners and Sunoco Logistics Partners. The first leg of the pipeline, 1012industryreport.com

connecting Nederland to facilities and refineries in Lake Charles, was completed in 2016, while the second, lengthier phase will continue the pipeline eastward to St. James Parish. In the process, the pipeline would cross 11 southern Louisiana parishes as well as the Atchafalaya Basin. The owners estimate the project would provide $17.6 million in sales tax revenue, $750 million in total infrastructure investment and $1.8 million in property taxes during the first year of service. “The pipe will be ready to go once

they tell us to start doing the loadouts,” says Chip McAlpin, Stupp’s vice president – corporate strategy and development. “One of the benefits of some of the reduced capacity or utilization in the pipeline industry right now is that we’re not as full, from a yard standpoint, as we have been in previous years, so we have existing space to store the pipe.” Energy Transfer Partners spokesperson Vicki Anderson Granado says starting early with the pipe milling was necessary to keep the project on schedule. “I guess you

“The pipe will be ready to go once they tell us to start doing the load-outs.” —CHIP MCALPIN, above, vice president for corporate strategy and development, Stupp Corp.

could say that it’s a little bit of a risk, but your infrastructure projects in this country would lag greatly if you waited until all of the permits were done before you started the milling process.” Besides, she adds, the 24-inch-diameter pipe could be used on other projects in a worst-case scenario. Ultimately, 12 permanent jobs would be created by the pipeline, bringing ETP’s total employment in the state to 765. Nationwide, the company maintains about 71,000 miles of pipeline, transporting natural gas and crude oil. REGULATORY LIMBO Until the regulatory permitting process is complete, ETP is unable to provide a timeline for construction. While the Louisiana Department of Natural Resources granted

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NEWS: ENERGY

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FULL HOUSE: Protesters turned out full force in Baton Rouge for a January public hearing on water quality permits for the Bayou Bridge pipeline. Below: At a rally against the pipeline before the public hearing.

a coastal use permit in early April, go-aheads are still needed from the Louisiana Department of Environmental Quality and U.S. Army Corps of Engineers before construction can begin. “The public hearing phases are over, so now the regulatory agencies are taking all of the environmental information that we’ve submitted, as well as our permit application, and reviewing all of the public comments,” Granado says. Some of the more vocal comments have come from environmental groups such as the Louisiana Bucket Brigade, Atchafalaya Basin Keepers and the Louisiana Crawfish Producers Association. The groups claim the pipeline would cause irreparable damage to the state’s wetlands. In a statement released in January, they argued that oil companies “have done irreparable damage to our homeland, our wetlands, our coast and the Atchafalaya Basin.” “These companies can very clearly afford to do things by the book, yet because of lack of enforcement of our environmental laws we are paying the bitter consequences, and so will many generations to come,” the statement reads. Furthermore, the groups claim that the U.S. Army Corps of Engineers is inadequately equipped to review permits for com-

pliance, and that any permits should be postponed until the industry is properly regulated. Of course, oil and gas producers take a different stance. “Pipelines are the safest way to transport any product, whether it’s water, carbon dioxide, natural gas, etc.,” says Gifford Briggs, who was acting president of the Louisiana Oil and Gas Association as this article was prepared. “The impact to the environment is significantly less, and the impact on individuals and their safety is much improved, than many other modes of transportation. That’s why Louisiana, which is extremely heavy in industrial, and oil and gas, has so many pipelines—because we must move so much product and we must do it in the best manner possible. That’s why pipelines make the most sense. “There’s a place for trucking, there’s a place for rail and there’s a place for pipelines, and often in Louisiana pipelines make the most sense.” While the state already has a significant infrastructure of pipelines in place, Briggs says there’s still not enough to support future industrial expansions. “When we’re adding $100 billion in new facilities and plants that need natural gas and are going to create new products and ship those products, you’re going to

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need additional infrastructure,” he adds. “In the process, we’re able to use the best technology available to put new pipelines in the ground with higher capacities and less environmental impact. That’s something we should celebrate.” For ETP, the proposed route for Bayou Bridge is already in place. “Still, it’s never set in stone, so there may be a tweak here and there [to the final route],” Granado says. Even though the pipeline materials are finished, the company has yet to announce a contractor to install the pipeline and associated facilities. “Until we get approval and we’re able to move forward and get into the execution stage, that’s not something that we can talk about.” IN THE NICK OF TIME McAlpin says the Bayou Bridge project helped avoid hundreds of layoffs by providing a large, sustaining project that carried his company through a particularly low production period. “This project allowed us to save about 250 jobs,” he adds. “That is a huge economic impact for us, being able to keep those folks employed. The order sizes that exist in the market right now are small and it’s hard to ramp up your manpower for those. We need a large base load

to have the crews in place, and then we can take on additional work in smaller sizes and keep the assets utilized and employees in place.” Without Bayou Bridge, McAlpin feels certain that the layoffs would have continued through early 2017. Stupp began production of the pipe in early September and completed the process in mid-November. “We have two pipe manufacturing plants on this campus, and our sister company next door, Stupp Coatings, applied the corrosion coating that goes on the exterior of the pipe,” he adds. A fusion-bonded, anti-corrosion coating was applied to all of the pipe, with some sections also receiving abrasion resistance or a concrete coating. By applying additional weight, the concrete coating will allow ETP to sink the pipe in water environments, while the abrasion resistance provides an extra layer of durability to the pipe’s exterior. Stupp—a custom manufacturer that produces pipe for specific orders—follows stringent standards in the production of its pipe materials, driven primarily by federal and state statutes. McAlpin says that ETP goes a step further, and has some of the more stringent specifications in the business. “They have their own specifications that go above and beyond the basic stan1012industryreport.com

Feb/Winter

AD WILL RUN AS IS

dards,” he adds. “Furthermore, each pipeline project will usually have its own unique set of specifications in terms of the manufacture and testing of the pipe that directly apply to the intended use, service and application of the pipeline.” Stupp buys the lion’s share of its pipe steel from domestic sources, such as U.S. Steel, ArcelorMittal USA and Steel Dynamics Inc. After Bayou Bridge clears the regulatory hurdles, placement of the pipeline will begin in multiple locations. “Pipelines aren’t necessarily built in a linear fashion,” ETP’s Granado explains. “They’re built in spreads, and there are perhaps multiple spreads under construction at one time.” Once operational, the pipeline will be monitored 24 hours a day through control centers operated by ETP. “We have centers in San Antonio, Houston, Sugar Land, and one in the Northeast,” she adds. “They monitor the pipeline on a continuous basis. If there’s a change in pressure on a pipe, or a change in temperature, that is detected immediately. During such an occurrence, we would remotely shut a valve to isolate that particular section of pipe.”

Still, for environmental groups those assurances fall on deaf ears. Protests are being orchestrated by a variety of groups opposed to the pipeline, including one held in late March by the Louisiana Bucket Brigade outside the New Orleans office of the Louisiana Department of Natural Resources. The group focused on recent “accidents” near the proposed route of the pipeline. “Over 12,000 gallons of crude oil were spilled during an accident at a tank farm in St. James Parish, with the Plaines All American Pipeline Co. reporting as ‘unknown’ the amount that went into ditches in the area. Across the state, in Lake Charles, six days of flaring from area chemical plants and the CITGO Refinery resulted in dangerous chemicals released into the air,” it said. “People in Louisiana—and especially in Lake Charles and St. James—already bear an unfair burden of pollution,” said Anne Rolfes, founding director of the Louisiana Bucket Brigade. “This pipeline destroys wetlands, threatens our drinking water and puts us at risk for more pollution.” The group promised that additional protests would follow, aimed at stopping the pipeline.

THE BAYOU BRIDGE ROUTE The Louisiana extension of the Bayou Bridge pipeline, a 162-mile route that begins at Nederland, Texas, will connect major Louisiana hubs at Lake Charles and St. James Parish. It will be buried a minimum of 3 feet underground across the route, paralleling existing infrastructure such as pipelines, power lines and roads. When completed, it will be capable of transporting up to 480,000 barrels of oil per day.

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

Iberia Is... T H E BU SI N E S S

Iberia Parish is centrally located between Houston and New Orleans with access by land, air and water. With the Port of Iberia and Acadiana Regional Airport, access to state highways, interstates and railway, we can move your business. Our Cajun culture make our communities welcoming and a great place to live, work and play. Whether your road to successful growth or expansion lies in large or small business, all roads lead to Iberia Parish.

Iberia Industrial Development Foundation

Iberia Economic Development Authority

For more information contact Mike Tarantino, Executive Director (337) 367-0834 | mtarantino@iberiabiz.org | www.iberiabiz.org

THE AVIATION

Acadiana Regional Airport is located off US Highway 90, the future corridor of Interstate 49. It is a fully certificated and instrumented General Aviation airport with an 8,002 foot, military grade, concrete runway, fully staffed Air Traffic Control Tower, a new passenger terminal open for executive, VIP, Air Charter and Air Taxi services, and support services. The 2,000 acre airport complex is home to over 50 companies and has land to expand including prime runway and taxiway frontage.

For more information contact Jason Devillier, Director (337) 365-7202 | jdevillier@iberiagov.net www.ﬂyiberiaparish.com

THE INDUSTRIAL

The Port of Iberia is a 2,000 acre industrial and manufacturing site home to over 100 companies involved in oil and gas fabrication, materials handling, marine services and more. The Port of Iberia has direct access to the Gulf Intracoastal Waterway and the Gulf of Mexico. There is prime waterfront property available with utilities, 200’ wide channel, 13’ depth with no height restrictions and L&D Railroad on site.

44 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

For more information contact Craig F. Romero, Executive Director (337) 364-1065 | craigr@portoﬁberia.com www.portoﬁberia.com

1012industryreport.com

NEWS: ENVIRONMENT PLACING THE PLATFORM: The underwater jacket for a decommissioned platform owned by Stone Energy at South Timbalier Block 172 (an offshore designation) is placed on a barge by Montco Offshore Inc. for transport.

COURTESY MONTCO OFFSHORE INC.

Manufactured habitat

Louisiana’s ‘Rigs to Reefs’ program offers a cost-effective solution to the energy industry and a boon to fish in the Gulf. BY SAM BARNES

hile in its essence an environmental solution, the practice of converting offshore platforms into artificial reefs is usually a matter of financial common sense. Number crunchers working for oil and gas companies weigh a host of factors when determining if a decommissioned platform is better off scrapped or reefed. In the end, it’s a decision tied closely to the bottom line. Louisiana is one of the biggest proponents of artificial reef creation in the U.S. Through its Artificial Reef Program, which falls under the federal Rigs to Reefs Policy as overseen by the Bureau of Safety and Environmental Enforcement, the state utilizes obsolete oil and gas platforms as habitats for many of Louisiana’s coastal fishes. Since the 1012industryreport.com

state program’s inception in 1986, 71 oil and gas-related companies have participated by donating the “jackets” of decommissioned oil and gas structures. Some 390 structures have been reefed in Louisiana waters. Mike McDonough, artificial reef coordinator at the Louisiana Department of Wildlife and Fisheries, says cost determines a platform’s eventual fate, impacted by its distance from shore and proximity to designated reef locations. “If you’ve got a shallow water platform that’s close to shore, it’s usually cheaper to just take it to shore for scrapping,” he adds. “When the distance to the reef site is too big, that drives up the cost of reefing and drives down the financial savings.” One potential cost-saving move could encourage participation—new LDWF regulations allow some platforms to reef in place, thereby

negating the expense of transporting the structures. IRON IN THE GULF Over 7,000 offshore oil and gas platforms have been installed in the Gulf of Mexico since 1947. For whatever reasons, fish and other marine life find these structures to be an extremely useful part of their ecosystem. (One study of rigs in the Pacific found they hosted seven times the aquatic population of even the rich natural reefs of the south Pacific.) In addition to meeting the world’s energy needs, the infrastructure of the oil and gas industry has literally formed one of the world’s most extensive de facto artificial reef systems. Simply removing the rigs after they are no longer in use equates to “a public loss of productive marine habitat,” the LDWF website notes. But federal law and international

treaty require that platforms be removed one year after production ceases. Elena Kobrinski, a researcher at the Harte Research Institute for Gulf of Mexico Studies at Texas A&M in Corpus Christi, says Rigs to Reefs programs have become increasingly important in the eyes of the federal government due to the sheer number of idle platforms currently sitting in the Gulf of Mexico. “We have almost 3,000 platforms in the Gulf right now, and as of January 2016 we have 243 idle platforms and 2,089 wells sitting idle,” Kobrinski said, speaking at the Gulf of Mexico Oil Spill & Ecosystem Science Conference in New Orleans in February. “These numbers are going to continue to increase and the federal government is responsible for managing this.” In January 2015, decommissioning costs were estimated to be a staggering $2.3 billion. While the original lessee is responsible for removing the structures, subleases and bankruptcies have complicated the issue. “The original lessee is no longer in the picture and those sub-lessees might not have the money to remove the structure at the conclusion of the lease contract,” Kobrinski says. As such, the federal government becomes liable for the structures. To address the problem, in 2010 BSEE released “Decommissioning Guidance for Wells and Platforms,” also known as the “Idle Iron Policy,” forcing companies responsible for structures no longer in use to remove them within three years. Subsequently, in 2013, the agency offered a deadline extension should a company be in current negotiations to enlist a structure in a Rigs to Reefs program. While downturns in the oil and gas market have negatively impacted program participation in recent years, that’s not the case for offshore oil and gas powerhouse Fieldwood Energy LLC, which has reefed 40 platforms since its founding in 2013, well over half of which were in Louisiana waters. “In deciding whether to reef a jacket, a big factor is just the sheer size of it,” says John Seeger, Fieldwood’s vice president of decommissioning. “If we can bring it to shore for disposal, we’ll do that as our first

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

NEWS: ENVIRONMENT course of action. However, if it’s too large or impractical, we’ll reef it.” In the wake of the recent BSEE policy change, Seeger has noticed a paradigm shift at the federal level, saying that permitting process times have shortened. Still, permitting takes anywhere from six to 12 months and involves multiple federal agencies, including BSEE, the U.S. Coast Guard and the Army Corps of Engineers. “There have been a lot of changes to the program over the last 12-18 months on the federal side, and it’s important for industry, and for the public as well, for it to continue,” he adds. TRANSFORMING A PLATFORM McDonough and his staff follow a fairly simple process for determining if a platform is an eligible candidate. “A company might have some concept that it’s close to one of our reef sites, or they might just want to reef it and not know what’s nearby,” he says. “At that point, we’ll look at the location and the water depth for that structure, which of our reef sites are

nearby, and whether there’s enough room for it.” McDonough also ensures that the eventual location for the jacket will have adequate clearance, enlisting feedback from the U.S. Coast Guard. “I try to provide the owners with several options, just in case there might be some reason that the closest or the deepest reef site

isn’t necessarily their first choice.” McDonough then reviews the financial aspects of the proposal to ensure its accuracy as compared to similar projects. Ultimately, the state receives 50% of the savings from a reefed platform as a donation to the Artificial Reef Fund. During the reefing process, offshore oil companies such as

COURTESY FIELDWOOD ENERGY

ON ITS WAY: A Versabar VB-10000, using catamaran-style lifting technology, transports a jacket owned by Fieldwood Energy to the MC-148 reef site.

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Fieldwood reef everything below the water line—aka the “jacket” of the oil platform—while scrapping the rest. “The production equipment, wires and topside equipment are all removed, disposed of or reused,” Seeger says. “What stays is the substructure from the water line down to the mud line.” The jacket is then either reefed in place or barged to its ultimate destination. Joe Orgeron, chief technology officer for contractor Montco Offshore Inc. of Galliano, says his crews disassemble the platforms from one of the six lift boats in their fleet. “At some point in time these platforms produced hydrocarbons from reservoirs below the sea floor, so the first order of work is cementing up the borehole and cutting that infrastructure 15-20 feet below the mud line,” Orgeron explains. Montco then uses internal abrasive cutters to cut the structural support pipes for the boreholes and the jacket legs, or piles. “We take off the helideck and all the tanks and vessels and basically prepare for the

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DON KADAIR

COURTESY LDWF

Mike McDonough, artificial reef coordinator for the Louisiana Department of Wildlife and Fisheries

jacket to be reefed,” Orgeron says. “We’ll then move away for a floating derrick barge to grab it. Tugboats will then tow the derrick barge, with the jacket on the hook, to a designated reef location.” DUAL BENEFITS In managing the program, McDonough, who has a master’s degree in oceanography, and his staff divide their responsibilities between reef locations in either offshore or

MARINE LIFE: Above, a snapper swims through a jacket reefed in 2000 at the Eugene Island 313 reef site, located 87 nautical miles off the coast. This particular jacket was reefed in place. At right, a jacket donated by Chevron is “toppled” at LDWF’s South Pass 89 reef site.

inshore locations. He says mapping out locations for reef sites is a collaborative effort. “When the program was created, there was a process where they would gather together all the different user groups that would be affected by the artificial reef program—whether it be shrimpers, commercial fishermen or recreational anglers.” From the information they provided, LDWF proposed and developed the first of the designated reef sites.

In 1999, Louisiana created the world’s largest artificial reef out of a Freeport McMoRan Corp. sulfur rig off Grand Isle. The sulfur mine reef is now composed of more than 29 structures. The reef program has also developed 30 inshore reefs in Louisiana waters, primarily low profile reefs composed of shell or limestone. Ultimately, Louisiana’s Artificial Reef Program strives to develop artificial habitats for marine life,

while providing the dual benefit of reducing decommissioning costs. “With any old oil platform, you see a lot of organisms swimming around it, feeding off it, etc.,” McDonough says. “Clearly, there’s some dynamic going on there, and if the platforms are removed that dynamic is gone. So, when we create a reef site out of a platform—instead of it being removed entirely—we’re able to keep some of that benefit.”

Civil Construction

Structural Services Industrial Buildings

GroupContractors.com | 225.752.2500 1012industryreport.com

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

FOCUS TRANSPORT

Working on the railroad

BY MEREDITH WHITTEN

Everyone agrees the New Orleans Public Belt is a critical cog in the global economy. What to do with it is another question.

POWER PLAYER: More than 1,500 different commodities ride the NOPB rails each year.

Orleans Mayor Mitch Landrieu and his administration took office in 2010. “When we came in office in 2010, the Public Belt was embroiled in a scandal,” says Ryan Berni, the city of New Orleans’ deputy mayor of external affairs. “We were kind of surprised to learn the city even owned a railroad.” It’s understandable that the cityowned railroad was not high on people’s radar. The Public Belt takes

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no tax money, but also contributes nothing to tax revenue. This piqued the mayor’s interest. “The Public Belt is one of the only city assets that doesn’t have a direct financial relationship with the city,” says Berni. “The Public Belt is greatly undercapitalized. Given the global dynamics around private infrastructure, there is an opportunity to improve and enhance the railroad’s economic relationship with the city, the port and its customers.”

COURTESY PORT OF NEW ORLEANS

or 109 years the New Orleans Public Belt Railroad has served as a catalyst for regional economic development by connecting the Port of New Orleans with railroad services. Since beginning operations in 1908, the NOPB has had a primary mission of serving both the port and local industries. Owned by the city of New Orleans and a designated political subdivision of the state of Louisiana, the NOPB—a short-line Class III switching railroad—operates as a separate, neutral and financially independent entity. The NOPB plays a vital role in not only the local and regional economies, but in the national and global economies, as well. Rail traffic volumes have increased with global trade, and the NOPB is an important link in expediting local and intermediating freight through the strategic New Orleans rail gateway. New Orleans is one of four gateways connecting the eastern and western United States with six Class I railroads: BNSF, Union Pacific, Canadian National, Kansas City Southern, CSXT and Norfolk Southern. (Railroad class is based on revenue.) In addition to the six Class I railroads that directly connect with the Public Belt, the NOPB also has a strong local customer base, largely resulting from demand driven by companies located on Port of New Orleans property. Examples include Ceres Gulf Inc., Destination Truck and Rail, Pacorini Metals USA, and U.S. Gypsum Co. Yet despite the NOPB’s well-established history in the region, few residents are aware that the city of New Orleans actually owns a railroad. This was the case when New

EVALUATING THE ASSET The city hired consulting firm KPMG to evaluate possible options for the NOPB, including maintaining the status quo, selling the NOPB outright, and entering into a long-term public-private partnership in which a private operator would run and maintain the Public Belt. In April 2016 KPMG determined the valuation of NOPB’s assets was between $61 million and $196 million. Ultimately, the city opted to pursue a public-private-partnership approach, which would “keep the city and port competitive and neutral, while having a private capital partner grow business and increase efficiency and safety,” Berni says. The city opted not to sell the NOPB outright, in part, because of potential risks to the local customer base from removing the Public Belt from public governance. “We looked at the pros and cons of all three options,” Berni says. “We wanted an option that would allow us to better make strategic investment, allow for the efficient movement of freight, have the best economic impact, particularly on jobs, increase the financial stability of the railroad and have a great increase in tax revenue. And, the option would have to work for the citizens of New Orleans, who are the owners, as well as the port and customers.” The city’s objectives include increasing the amount of tax revenue generated for the city by increasing business activity with the Public Belt and the port; growing the comprehensive NOPB business and being a complementary partner to grow cargo at the port; increasing economic activity throughout Orleans Parish and the New Orleans region, including job growth; and retaining 1012industryreport.com

LOOKING FOR A PARTNER In January the city issued a nonbinding request for qualifications (RFQ) for a private partner to take over operations, capital improvements, maintenance and carrier responsibilities of the NOPB’s core rail operating assets for 40 years. The private operator would be responsible for capital improvements and maintenance. The lease includes the Huey P. Long Bridge over the Mississippi River. The city would retain ownership of the NOPB. The city is seeking at least $20 million in upfront payments and at least $1 million in annual lease payments over the 40year period, resulting in at least $60 million for city coffers. Five ventures responded, and the city now is in the process of reviewing the submissions. Up to five will be shortlisted and invited to submit final, binding proposals. The city expects the process of selecting a

THE ASSOCIATED PRESS

and growing the existing labor pool through higher volume/rail throughput.

RAIL REVENUE: When New Orleans Mayor Mitch Landrieu took office in 2010, the New Orleans Public Belt was embroiled in scandal. Now the city is on the hunt for a private operator to run and maintain it, with hopes of bringing in at least $60 million for city coffers.

preferred respondent to be complete by mid-summer. From the city’s perspective, entering into a public-private partnership provides an opportunity to not only bring in revenue from the long-term lease, but also to bring in funding for critical capital projects and maintenance activities that would increase not only throughput, but

also competitiveness and safety of the NOPB. Yet the city faces strong opposition to its plans for entering into a long-term lease with a private operator. The NOPB and its users, the Port of New Orleans, the Board of Trade, the Louisiana Railroad Association and the Greater New Orleans AFL-CIO have expressed

opposition to the idea of leasing operational authority of the Public Belt to a private third-party corporation. They argue the move could actually make the Port of New Orleans less competitive and, ultimately, hurt the local and regional economies. Greater New Orleans Inc., a regional economic development alliance that serves the 10-parish region in southeast Louisiana, is neutral on the Public Belt issue, according to Caitlin S. Berni, vice president for policy and communications, who is married to Deputy Mayor Ryan Berni. “We were not set up to be a revenue generator for the city,” says Doug Campbell, NOPB’s interim CEO. “We were set up to help the city and the port grow. There’s concern that a private group would come in that is driven by profit. The question we ask ourselves is, ‘What’s best for the port, the city and the growth of this area?’ That’s what drives us. It’s not, ‘How can we make $10 million this year?’ If the city gets a bid for $20 million or $1 million a year for the next 40 years, is that life-changing for a city the size of New Orleans?”

ABOUT THE NEW ORLEANS PUBLIC BELT Currently, the NOPB has an annual capacity of 204,000 cars with annual switching volumes of approximately 150,000 cars from Class I railroads and local customers. It has about 75 miles of track assets, including main track, yard track and an out-of-service segment. The NOPB also owns the Huey P. Long Bridge over the Mississippi River and 11 operational locomotives. The NOPB provides diversified rail services on its line inclusive of switching, storage, track maintenance, and car and locomotive repair services. The number of NOPB trains that run per day varies across several strategic segments of track, but overall ranges from six to 18. The NOPB’s primary source of revenue comes from rates paid by the railroads using the tracks, including switching. Additional sources of revenue come from fees the NOPB charges for rail car repair, intermodal revenue driven by container traffic and rail car storage revenue generated by the charges for extending holding of rail cars on tracks, and from leasing NOPB-owned nonoperating land parcels. The NOPB has direct access to the port, which is directly connected to every major North American market via 14,500 miles of waterways. More than 1,500 commodity types are transported on the Public Belt each year. Examples include chemicals, pulp and paper, petroleum products, intermodal containers, aggregates and food products. Currently, the Public Belt Railroad Commission, comprised of the mayor of New Orleans—who serves as president—and nine mayor-appointed members, oversees the NOPB. Under the proposed public-private partnership, NOPB would maintain a small management team to oversee a reduced portfolio of assets and responsibilities. 1012industryreport.com

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

FOCUS: TRANSPORT

“We were not set up to be a revenue generator for the city. We were set up to help the city and the port grow.”

CHERYL GERBER

—DOUG CAMPBELL, interim CEO, New Orleans Public Belt

THE PROFIT MOTIVE As a public entity, the NOPB is tax-exempt, and the Port of New Orleans does not charge the NOPB rent for using port-owned properties. The primary argument against the proposal to lease operation of the Public Belt is that a for-profit operator would raise rates or decrease service. “We fear a private operator would come in and immediately raise rates,” says Brett Bourgeois, executive director of the New Orleans Board of Trade. “The cargo our users represent is very price-sensitive. If the price increases, they will go look for other ports.” Brandy Christian, president and CEO of the Port of New Orleans, says the current rates are “reasonable and manageable.” “The port is very satisfied with the current model and service—we’re not calling for any change,” she says. “Introducing a private profit motive into the rate structure will necessarily raise the current rates. That raises the specter of a loss of competitiveness for the port and its customers. We operate in a very competitive business and the [importance of the] Public Belt cannot be overstated.”

Bourgeois adds that a private operator could reduce the level of service to port users. “This would affect getting from point A to point B in a timely manner, so then we’re dealing with a time issue,” he says. “The Public Belt is a very important cog in the wheel that makes everything run.” Those who oppose leasing the railroad’s operations also express concern about preferential treatment for some users. They stress that maintaining an independent, neutral entity is essential. “The Public Belt is a neutral entity that has no favoritism to any of the railroads—all carriers are treated the same,” says Carmack M. Blackmon, general counsel and legislative representative with the Louisiana Railroads Association. “All six Class I’s that operate in New Orleans and utilize the Public Belt have advised city officials that they prefer to retain the status quo. They are not interested in a third-party, for-profit operator.” THE CHOKE POINT Blackmon adds that when one or two railroads get higher priority over the movement of freight, traffic starts to back up, which affects the bottom line for the railroads. In

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turn, there could be ramifications for the regional economy. Tiger Hammond, president of the GNO AFL-CIO, elaborates on this. “Privatizing operation of the NOPB would reduce port competitiveness by increasing the cost of business once the privatized railroad exploits the natural railto-port choke point, forming a de facto monopoly,” he says. “If the economic pressures inherent in the port’s choke point are not balanced by thoughtful government public action, then the city of New Orleans will lose some of its natural competitive advantages in the global marketplace.” Christian notes this neutrality is a founding principle of the NOPB. “The railroad was established as an independent, neutral party to ensure the provision of equitable and competitive switching service to the port’s facilities, customers and industries,” she says. “This independent role is still needed to ensure that the Class I railroads do not use rate-setting and service practices to gain a competitive advantage.” The Port of New Orleans, which has invested more than $100 million in capital improvement projects since 2012, including the $25 million Mississippi River Intermod-

al Rail Terminal, has experienced consistent growth in recent years, Christian says. But she adds that the port has experienced somewhat of a “chilling effect on business because of the uncertainty” surrounding the Public Belt’s future operational structure, with several port tenants already expressing concerns about changes to the railroad’s operations. “The Class I’s are trying to make decisions about introducing services, and their business model is based on existing rates. For now, they are not spending capital,” Christian says. However, according to Berni, “A lot of uncertainty has been because of attempts to stop or delay this process, especially early on. Once we got to this point, I think we’ve moved pretty swiftly.” Additional concerns include that a private operator could develop its own infrastructure, such as warehouses or a transload facility, nearby and compete with port customers. Also, all NOPB employees, except for management, are unionized. The NOPB has 180 employees. A GROWTH OPPORTUNITY One reason that the port and its stakeholders, local industry leaders and local labor associations support maintaining the current operational 1012industryreport.com

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CHERYL GERBER COURTESY NOPB

COURTESY NOPB

model is, they say, because concerns they had with the NOPB and its commission were addressed in 2011. After a state legislative audit, the NOPB underwent significant changes, including the resignation of the then-general manager. At the time, the idea of selling the NOPB was suggested. Instead officials instituted management and organizational changes supported by the Port of New Orleans, the Board of Trade and the NOPB itself. Those changes vastly enhanced the Public Belt’s operations, they say. “The Public Belt is running better than in recent memory,” says Campbell, NOPB’s interim CEO. “The Public Belt is an efficiently run railroad and we’re creating partnerships in the right way. Customers are coming to us and asking what else we can do for them. That’s almost unheard of in railroads.” Instead of privatizing operations, Campbell and others say, the status quo should be maintained, with a focus on options to grow the railroad and add capacity that the NOPB has identified, such as expanding the railroad’s operations into St. Charles and St. Bernard parishes, as well as expanding France Yard to accommodate expected customer growth in New Orleans East. After the city selects a preferred respondent this summer, any longterm lease agreement with a private, third-party operator will have to be recommended by the NOPB’s commission and then forwarded to the City Council for approval. “It’s a very complicated, technical issue and there are a lot of hurdles and a lot of players,” Christian says. “It’s more than just a New Orleans issue—it’s a regional and national issue, as well.” Berni agrees, even if the city has a different perspective from other stakeholders. “If we look at what drives discussions in the 10/12 corridor, there’s port expansion, increased trade opportunities and a lot of opportunity for growth,” he says. “We’ve got a unique situation because of the six Class I’s and we’ve got an opportunity to make a strategic decision regarding investment in this asset (the Public Belt) for the region, including customers and taxpayers.”

ON TRACK FOR GROWTH: Critics of the public-private-partnership plan say the NOPB is working better than ever. The mayor’s office sees an opportunity for a more strategic investment.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

COURTESY GREATER LAFOURCHE PORT COMMISSION

FOCUS: TRANSPORT

Saving La. 1

The shortcomings of a roadway built to bring vacationers to Grand Isle in their Model T Fords now has major implications for the nation’s oil supply.

CRITICAL ACCESS: The roadway serves as the lone land route to Port Fourchon and provides the sole highway access to the Louisiana Offshore Oil Port, the nation’s only offshore oil port.

By MEREDITH WHITTEN

he history of La. 1 in southern Lafourche Parish, in many ways, mirrors the history of economic development in the region. Built in the 1930s, the highway largely served to bring people in their Model T Fords to Grand Isle for recreation. Bayou Lafourche was not much more than a channel crossing fairly inaccessible land. Then, in 1960, the State Legislature authorized building a port in the marsh in an attempt to attract New Orleans’ lucrative banana trade. Although the banana industry never came, the energy industry did. Over the next 50 years, Port

Fourchon—Louisiana’s southernmost port—grew and developed to become the prime hub for domestic deepwater oil and gas exploration, drilling, and production in the Gulf of Mexico. Today, La. 1 supports 18% of the nation’s daily oil production and serves 90% of deepwater projects in the Gulf. Louisiana Highway 1 runs diagonally across the state, from Port Fourchon to northwest of Shreveport. The roadway serves as the lone land route to Port Fourchon and provides the sole highway access to the Louisiana Offshore Oil Port, the nation’s only offshore oil port. As such, the two-lane highway

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experiences significant industry traffic. According to the Louisiana Department of Transportation and Development, the average daily traffic count for La. 1 between Port Fourchon and Golden Meadow was approximately 10,000 in 2015. Industrial vehicles account for approximately 20% of La. 1’s traffic. Yet the highway was not built to handle either this volume or this type of traffic. “La. 1 is critical to Port Fourchon and to the business and industry in the port,” says Chett Chiasson, executive director of the Greater Lafourche Port Commission. “It’s our only road access to the port, so it’s

critical to the port’s ability to service the oil and gas industry.” At the same time, La. 1 is essential to the state’s commercial and recreational fishing industries and is vital for providing access for coastal restoration projects in Lafourche Parish and Grand Isle. La. 1 also is the only highway evacuation route for Grand Isle and Port Fourchon. UNDER WATER While the demands on La. 1 south of Thibodaux have risen, the road itself has been sinking. Coastal erosion, sea-level rise and ground subsidence have contributed to the highway’s vulnerability, with the 1012industryreport.com

COURTESY LA 1 COALITION

provides loans and standby lines of credit to projects of national or regional significance, and $60,000 from state general obligation bonds; these loans are being retired through toll revenues. La. 1 is the first project in Louisiana to use a TIFIA loan. The state also contributed nearly $13 million from the Louisiana Transportation Trust Fund and $63 million from the state general fund. Almost $125 million came from federal formula funds and earmarks. Industry has also contributed to the A WASHOUT: Damage to La. 1 south of Port Fourchon during Hurricane Isaac. Some 10,000 vehicles per day project, including helping traverse the roadway, which the National Oceanic and Atmospheric Administration predicts will be covered in water and impassable for more than 300 days per year in less than four decades. to fund the state’s share of the cost of the project’s road flooding even during low-level The $1.68 billion project consists Environmental Impact Statement. storms. The National Oceanic and of four phases. The $371.6 million, Atmospheric Administration pre11.2-mile Phase 1, consisting of a WHERE THE FUNDING ENDS dicts that by 2027, inundation levels two-lane elevated highway between The focus today is on Phase 2 bewill result in closing a seven-mile Leeville and Port Fourchon, was tween Golden Meadow and Leeville. section of the existing at-grade completed in December 2011. “This section remains a vulnerahighway between Golden Meadow Phase 1 was financed fairly equalbility. Phase 2 is essential for better, and Leeville for more than 30 days ly through local, state and federal more reliable access to the port,” per year. In less than 40 years, this funds. This included $136.4 million Chiasson says. portion of La. 1 will be covered in from the Transportation InfrastrucYet Phase 2, which would consist water and impassable for more than ture Finance and Innovation Act, a of an 8.3-mile, two-lane, elevated 300 days per year. program administered by the U.S. highway and cost at least $360 milWhen access to and from the Department of Transportation that lion, does not have the green light. port is cut off, the impact quickly The holdup? “Bottom line: it’s reverberates nationwide. In 2011, funding,” Chiasson says. “The right the U.S. Department of Homeland of way is bought. All the permits are Security concluded that a 90-day in hand. It’s all about the money.” closure of the existing section of The federal government has not La. 1 between Golden Meadow made a funding commitment for and Leeville could result in up to a Phase 2, and has rejected requests $7.8 billion loss in American gross by the state for matching funds in domestic product. In 2001, Conseveral federal transportation grant gress designated La. 1 as one of only 88 high-priority corridors nationwide because of its role as critical HIGHWAY BREAKDOWN energy infrastructure. Piece Description Cost Status Given the threats to La. 1 and the highway’s vital economic and Preconstruction Environmental clearance, engineering, $43.3M Complete rights-of-way, and utilities for Phases safety role, the La. 1 Improvement 1&2 Project was proposed to improve the reliability and resiliency of the La. 1 Phase 1 Two-lane elevated highway from $318.8M Complete Leeville to Port Fourchon (6.8 miles), corridor from U.S. 90 to the coast. plus two-lane overpass over Bayou The project has involved a range of Lafourche at Leeville, toll facility and organizations, including the State associated interchanges of Louisiana, Lafourche Parish, the Phase 2 Two-lane elevated highway from $360M Awaiting Greater Lafourche Port CommisGolden Meadow to Leeville (8.3 miles) funding sion, the Louisiana Transportation Phase 3 Four-lane at-grade highway from U.S. $340M Awaiting Authority, the La. 1 Coalition—a 90 to Larose (19.5 miles) funding nonprofit corporation working to Phase 4 Additional two lanes, Golden Meadow $660M Awaiting secure highway improvements—and to Port Fourchon funding the energy industry. 1012industryreport.com

programs. Funding applications and requests made to state government currently are under review. In a letter to the National Governors Association, Gov. John Bel Edwards listed Phase 2 as one of Louisiana’s top infrastructure priorities. Chiasson says the project is too large and costly for existing federal and state funding capabilities. “The struggle over the years has been that there’s no real mechanism in place to fund a project of this magnitude,” he says. “There are grant programs that provide funding for good, solid projects, but they try to fund as many projects as possible. If a grant program has $800 million, it’s not going to give one project $350 million. At best, they’ll give $15 million to $20 million for each project.” No funding has been identified for Phase 3, a four-lane at-grade highway from U.S. 90 to Larose, or Phase 4, which involves additional lanes from Golden Meadow to Port Fourchon as well. Additional toll revenues are unlikely to be used for Phase 2. “We can’t place another toll on this section—tolls are already high,” says LA 1 Coalition Executive Director Henri Boulet. Tolls are set to increase 20% every five years. “If we raise tolls beyond that, it could have an adverse impact on economic development and growth for our community,” he says. Thus, funding may have to come from multiple sources. Phase 2 has been broken into five segments, which could be built separately as funding permits. “If you’re going to live within those parameters, it’s going to take an intelligent, creative financing package to get this project done, and that takes a lot of time,” Chiasson says. WAITING ON THE LEGISLATURE La. 1 is just one of a long list of highway and infrastructure improvements needed across the state. In December the Governor’s Transportation Infrastructure Task Force recommended an increased revenue stream of $700 million annually to address the state’s $13.1 billion backlog of road and bridge needs, maintenance of the system and a $16 billion list of proposed

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

FOCUS: TRANSPORTATION TRANSPORT

PROTECTING THE WETLANDS

COURTESY LA 1 COALITION

LA. 1 TRAVERSES sensitive wetlands and marshes. The project is designed so that major portions can be constructed using “top-down” construction methods, which reduce construction impacts on wetlands. Phase 1 impacts were mitigated by construction of 69.65 acres of wetlands. For Phase 2, an area of at least 27.3 acres is proposed, which would exceed minimum requirements for offsetting wetland impacts with new marsh construction. In 2004, the La. 1 Improvement Project received the American Association of State Highway and Transportation Officials Presidents Environment Award. —M.W.

RISING FLOODWATERS: Old La. 1 flooded during Hurricane Ike. The two-lane elevated highway from Leeville to Port Fourchon is visible in the background.

infrastructure will be an administration priority, nothing has been proposed. “None of us knows quite yet what the Trump administration is going to come up with and how they’re going to fund it,” Boulet adds. “A lot is riding on what comes out of the state legislative session and what comes out of Congress.” CHIPPING AWAY Other potential funding sources include the U.S. DOT’s FASTLANE grants, which provide dedicated, discretionary funding for projects addressing critical freight issues facing U.S. highways and bridges. Funding from the Gulf of Mexico Energy Security Act is also a possibility. While the majority of GOMESA funding will go toward coastal restoration and protection, state law allows up to 10% to be used on “infrastructure directly impacted by coastal wetland loss.” In 2015, a controversial proposal to use

RESTORE Act funding for the La. 1 Improvement Project was shelved after coastal community organizations, including the La. 1 Coalition and several conservation organizations, agreed to pursue GOMESA funding instead. Both Boulet and Chiasson are confident the project will be funded and built, though perhaps not all at once as preferred. “We’ll continue to be persistent with all levels of government to get this project done,” Chiasson says. “We’re confident that we’ll see some small pots of money that we can tap into in the next year or two to get the project moving. We’ll plug along and chip away, and maybe start with a smaller phase. We have a plan to build in timely and affordable sections if we can’t get a bigger finance package done.” La. 1 remains a weak link in the region’s infrastructure. This was illustrated in 2012, when Hurricane Isaac resulted in closure of La. 1 be-

“At the end of the day, La. 1 impacts everyone.” HENRI BOULET, Executive Director, La. 1 Coalition DON KADAIR

megaprojects, including Phase 2 of the La. 1 Improvement Project. “Quite frankly, a lot of projects in Louisiana are in the same predicament because our state hasn’t funded infrastructure in years,” Boulet says. “We can barely keep up with existing highways. The state just doesn’t have the money to fund new projects.” Still, La. 1 advocates are optimistic the state Legislature, which was in session as 10/12 Industry Report went to press, will provide more financial support. “No one knows what will be negotiated out at the end of the legislative session,” Boulet says. “We’re hoping our state is in a better position and there will be funding available for infrastructure. We’re hopeful the project can move forward in the next few months.” In the buildup to the legislative session, Edwards said the state must consider a gas tax hike to address its infrastructure needs. By 2019, the governor said, the state won’t be able to afford to meet its match to draw down federal transportation funding without raising Louisiana’s gas tax, which he noted has remained at 16 cents per gallon for three decades. At the federal level, the situation is not much better. In its 2017 infrastructure report card, the American Society of Civil Engineers gave the nation a D+. ASCE blames decades of underinvestment for leading to the country’s deteriorating infrastructure. Although President Donald Trump has stated that investing in

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tween Golden Meadow and Leeville for 68 hours. Port Fourchon, which is built more resiliently, experienced 1 foot of water in some areas, but for no more than eight hours. “There was about a 60-hour window in which we could have been working for the energy industry,” Chiasson says. “After eight hours, we could have been in the port, bringing equipment offshore to get production back up and running. With an elevated highway, we could get everyone out for safety and everyone back in for production more quickly. You can’t really catch up on that missed production.” La. 1’s vulnerability has not cost the port business, he says. Earlier this year, the port commission announced the proposed development of an $800 million midscale liquefied natural gas (LNG) production and export facility. The port also has plans for a purpose-built repair and refurbishment facility to service deepwater oil and gas rigs. “If we didn’t have a plan to get La. 1 elevated and completed, we’d be in trouble,” Chiasson says. “To continue to move forward, though, we need to get that reliability better than it is now.” Boulet emphasizes that the future of La. 1 is more than a local issue. “Completing Phase 2 is critical to securing the nation’s energy supply,” he says. “The quicker Port Fourchon can help energy companies, the quicker energy production comes back on, and that benefits every U.S. citizen. At the end of the day, La. 1 impacts everyone.” 1012industryreport.com

COURTESY PORT OF SOUTH LOUISIANA

FOCUS: TRANSPORT

TERMINAL EXPANSION: The finger pier at the Port of South Louisiana’s Globalplex Intermodal Terminal in Reserve. The $19.5 million project came online in April 2013.

A deeper commitment

South Louisiana ports look to dredging of channels as catalyst for growth. By SAM BARNES

1012industryreport.com

state and federal money, and without it little can be done. NATION’S NO. 7 PROJECT Fortunately, the Corps appears to be making some headway. A proposed plan would deepen the Mississippi River’s main ship navigation channel from 45 to 50 feet between the river’s mouth and Southwest Pass, as well as dredge three “crossings” between New Orleans and the Port of South Louisiana. So far, the news out of Washington has been encouraging, as the Trump administration has made the $88.9 million project a high priority. The effort to deepen the channel is No. 7 on the administration’s Top 50 infrastructure projects, announced in January. Marti Lucore, senior project manager at the Corps’ New Orleans District office, says the Mississippi River deepening project was originally proposed decades ago. “We already have authority to go to a deeper depth, but we haven’t moved on constructing anything in 20 years,” Lucore says. “We have to make sure that it’s economically

justified, because we haven’t looked at this since the 1990s. Since so much time has passed, it’s not just a simple update; we must start over. That’s why it’s so comprehensive, to confirm that we’ve got our analysis right.” While the original plan called for maintaining a minimum 50foot depth from the Gulf to Baton Rouge, recent feasibility studies have shown that the greatest need extends only to the Port of South Louisiana, which occupies 54 miles of riverfront beginning about 17 miles upriver from the Port of New Orleans.

COURTESY PORT OF SOUTH LOUISIANA

he leaders of Louisiana’s deepwater ports are clamoring for deeper, more consistently maintained river channels, and their voices are getting louder. An increase in channel depths, they say, will lead to increased cargo capacities and an ability to handle larger vessels, which in turn will make them more lucrative ports of call. It’s hard to deny that the state’s ports are major economic catalysts. According to data provided by the Ports Association of Louisiana, about 400,000 jobs and $20 billion in personal earnings are directly attributable to the ports. In the lower Mississippi River alone, more than 500 million tons of cargo are moved on an annual basis, contributing to the state’s ranking among the top tonnage port locations in the country. Still, the need for a more dependable means of dredging remains a persistent problem, and a lack of funding is the culprit. Both the ports and the U.S. Army Corps of Engineers are largely dependent upon

Paul Aucoin, executive director of the Port of South Louisiana, says the deeper channel will open a new world for his port. Aucoin has been pushing for the project, as well as for ongoing funding of routine maintenance dredging. “This whole country needs to be aware of the importance of the mouth of the river and how it has to be dredged to 50 feet every day all day,” Aucoin says. “There are 31 states that depend upon the Mississippi River and those tributaries. Of the 59,000 grain barges that come here, about 40,000 are from the Midwest, and that grain depends upon the mouth of the Mississippi River.” Aucoin is encouraged by the Trump administration’s commitment to fund the river’s deepening. “If we’ve got a depth restriction at the mouth of the river, and you can only load a vessel down to 41 feet, that’s $1 million a foot that you’ve lost. Not only is it costly; we’re unreliable and they’re going to shop somewhere else.” Aucoin says this severely impacts Louisiana’s ability to compete. “If you’re sending something out at $22 a ton, but you can’t load the ship fully, suddenly that’s costing you $27 a ton. My goal is to find stand-alone, untouchable funding for the mouth of the river, which will benefit this entire country.” AN ECONOMIC BOON Brandy Christian, new president and CEO at the Port of New Orleans, says the trend toward larger vessels means ports and their various funding authorities must remain competitive, adding that the economic benefits of deepening the channel to 50 feet are irrefutable. “Based on Corps data, it would cre-

“This whole country needs to be aware of the importance of the mouth of the river and how it has to be dredged to 50 feet every day all day.” PAUL AUCOIN, Executive Director, Port of South Louisiana 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

FOCUS: TRANSPORT

LEE CELANO

identified any that need to be relocated to a greater depth.” Fortunately, early indications are that there are few obstructions. The Corps estimates that maintaining and operating the deeper channel will cost about $21.6 million a year and that the net annual benefit to the U.S. economy will be $96.8 million. In a recent study, the federal agency said the project would result in a national economic benefit-to-cost ratio of about 5.47 to 1. The deepening project could take as long as four years to complete and produce about 18 million cubic yards of sediment, some of which will be used to create wetlands.

“It’s the channel that gets your product to the rest of the world.” BILL RASE, Executive Director, Port of Lake Charles, on the Calcasieu Ship Channel

THE CALCASIEU SHIP CHANNEL In southwest Louisiana, it’s both channel width and depth that are giving the Port of Lake Charles headaches. Located about 35 miles inland from the Gulf, the port is the 11th busiest in the U.S. and about to get busier. Sixteen of the current announced LNG and industrial projects would be users of the channel; that represents more than $68 billion in capital expenditures. Port of Lake Charles Executive Director Bill Rase fears dredging issues in the Calcasieu Ship Channel will severely restrict his port’s ability to support the growth. Speaking at the Louisiana Oil & Gas Association’s annual meeting in Lake Charles in March, Rase said a big part of the problem is a lack of available dredge disposal areas.

COURTESY PORT OF LAKE CHARLES

ate $11.5 billion in U.S. production, 17,000 new jobs and $849 million in income.” Unlike other ports in Louisiana, the Port of New Orleans operates its own dredge to maintain consistent river depths near its facilities. Made necessary by sedimentation buildup in the shipping births, the dredging maintains a depth of 45 feet so that ships have a “clean” approach. “The flexibility in water depth is extremely important,” Christian adds. “As you know, ships are getting larger. The river stage is extremely important for business as well as attracting larger ships.” While it’s not likely New Orleans, or any Louisiana port, will be able to support the larger New Panamax ships—those are destined for west and east coast ports—New Orleans can receive vessels as large as 9,000 TEUs (a standard maritime industry measurement meaning “Twenty-Foot Equivalent Units”). “That’s the other big piece of this—when you get up into the 8,000 or 9,000 TEU range, you want more flexibility in depth. That enables them to more efficiently load their ship with containers, which obviously is better for their economics,” Christian explains. Even after funding is received, the Corps’ will need to perform some preliminary work. “We’ve got to make sure there are no pipelines or other obstructions in the way, because there’s thousands of utility pipelines under the river,” Lucore says. “We have to make sure we’ve

MAJOR DELIVERY: Happy Sky—a heavy load carrying vessel—offloads project modules for the Sasol ethane cracker at the Port of Lake Charles.

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“The channel needs 97 million cubic yards of disposal capacity for dredged material,” Rase said. However, a 2010 Corps study identified only 5 million cubic yards of available disposal capacity. “Existing disposal sites must be re-built and new sites added to provide the needed capacity,” he said. “In order for them to pick up the silt and mud that’s in the channel they have to have a place to put it. That is something that the state is required to do, and as sponsors for the state we have to make sure that we have areas that are acceptable.” Rase estimates the cost to keep the ship channel open in a deep draft capacity will be $79 million over the next 20 years, adding that a reliable source of funding for the channel must be found. If not, the Calcasieu Ship Channel would not remain a deep draft waterway, resulting in a loss of current and future economic benefits. He compares the channel to a pipeline. “It’s the channel that gets your product to the rest of the world. The channel’s a very important part of the picture, not only for the local economy, but the state, the nation and the world. “Today, we’re bringing in 40-foot draft ships and have to get right through the middle of the channel to achieve that,” he adds. “It gets very tight, and we try to prevent that situation, but it does happen.” Rase credits the skill of the pilots for successfully navigating ships in such tight conditions.

OTHER IMPROVEMENTS Apart from the need for dredging, there’s plenty of infrastructure development going on at the state’s deep draft ports. One of Christian’s most immediate tasks at the Port of New Orleans will be the continued development of the port’s master plan, Port NOLA 2025, which seeks to identify those projects necessary to meet port needs in the next decade, as determined by market forecasts and demand analysis. Of recent significance is a $25 million investment in an intermodal rail center at the Napoleon Container Terminal, completed in 2016. “We now offer the capability to move things not only by barge, but by truck and expanded rail,” she says. The port redistributed existing dock facilities to make way for new rail tracks and two new rubber-tired gantry cranes. Additionally, an 18-inch-thick layer of concrete was placed to boost container storage capacity. The port also installed a refrigerated container racking system. “We’re able to stack the containers so it’s a more efficient use of space and keeps the container contents cold in a consistent way. It has really made a difference in terms of our ability to provide quality service.” Two of the port’s terminal operators—New Orleans Terminal LLC and Ports America—recently invested in an automated gate system. Using integrated software, the system has resulted in a 25% increase in gate transactions 1012industryreport.com

2nd Qtr

MICHAEL C. HEBERT

AD WILL RUN AS IS

RAIL IMPROVEMENTS: The Port of New Orleans intermodal yard project was completed in February 2016 as part of a $23.3 million update at the Napoleon and Louisiana Avenue Terminals.

through systematized appointment scheduling. At the Port of South Louisiana, Aucoin says about $57 million in investment is currently underway, some of which is related to the doubling in size of one of the port’s primary warehouses. Another big project on the horizon is a standalone container port.

“We can put containers on grain barges instead of a train or a truck,” he says. “We’ve got 40,000 grain barges going back empty anyway, so they could easily take those containers up to Memphis, St. Louis and Chicago.” The port received a 50%-funded federal grant to conduct a market study to determine the project’s viability.

QUALITY WORK & COMMITMENT TO SAFETY The Pipe & Steel Way

PORT CAMERON UPDATE SUPPORTERS OF THE planned $1.5 billion Port Cameron LLC deepwater oil and gas industry-support complex hope it will one day facilitate new industrial development along the Calcasieu Ship Channel through a new “shared facilities” concept. Port Cameron is centrally located to serve offshore installations in the Gulf and will initially be situated on 500 acres, with another 750 acres available for future expansion. The project also includes about 25,000 linear feet of all-weather roads and two new concrete bridges. Director of Operations Ted Falgout, who joined the port in 2015 after serving at Port Fourchon for 31 years, says Phase 1 of the project should begin within weeks of receiving the U.S. Army Corps of Engineers’ permit. Evans-Graves Engineers in Baton Rouge is the project’s designer. “We anticipate moving into construction within three months or so after the permit is issued,” Falgout says. He expects that to happen in 2017. Port Cameron has partnered with Peterson, a Netherlands-based company proficient in the shared facilities concept, to support planning, development and marketing at the port. A relatively new concept in the Gulf, shared services is expected to generate significant operational savings for port 1012industryreport.com

tenants. “Tenants are sharing a dock, space and facilities, thereby not having to pay for it all themselves,” Falgout says. “You’re splitting the overhead of those things. Sharing is the new buzz word—everybody’s talking about it because they want to cut costs.” While there are currently no longterm lease commitments, Falgout says there is significant interest. “At 33 feet deep, the slips will be considerably deeper than anything that’s available in the energy services industry. This will open opportunities to companies that have been unable to operate or have to go somewhere else to accommodate the drafts for their equipment.” Situated centrally in the Gulf, Port Cameron’s location provides a strategic advantage. “One of our greatest assets is being adjacent to the Calcasieu Ship Channel, which opens the opportunity for many kinds of things that occur in the Gulf,” Falgout says. “We’re only 180 miles from Houston, the epicenter of the oil and gas industry, and only 16 miles from the Intracoastal Waterways.” Port Cameron will be an intermodal facility, “offering an opportunity that over time will cause a paradigm shift in how cargo is moved. It will save fuel and have all the great environmental benefits.”

Double the quality NOT Double the price PIPEANDSTEELINDUSTRIAL.COM 225-665-0407 • Denham Springs 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

INSIGHT Low-cost hydrocarbons continue to benefit Gulf Coast

DAVID DISMUKES

ecent announcements by ExxonMobil and Wanhua Chemical Group prove that the Gulf Coast region, and Louisiana in particular, continues to be an attractive location for energy manufacturing and export facility investment. Louisiana and Texas are the prime beneficiaries of this development with completed and announced projects split on an almost equal basis. Louisiana accounts for over 56% ($154 billion) of the completed and announced energy manufacturing and export development on the Gulf Coast. Louisiana’s investments, however, are weighted more heavily toward several multibillion-dollar liquefied natural gas (LNG) export projects. LNG investments account for $145 billion of the completed and announced projects along the Gulf, and $98 billion (or 68%) of those investments are located in Louisiana. Energy manufacturing investments are more diversified across a variety of sectors that include ethane crackers, methanol facilities, ammonia and “other” energy manufacturing activities. Louisiana is competitive with Texas in securing a number

of these completed and announced investments. To date, Louisiana has seen over $50 billion in completed energy manufacturing investments. Most of this development has been in the expansion of ethane cracking capabilities, followed by methanol production, ammonia production, and other activities and investments. Completed and announced ethane crackers represent over $30 billion in new capital investment opportunities for Louisiana. These facilities “crack” ethane, a natural gas liquid (NGL), in addition to other types and blends of NGLs, into a variety of commodity chemicals that primarily serve as the building block for modern plas-

projects that should come online by 2020. This level of combined development ($8.5 billion) compares well with that completed and announced in Texas at $7.3 billion. Ammonia ranks third in Louisiana energy manufacturing investment. Ammonia is formulated from natural gas and is a key component in fertilizer manufacturing. Louisiana has already seen $5.6 billion in ammonia manufacturing development with an additional $2.8 billion announced for development that will likely be online by 2020. This level of ammonia development is considerably higher than what has been seen in Texas, which

“Louisiana is competitive with Texas in securing a number of these completed and announced investments. To date, Louisiana has seen over $50 billion in completed energy manufacturing investments.” tics and other chemicals. Louisiana has already recorded over $10 billion in completed ethane cracker projects with another $15 billion announced to be developed by 2020. Methanol facilities rank second in total Louisiana completed and announced energy manufacturing investments. Methanol is an increasingly important commodity chemical given its flexibility (to convert natural gas and ship to other places in the world) and to use as a building block for many construction-related materials that are in high demand in rapidly growing Asian and developing economies. To date, Louisiana has seen over $2.5 billion in completed projects with another $6 billion in announced

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accounts for $3.8 billion (35%) in total Gulf development and announcements. Lastly, there are a wide range of “other” miscellaneous yet important energy-related manufacturing investments that are being leveraged by the low-cost shale revolution. These investments total over $19.2 billion along the Gulf, some 43% of which ($8.2 billion) have been developed or are slated to be developed in Louisiana. The continued announcements for energy manufacturing investments along the Gulf, and Louisiana, in particular, underscore a number of important truths. First, over the past several decades, Louisiana has been transformed from a net energy producing state to one that is a net

energy consumer. Louisiana produces some 2.85 trillion British Thermal Units of energy in any given year, relative to 4.25 trillion BTU of energy consumption. This energy consumption is not limited to the creation of steam, heat and power, like it is for many industries around the U.S., but includes a copious amount of energy used for feedstock purposes: hence the rapid development of energy manufacturing announcements in our region and in our state. Second, Louisiana has been a prime beneficiary of these recently announced energy manufacturing investment developments and announcements, but we are not the only game in town. Capital is highly mobile in the energy business, as witnessed during the decade of the 2000s when Louisiana saw chemical industry employment losses of over 10,000 jobs to places like the Middle East, Asia and Western Europe. In addition, natural gas and NGLs are ubiquitous in the U.S. and can often be moved just as easily to the upper Midwest and the mid-Atlantic regions of the country as they can to the Gulf. Today, our competition is not relegated to some far-flung region of the globe, but instead, is located much closer to home in places like West Virginia, Pennsylvania and Ohio. Something to consider when weighing important policy questions, and potentially considerable changes, with taxes and incentives. David Dismukes is a professor and the executive director of the Center for Energy Studies at Louisiana State University. He holds a joint academic appointment in the department of environmental sciences, where he regularly teaches a course on energy and the environment. 1012industryreport.com

The road to a growing and safe Capital Region: BUILD IT!

CONNIE FABRÉ

t was a hot day in July 1976, when the airplane touched down for my first introduction to Baton Rouge. My family was moving here from Brussels, Belgium, where my Dad had completed a two-year assignment with Esso Chemicals. As the airplane door opened, my parents, my two brothers and I descended the steps to the tarmac. The humidity enveloped us in a sticky blanket. We walked to the open-air baggage claim area and waited in the heat. “Welcome to Baton Rouge!” After living in Brussels, Hong Kong, and Mountainside, New Jersey, I wondered what kind of place my parents had brought us to. Before arriving, we had heard some stories about our new home, and from what was said, I, being 12 years old, envisioned a place where people got around in boats and lived in houses on stilts, with alligators lurking at every turn. I honestly was not sure that there would be real, solid roads to drive on, but I assured myself that there must be roads. Indeed, as we left the airport that hot day, there were roads, and I breathed a sigh of relief! Baton Rouge has an enchanting way of growing on a person, at least it did on me. My two brothers are now in San Francisco and Denver, and my parents spend half of the year in New Jersey. Yet for all the charm that I see in Baton Rouge, I also see opportunities where, with the proper attention, our commu-

1012industryreport.com

nity could offer a much-improved quality of life. Since 1976, the region has made progress on many fronts, and there are so many dedicated individuals to thank for these improvements. Our region continues to attract new employers and people from all over the world, and the population has almost doubled since 1976. So one might expect that road infrastructure would have doubled as well, and indeed there have been many projects to manage the growth; however, our region is at a critical “crossroads.” In order to continue growing and maintaining existing roads, some new large-scale projects are needed, such as a new

only during rush hour but also late into the night. Have you ever been at Siegen and Airline at 7:30 p.m.? Or the Horace Wilkinson Bridge, aka the “I-10 Bridge,” on a Saturday afternoon? These are times you might expect free flowing traffic; however, too often, there is not. Safety concerns also loom large for our region. From hurricanes and floods to traffic accidents and industrial safety concerns, the need to quickly evacuate and provide alternate routes for people is imperative. Recently, I left a plant located on La. 30 in Geismar around 3:30 p.m. and decided to try going toward Baton Rouge using La. 30 instead of I-10. The entire way was practically

“Consider our current situation, where Baton Rouge drivers pay $1,204 per year on safety and additional vehicle operating costs, according to the Washington, D.C.-based transportation think tank TRIP. A better use of this money surely would be to invest in the infrastructure that can relieve these costs.” Mississippi River bridge and connectors to it. Presently, the existing bridges, two in Baton Rouge and one in Donaldsonville, are at maximum capacity. Several recent articles in local papers have outlined the facts that we are spending too much time in traffic and paying too much for extra gas and vehicle maintenance, as compared to other cities our size. These costs could be avoided if the infrastructure supported the needs. From families getting kids to school, to a craftsperson getting to the plant, or a health care professional getting to the hospital, we are all affected. Roads are congested not

in gridlock. Every artery from south of La. 30 was blocked, with all of us just inching along. What if an ambulance needed to respond to a resident? And just recently the Intracoastal Waterway Bridge on La. 1 was deemed unsafe for heavier loads, which wreaked havoc on the supply chain of industry and on emergency responders, some of whose vehicles were not allowed to cross by State Police on guard. DOTD has about 1,000 bridges closed across the state. A community that feels unsafe cannot foster a sustainable future. Two years ago, GBRIA joined forces with the Baton Rouge Area

Chamber and the Center for Planning Excellence to form the Capital Region Industry for Sustainable Infrastructure Solutions (CRISIS) group, which is a regional coalition. CRISIS has facilitated communication between the Capital Region Planning Commission, the Louisiana Department of Transportation and Development, regional parish governments, the Capital Area Legislative Delegation and other state legislators, and the recent Governor’s Taskforce on Transportation and Infrastructure to get everyone on the same page, pulling in the same direction. The chance to invest in infrastructure that will provide the necessary safety and facilitate future economic growth is at hand now. A reliable commute time to work, knowing the options to evacuate, and confidence that necessary infrastructure is planned when a new business comes to town, are all attainable. A new statewide coalition called “BUILD IT” is leading the call for change. Consider our current situation, where Baton Rouge drivers pay $1,204 per year on safety and additional vehicle operating costs, according to the Washington, D.C.based transportation think tank TRIP. A better use of this money surely would be to invest in the infrastructure that can relieve these costs. Recent articles have outlined that the state needs at least $700 million to build new and maintain existing infrastructure annually. This translates into about $158 per year for the average driver in Louisiana. We have the ability to move our money together for a greater common good versus what we’re doing today, just taking care of our own vehicles. By joining forces, over the long term we can lower the overall cost. It really makes sense, so let’s BUILD IT! Connie Fabré is the executive director of the Greater Baton Rouge Industry Alliance Inc.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

INSIGHT

Environmental considerations in project development

BOYD BRYAN JONES WALKER LLP

nvironmental considerations can determine the success or failure of a commercial or industrial project. They should be carefully evaluated at the earliest planning stages with a view toward the long-term success of the project. For new facilities, one of the earliest and most significant decisions can be the selection of the site for the project. Get this decision “right” and the chances of a successful project are greatly enhanced. Get it “wrong” and the result can be delays or even failure of the project. So what is involved in selecting the “right” site for a new facility? Clearly, the site must meet the criteria for commercially successful operations. These criteria can include proximity to customers, usable acreage, configuration of the site, available infrastructure (such as river, highway, rail or pipeline access, and utilities), and compliance with local zoning, land use and buffer zone ordinances. The site selection decision, however, should also be made with a view to minimizing potential adverse environmental impacts of facility operations. These considerations can include potential impacts on surrounding land uses (such as residential areas, schools or Native American lands) and environmental justice concerns. Minimization of such impacts may help avoid public opposition and litigation related to environmental permits, increase the likelihood that permits will be upheld if challenged, and avoid nuisance or similar claims after operations begin. Moreover, a balancing of the social and economic benefits and potential adverse environmental impacts of the facility may not only be advisable, it may be required in connection with the permitting of the facility under the public trust doctrine in the Louisiana Constitution. Environmental due diligence is also an important aspect of any project. A pre-purchase environmental site assessment can help identify potential

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contamination issues that should be addressed in negotiation of the price or other terms of the transaction, as well as risks of future contamination-related claims by neighboring landowners or other third parties. An appropriate environmental assessment can also qualify the purchaser for the “innocent landowner” or “bona fide prospective purchaser” statutory limitations to environmental liability for existing contamination. A wetlands delineation of the property, which is outside the scope of a typical environmental site assessment, is often advisable, as permits are required for development in wetlands. Also, if the transaction involves an operating facility, the purchaser should consider obtaining an environmental compliance audit to evaluate whether the facility has all the environmental permits that are required for its operations and whether there are outstanding enforcement actions or related liabilities. It should also be remembered that the developer and the regulatory agencies may not be the only persons that will review the environmental permits and related issues. Frequently, especially with respect to significant industrial projects, financing or outside investors will be required to make the project a reality. These lenders and investors will often

have their own attorneys and experts review the environmental permits and related approvals with a fresh set of eyes to be sure all requirements are met and no material gaps exist or “shortcuts” have been taken. It is best to keep this in mind and build a solid permit record that will withstand such scrutiny. Finally, lawyers and technical consultants are becoming more and more specialized and a team approach is often the best approach. Industrial projects commonly involve a team of environmental, real estate, public incentives, construction, tax and other attorneys and technical experts working closely together to make the project a success. To sum up, in any significant commercial or industrial project, it is best to plan early and adjust as needed as the project moves forward, assemble the right team to get the job done, and always think long-term. Boyd Bryan is a partner in the Baton Rouge office of Jones Walker LLP. His practice focuses on environmental law, including environmental issues in transactions such as due diligence and allocation and management of environmental liabilities; regulatory matters; defense of agency enforcement actions and environmental litigation. He is a past chairman of the Louisiana State Bar Association Section of Environmental Law and a frequent author and lecturer on environmental law issues.

1012industryreport.com

CLOSING NOTES EXECUTIVE MOVES

LAMBERT

DARBONE

GROUP CONTRACTORS GROUP Industries, a Baton Rouge-based industrial and commercial contractor, announced a promotion for one of its subsidiaries, GROUP Contractors LLC. Paul Lambert has been promoted to operations manager for GROUP Contractors. He is responsible for overseeing all aspects of the division’s construction activity, including both construction and estimating. He previously served as estimating manager. GROUP Industries, based in Baton Rouge, was founded in 1996 and has three subsidiary companies. GROUP Contractors and GROUP Deep Foundations primarily service industrial clients along the Gulf Coast. ARRIGHI Construction serves commercial clients throughout south Louisiana. FRANK’S INTERNATIONAL Frank’s International N.V. announced that Jeffrey Bird, Frank’s executive vice president and chief financial officer, was leaving the company effective March 1 for a position with another firm. The company’s board of supervisory directors named Kyle McClure, senior vice president of finance and treasurer, as interim chief financial officer. Frank’s commented that Bird’s departure was not related to any disagreement with the company or any matters relating to its operations, policies or practices. PORT OF LAKE CHARLES David Darbone of SOWELA Technical Community College has been appointed by Gov. John Bel Edwards to the Board of Commissioners of the Lake Charles Harbor & Terminal District, which operates the Port of Lake Charles. Darbone 1012industryreport.com

DIEZ

FAVRE

previously served on the board from 2005 to 2010 and was president from 2007 to 2008. Since 2008 Darbone has been the executive director of facilities planning and management at SOWELA, where he oversees the overall management of campus facilities as well as SOWELA’s budget for capital improvements and maintenance. LABI The Louisiana Association of Business and Industry hired John Diez Jr. to assume the role of director of PACs. Diez has an extensive background in candidate recruitment, political strategy and campaign management, coupled with experience in survey research and political analytics, LABI noted in a statement. In his new role, Diez will lead efforts to advance LABI’s long-standing mission of promoting the principles of the free enterprise system by building support for LABI’s four independent PACs: NORTHPAC, EASTPAC, SOUTHPAC and WESTPAC. Art Favre, president of Performance Contractors, will serve as the chair of LABI for 2017. He replaces John Finan, president and CEO of the Franciscan Missionaries of Our Lady Health System, who becomes the immediate past chair. Tim Stine, CEO of Stine Lumber Co., will serve as the board’s vice chair. Sonia Perez, president of AT&T Louisiana, and Terry Baugh, chief financial officer of D&J Construction Co., will serve as secretary and treasurer, respectively, rounding out the slate of 2017 LABI officers. MEPOL Mike Wolff, a longtime leader

PEREZ

WOLFF

in manufacturing in Louisiana, has been named as the next director of the Manufacturing Extension Partnership of Louisiana. Wolff held several roles during more than 25 years working for TJ International and Weyerhaeuser in Natchitoches, including plant manager, general manager, and government and community relations manager at engineered lumber manufacturing facilities. In addition, he has served on the boards of several organizations, including terms as chairman of the Manufacturing Council of the Louisiana Forestry Association, the Central Louisiana Manufacturing Managers Council, the Natchitoches Economic Development Commission and the Louisiana Association of Business and Industry. PORT OF NEW ORLEANS Gov. John Bel Edwards appointed Darryl D. Berger to the Board of Commissioners of the Port of New Orleans. Berger will serve a five-year term, succeeding Scott Cooper, one of four Orleans Parish representatives on the seven-member regional board. Berger is president of The Berger Company Inc., which he founded in 1972 and is based in New Orleans. An investor, developer and financier of real estate, Berger is particularly active in downtown New Orleans development. LOUISIANA ECONOMIC DEVELOPMENT Louisiana Economic Development Secretary Don Pierson announced Paul Helton will serve as executive director of FastStart. A founding member of the FastStart management team, Helton has served as director of the program since early

HELTON

2009 and became interim executive director in late 2016 when former executive director Jeff Lynn took a new position in Alabama. A U.S. Navy veteran, Helton became training coordinator for Georgia’s Quick Start program in 2002, managing and administering all aspects of training for 62 client projects through 2007. Prior to joining LED FastStart in 2009, Helton served as director of economic development for North Metro Technical College (now Chattahoochee Technical College) near Atlanta. STONE ENERGY David H. Welch has stepped down as CEO and president of Stone Energy and informed the board of directors of his intention to retire following more than 13 years of service to the company. Welch also indicated his intention to step down from his position as a director. James M. Trimble, currently an independent director of the company, has been elected interim CEO and president by the board, effective April 28. The board also appointed Keith Seilhan, formerly Stone’s senior vice president – Gulf of Mexico, to the new post of chief operating officer, effective immediately. Trimble brings more than 35 years of energy industry experience to his new position. He was president and CEO of PDC Energy from 2011 to 2015. Earlier, he founded and/or led several private oil and gas companies. You can submit items for Executive Moves by emailing a press release and a high-resolution headshot to editor@1012industryreport.com. Executive Moves is limited to senior management and board positions only.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

CLOSING NOTES: COMPANY NEWS

CB&I SELLS OFF CAPITAL SERVICES DIVISION CB&I is selling the Capital Services division of its company to a New York-based private equity firm, Veritas Capital. The deal will have implications for some 1,500 CB&I employees in the Baton Rouge area who work in the Capital Services division. But Veritas Capital officials say the changes will be positive for the local market, where they hope to grow their new company. “Baton Rouge will remain a vital area of operations for the company, and we are committed to growing our presence there,” says Ramzi Musallam, CEO and managing partner of Veritas Capital. “We expect that the business will increase jobs locally and provide economic development throughout the state.” CB&I’s Capital Services division handles mainte-

market and their product suite. This, combined with their proven excellence in assembly, fabrication and service solutions, aligns with our low-cost strategy.” Venture Global is developing both the 10-MTPA Venture Global Calcasieu Pass facility on an approximately 1,000-acre site located at the intersection of the Calcasieu Ship Channel and the Gulf, and the 20-MTPA Venture Global Plaquemines LNG facility in Plaquemines Parish.

COURTESY BASF

BASF DONATION CREATES UNIQUE LSU LAB LSU officials joined BASF executives in the public unveiling of the BASF Sustainable Living Laboratory on campus in April. The Lab, which is the first of its kind at LSU and in the Southeast, is an innovative space that promotes problembased teaching and research focused on sustainable solutions to meet global challenges. A part of BASF’s workforce development and science education efforts in the region, the Lab is the result of a $1 million donation BASF made to the LSU Foundation and the College of Engineering, first announced in 2014. “BASF has had an ongoing relationship with LSU, and the investment in the BASF Sustainable Living Lab is a natural fit for us,” said Tom Yura, senior vice president and general manager of BASF’s site in Geismar. “The Lab promotes innovative research to achieve sustainable solutions, enhances science education for students of all levels and helps foster workforce development opportunities in the Gulf Coast—all of which are at the core of BASF’s mission to create chemistry for a sustainable future.” BASF’s support of LSU also includes a $100,000 donation to complete the new LSU Career Center, more than $20,000 in annual scholarships to College of Engineering students, and annual summer internship opportunities.

STUDYING SUSTAINABILITY: Kevin McPeak, associate professor at LSU, is the first researcher in residence selected for the BASF Sustainable Living Lab.

nance and environmental work, and the bulk of the company’s Capital Services employees are based in Baton Rouge. Veritas officials suggest the company could grow its footprint in the environmental services area in particular, noting that the region’s focus on water management and control is well-aligned with the company’s capabilities.

speeds the ticket-to-invoice process tremendously,” said Jonathan Currie, Qv21 Technologies CEO. “Once a company has trained its drivers and field personnel to use our respective platforms to input data in the field, dispatch and accounting have much better data to close the loop and invoice sooner with a much lower error rate.”

CLEARGISTIX PARTNERS WITH QV21 Cleargistix continues to expand its reach in the market by signing a partnership with Qv21, a provider of dispatch and logistics software for the oilfield services industry. Based in Madisonville with a satellite office in Lafayette, Cleargistix connects the field to the office, providing a cloudbased and more efficient digital means for companies still utilizing paper and spreadsheets to capture and manage revenue, activity, safety, compliance, payroll and other information in the field. Cleargistix currently focuses on three industry verticals: oilfield services, tug and tow, and construction. “Qv21’s dispatch and e-ticketing platform for transporters and Cleargistix’ digital data collection and job management services for field service providers provide vital real-time data that

VENTURE GLOBAL LNG CHOOSES TECHNOLOGY PARTNER Venture Global LNG has selected GE Oil & Gas as a strategic partner to provide a plantwide technology solution for its LNG export facilities under development in Louisiana. According to the agreement, GE Oil & Gas will leverage advanced technologies from across the broader GE portfolio to deliver a comprehensive power, pretreatment and LNG liquefaction system. The agreement provides for the delivery of a complete LNG process system with defined schedule, price and performance standards. Mike Sabel and Bob Pender, Venture Global co-CEOs, jointly announced in a statement, “This transaction is an LNG industry precedent-setting event. It will materially reduce project costs and risks and accelerate dramatically construction schedules. GE Oil & Gas is committed to this

—Daily Report

62 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

CHESAPEAKE UPS CAPEX, TARGETS HAYNESVILLE ACTIVITY Chesapeake Energy Corp. announced details of its 2017 guidance outlook, specifying total capital expenditures guidance of $1.9 billion to $2.5 billion, projected total company production ranging from a decline of 3% to growth of 2%, and projected exit rate oil production growth of 10%, while exit rate gas production is projected to remain relatively flat. The capital expenditures projection compares to approximately $1.65 billion to $1.75 billion in 2016. Chesapeake plans to operate an average of approximately 17 drilling rigs, compared to 10 rigs in 2016. “In our natural gas plays, our progress in the Haynesville Shale in Louisiana continues to improve with recent wells placed on production reaching approximately 30-45 million cubic feet of gas per day,” said CEO Doug Lawler. “Our plans for 2017 in the Haynesville include utilizing three rigs and placing approximately 35 wells on production.” AIR PRODUCTS WINS MARATHON CONTRACT Air Products has been awarded the long-term supply of approximately 30 million standard cubic feet per day of hydrogen by Marathon Petroleum for its Garyville refinery. This new supply award, to begin in November 2017, is in addition to volumes of hydrogen Air Products already provides Marathon at Garyville. The additional hydrogen will come from Air Products’ existing Gulf Coast Pipeline, the world’s largest hydrogen plant and pipeline network system. Air Products officially dedicated the GCP in 2012. The 600-mile pipeline stretches from the Houston Ship Channel in Texas to New Orleans, supplying 1012industryreport.com

COURTESY AIR PRODUCTS

AIR SUPPLY: Air Products’ Convent facility delivers hydrogen via its extensive pipeline in the Gulf Coast area.

MAGNOLIA SIGNS A BUYER Magnolia LNG, a unit of Australia’s Liquefied Natural Gas Ltd., signed a heads of agreement with Vessel Gasification Solutions Inc. in relation to the Magnolia LNG project in Lake Charles for the provision of up to 4 MTPA of LNG. The nonbinding agreement provides for a 20-year free on board sale and purchase agreement. VGS is developing a floating LNG import and regasification terminal at the Kakinada Deepwater Port in Andhra Pradesh, India. SWAT ACQUIRED BY HASTINGS Hastings Equity Partners, a private equity firm focused on investing in lower, middle-market energy services and equipment companies, announced its seventh Fund III platform investment in Specialty Welding and Turnarounds LLC (SWAT). Based in Gonzales, SWAT is a leading provider of specialty welding and other turnaround services to refinery, petrochemical and industrial customers. The investment in SWAT marks Hastings’ first investment for Hastings Equity Fund III in the downstream services sector. This market will be a key area of focus for Hastings moving forward, the firm said. 1012industryreport.com

Chapter 11 bankruptcy case. The Advertiser reported the Clerk of Court’s Office at the Houston location of the federal Southern District of Texas confirmed that Judge Marvin Isgur signed the motion. Stone Energy, an oil and gas exploration and production company, filed for bankruptcy protection on Dec. 14 and expected to emerge from it by the third quarter of this year. The company carried more than $1 billion in debt when it filed for bankruptcy, but sold its Northeastern holdings in the Marcellus and Utica shales in February, and has closed its Northeastern office.

UP COMMITS $79M TO PORT NOLA LOOKS TO LA. TRACK UPGRADES ST. LOUIS CONNECTIONS Union Pacific is boosting safety The Board of Commissioners and efficiency with an approximately of the Port of New Orleans and $79 million infrastructure investthe St. Louis Regional Freightway ment in Louisiana this year. The entered into a memorandum of unplan funds a range of initiatives, derstanding to exchange market and including $58 million to maintain operational information. The goal is railroad track and $18 million to to grow trade and build upon existmaintain bridges. Key projects ing and new business relationships planned this year include: between the two regions and critical • $19 million investment in the ports. The agreement also calls rail line between Alexandria and for joint marketing efforts to meet Shreveport to replace 149,125 railthose objectives. The MOU is the STONE ENDS BANKRUPTCY CASE road ties and install 76,150 tons of culmination of discussions begun A federal bankruptcy judge on rock ballast. during a September 2016 visit to St. April 20 granted Lafayette-based • $11 million investment in the Louis by top officials for the Port of Stone Energy’s motion to end its rail line between Alexandria and New Orleans. At that time, it Iowa, Louisiana, to replace HANDS ON: An Apache employee volunteers at a planting of trees became evident that it would 90,659 railroad ties and be mutually beneficial to foster the company donated. install 35,093 tons of rock even greater collaboration ballast. and leverage the intermodal This year’s planned connectivity between the $79 million capital expendiport and the St. Louis region. ture in Louisiana is part of an “[The] agreement solidifies our ongoing investment strategy. efforts to work with our inland From 2012 to 2016, Union neighbors to develop new Pacific invested more than opportunities and optimize $392 million strengthening our connectivity,” said Brandy Louisiana’s transportation Christian, president and CEO infrastructure. of the Port of New Orleans. FOUNDING FAMILY APACHE NAMED REDUCES STAKE IN FRANK’S ‘CONSERVATIONIST The founding family that OF THE YEAR’ controls Frank’s International Apache Corp. has been is reducing its ownership selected to receive the 2016 stake. The company, which Governor’s Award - Conseroperates out of Houston, was vationist of the Year for its founded by Frank Mosing Apache Tree Grant Program, in 1938 in Louisiana and which has donated 4 million went public in 2013. But the trees since 2005—including Mosing family retained about 2 million trees to Louisiana85% of the company after it based charities and agencies. began trading on Wall Street. COURTESY APACHE CORP.

customers with over 1.4 billion feet of hydrogen per day from more than 22 hydrogen production facilities. Hydrogen is widely used in petroleum refining processes to remove impurities found in crude oil such as sulphur, olefins and aromatics to meet product fuels specifications.

The Governor’s Award is presented annually to the person, business or organization deemed to have made the most outstanding contribution to the protection, wise use and enjoyment of Louisiana’s natural resources among nominees submitted by the public. The 53rd Annual Governor’s State Conservation Achievement Awards program is hosted by the Louisiana Wildlife Federation, and the awards are presented jointly with the National Wildlife Federation. In 2016, Apache’s Tree Grant Program donated trees to the Terrebonne Parish Tree Board, the city of New Orleans’ NOLA Tree Project, the Baton Rouge Recreation and Park Commission, and the University of Louisiana at Lafayette. Apache also donated 250,000 native bottomland hardwood seedlings to continue habitat restoration efforts for Louisiana black bears in Louisiana and Texas. Because of multiyear tree donations from Apache, the Black Bear Conservation Coalition’s Landowner Assistance Program has restored nearly 5,000 acres of hardwood habitat for wildlife habitat.

10/12 INDUSTRY REPORT • SECOND QUARTER 2017

The company revealed in April that Mosing family members sold 5.6 million shares to Morgan Stanley, reducing their controlling ownership down to about 75%. Morgan Stanley intends to sell much of the stock to third parties.

US LNG TO MEXICO A unit of Mexico’s state-owned petroleum company, Petroleos Mexicanos (Pemex), started importing LNG from Cheniere Energy’s Sabine Pass export terminal in Louisiana to Mexico’s Altamira import terminal on the Gulf of Mexico in April. To date, the Creole Spirit LNG tanker, with a capacity to hold about 3.6 billion cubic feet of gas, and the Magellan Spirit, with a capacity of around 3.3 bcf, have delivered cargoes from Sabine to Altamira on April 4 and April 14, respectively.

facility provided by co‐lead arrangers Sumitomo Mitsui Banking Corp. and ING Capital LLC to complete construction of the current phase of contracted tanks at Pin Oak’s site in Mt. Airy, Louisiana. Combined with the $100 million equity investment that was announced in December 2016 led by Dauphine Midstream LLC and Mercuria Energy Group Ltd., Pin Oak has secured capital for its development of an independent logistics hub to service customers in Louisiana and across the Gulf Coast. “Closing on this debt facility further confirms the market’s belief that Pin Oak will be a premier storage and logistics facility,” said Mike Reed, CEO of Pin Oak. “Since our announcement of the equity financing in late 2016, we have seen strong interest from customers.” Pin Oak is projected to be operational by summer 2017.

PIN OAK COMPLETES FINANCING ARRANGEMENTS 2nd Qtr #1 Pin Oak Terminals LLC AD WILL RUN AS IS announced it has closed on a debt

TRANSCO TO BUILD NEW YUHUANG SUPPLY LINE Transcontinental Gas Pipe Line Co. (Transco), a Williams company, has filed an application with the

—FuelFix.com

—Reuters

COURTESY SWLAEDA

CLOSING NOTES: COMPANY NEWS

ON THE MOVE: Brittany Duplechian, SWLA Alliance Foundation director, and George Swift, SWLA Economic Development Alliance president & CEO, accept a $5,000 donation from Stevie Trahan, center, external relations manager for Cameron LNG.

U.S. Federal Energy Regulatory Commission seeking authorization to construct and operate the St. James Supply Project in St. James Parish. The project will enable Transco to provide 161,500 dekatherms per day of firm transportation capacity from Transco’s existing facility in St. Helena Parish, south-

Providing

COMMUNICATIONS SAFETY & INFORMATION TECHNOLOGY

SOLUTIONS FOR OVER

50 YEARS

ward along Transco’s Southeast Louisiana Lateral to a new interconnection delivering natural gas to its customer, YCI St. James Enterprises LLC, at the Yuhuang Chemical Plant, a methanol manufacturing plant under construction in St. James Parish.

—Gas Compression Magazine

Petrochemical

Police

Construction

EMS

Manufacturing

Fire

Government

Healthcare

Transportation

Education

Communication & Safety GO HAND IN HAND! emcotechnologies.com

•

225.925.8900

8900 S. Choctaw, Baton Rouge, LA

64 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©2012 Motorola Solutions, Inc. All rights reserved.

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focused on the oilfield equipment and service sector, announced the recapitalization and combination of Performance Wellhead & Frac Components Inc. and Slingshot Supply Inc. Performance and Slingshot have combined to provide a larger asset base and broader geographic reach to support their customers across the oilfield, the company said in a statement. Since the two companies have minimal geographic overlap, they will both continue to operate under their legacy names in their respective markets. Performance, based in Houston, provides surface well-control equipment and related field services utilized in all phases of drilling, well-stimulation, production and intervention operations. It has locations in Kilgore, Odessa and Pleasanton, Texas; Broussard, Louisiana; and elsewhere.

TOP DOGS ISC Constructors associates Ren PELICAN ENERGY Babin and Chase Groger, above, MERGES SUPPLIERS 2nd Qtr #1 competed in the Associated Builders Pelican Energy Partners, a and Contractors Instrumentation AD WILL RUN AS IS Houston-based private equity firm National Craft Competition. Babin,

COURTESY ISC

CAMERON LNG DONATION SUPPORTS ALLIANCE FOUNDATION WORK The Southwest Louisiana Alliance Foundation received a $5,000 check from Cameron LNG to support its initiatives. The donation is the 2017 installment from Cameron to the foundation’s “SWLA on the Move” five-year campaign. The current plan of work under the SWLA on the Move campaign is to address the critical issues facing the region: workforce development, business recruitment, business retention and expansion, regional marketing, and building a single voice for a true regional partnership. The Chamber SWLA and the SWLA Alliance Foundation are part of the Southwest Louisiana Economic Development Alliance. SWLA on the Move promotes economic development in Allen, Beauregard, Calcasieu, Cameron and Jeff Davis parishes.

left, was presented with a Safety Award and Bronze Medal, and Groger won a Silver Medal. ISC also received an Eagle award and a Pyramid award in the ABC EIC competition. (See page 12 for the full list of Louisiana EIC winners.) GBRIA HONORS SAFETY EXCELLENCE The Greater Baton Rouge Industry Alliance Inc. announced the winners of its 2017 Contractor Safety Excellence Awards at a banquet held March 30 at the

L’Auberge Casino & Hotel Baton Rouge. The winning contract companies each year are nominated by GBRIA members and have demonstrated a level of safety excellence that includes thousands and millions of hours worked without injury, a commitment by management to educate workers, and a zero-incident culture that is fostered daily. This year’s first-place winners: General Construction & Maintenance: Division I, RES Contractors; Division II, Specialty Welding and Turnarounds LLC (SWAT); Division III, Turner Industries Heavy Construction: Division II, Barriere Construction Co. LLC Specialty Trade (Soft Craft): Division I, Deltak Environmental Coating Services Inc.; Division II, Petrin Corp.; Division III, Apache Industrial Services Specialty Trade (Hard Craft): Division I, Westgate LLC; Division II, MMR Constructors Inc. Technical Support: Division I, Austin Fire Systems; Division II, SGS Petroleum Service Corp.

MID-SOUTH OTI EDUCATION CENTER

Bringing expanded opportunities for safety and health workers and employers As recognized leaders in safety and education, the Mid-South OSHA Training Institute Education Center (OTIEC) is pleased to offer in demand OSHA courses close to industry and close to home. Serving Region VI - which includes the ﬁve-state area of Louisiana, Texas, Arkansas, Oklahoma and New Mexico - we deliver occupational safety and health training to public and private sector workers, supervisors, and employers on behalf of OSHA.

ON-SITE SERVICES ARE AVAILABLE! The Mid-South OTI Education Center can bring our classes anywhere in the U.S., upon speciﬁc request.

For more information, visit MIDSOUTHOTI.ORG or call 877-345-2515

MID-SOUTH OTI EDUCATION CENTER IS A CONSORTIUM BETWEEN

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10/12 INDUSTRY REPORT • SECOND QUARTER 2017

CLAIBORNE

CLOSING NOTES: PROJECT MAPS BOSSIER

Project by project

WEBSTER

CADDO

($25M-$250M)

BIENVILLE

Louisiana industrial projects announced or proposed since Jan.1, 2014, with projected capital investment of $25 million-$250 million. Second line shows projected capital investment and direct new jobs. List is representative, not complete; project statuses change frequently. 1 First Bauxite $200M | 100 jobs Location: St. John the Baptist Parish Status: announced June 2015 2 Diamond Green Diesel $190M | N/A Location: St. Charles Parish Status: engineering underway; major equipment ordered

11 Advanced Refining Technologies $135M | 325 jobs Location: Calcasieu Parish Status: completion of expansion projected for 2018 12 Matheson Gas $130M | 40 jobs Location: Calcasieu Parish Status: under construction

3 Entergy $187M | N/A Location: Cameron, Calcasieu parishes Status: in permitting

13 Praxair $100M+ | N/A Location: Ascension Parish Status: completion expected second half of 2018

4 Indorama Ventures $175M | 125 jobs Location: Calcasieu Parish Status: commercial startup projected before end of 2017

14 Cleco/Cabot Corp. $80M | 20 jobs Location: St. Mary Parish Status: broke ground October 2016

5 Tennessee Gas Pipeline Co. 15 Florida Fuel Connection, LLC (Kinder Morgan) $75M | 50 jobs $170M | N/A Location: East Feliciana Parish Location: northeast Louisiana Status: completion projected to southwest Louisiana for Q1 2017 Status: construction began 16 Southwest Louisiana March 2017; expect completion Bioenergy February 2018 $69.3M | 41 jobs 6 NOLA Oil Terminal Location: Allen Parish $162M | 54 jobs Status: under construction Location: Plaquemines Parish 17 Momentive Specialty Status: under construction Chemicals, Inc. 7 Kinder Morgan La. Pipeline expansion $151M | 0 jobs Location: southwest Louisiana Status: permitting 8 Occidental Chemical $145M | 12 jobs Location: Ascension Parish Status: construction May 2016-late 2017

$66M | 68 jobs Location: St. Charles Parish and Ascension Parish Status: expected to begin construction in 2016

21 Epic Piping $45.3M | 566 jobs Location: Livingston Parish Status: complete 22 Boise Cascade $43M | 400 jobs Location: Sabine Parish Status: completion projected for 2017

NATCHITOCHES SABINE

23 Graphic Packaging International $41.5M | 1,340 jobs Location: Ouachita Parish Status: under construction 24 Balchem and Taminco $40M | 110 jobs Location: Iberville Parish Status: expected to begin construction in 2015

VERNON

25 PCS Nitrogen $40M | 0 jobs Location: Ascension Parish Status: permitting

BEAUREGARD

26 Bayou Cos. $39M | 15-20 jobs Location: Iberia Parish Status: complete 27 TCI Plastics $36.5M | 280 jobs Direct jobs: 280 Location: Orleans Parish Status: under construction

9 Regency Energy Services $144M | 6 jobs Location: Webster Parish Status: under construction 10 Bunge North America $140M | N/A Location: St.Charles Parish Status: under construction

20 Virdia $60M | 81 jobs Location: Lafourche Parish Status: under construction

28 SB International $32.5M | 134 jobs Location: Bossier Parish Status: under construction, completion projected for 2017

18 Hunting Energy Services 29 Huntsman/Rubicon $62M | 123 jobs 400K mt production expansion Location: Terrebonne Parish for MDI Status: announced March 2015 Location: Ascension Parish 19 Stepan Company Status: On hold awaiting $60M | 33 jobs construction Location: Ascension Parish Status: hiring to begin as early as 2017

66 10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2017

RED RIVER

DESOTO

CALCASIEU

12 3 CAMERON

BLUE = NEW PROJECT

1012industryreport.com

UNION

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

RICHLAND

MADISON

JACKSON

FRANKLIN

CALDWELL

TENSAS WINN

CATAHOULA LASALLE GRANT

CONCORDIA

RAPIDES

AVOYELLES WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

15 EVANGELINE ALLEN

POINTE COUPEE

TANGIPAHOA

ST. LANDRY WEST BATON ROUGE

ACADIA

ST. TAMMANY LIVINGSTON

8 13 19 29

ION NS

LAFAYETTE

IBERVILLE

ST. MARTIN

CE AS

JEFFERSON DAVIS

EAST BATON ROUGE

ST. JOHN THE BAPTIST

1 ST. JAMES

17 2 ST. CHARLES

IBERIA ASSUMPTION

26 VERMILION

ORLEANS

27 JEFFERSON ST. BERNARD

ST. MARTIN ST. MARY

20 18

IBERIA

LAFOURCHE

PLAQUEMINES

TERREBONNE

Sources: LED, La. Economic Outlook, 10/12 research

1012industryreport.com

10/12 INDUSTRY REPORT â&#x20AC;¢ SECOND QUARTER 2017

CLAIBORNE

CLOSING NOTES: PROJECT MAPS BOSSIER

Project by project

CADDO

WEBSTER

($250M and up)

BIENVILLE

Louisiana industrial projects announced or proposed since 2009 with projected capital investment of $250 million or more. Second line shows projected capital investment and direct new jobs. List is representative, not complete; project statuses change frequently. (LNG = liquefied natural gas export project) 1 Sasol Ltd. $21.2B-$24.2B | 1,253 jobs

19 CF Industries Nitrogen, LLC $2.1B | 93 jobs

38 Energy World USA $800M | N/A

2 Sabine Pass LNG (Cheniere Energy) $20B | 400 jobs

20 Live Oak LNG (Parallax Energy) $2B | 100 jobs

39 Petroplex $800M | N/A

21 Yuhuang Chemical, Inc. $1.85B | 400 jobs

40 Shell Chemical $717M | 20 jobs

22 G2X Energy $1.6B | 243 jobs

41 Valero Refining – New Orleans, LLC $700M | 24 jobs

3 Driftwood LNG $13B-$16B | 400 jobs 4 G2 LNG $11B | 250 jobs 5 Sempra Energy/Cameron LNG $10B | 190 jobs 6 Formosa (St. James Parish) $9.4B | 1,200 jobs 7 Lake Charles LNG (aka Trunkline LNG; Shell and Energy Transfer Partners) $9B | 250 jobs 8 Southern California Telephone & Energy (Monkey Island LNG) $9B | 200 jobs

23 EuroChem $1.5B | 200 jobs 24 Shintech $1.4B | 100 jobs 25 South Louisiana Methanol $1.3B | 63 jobs 26 BioNitrogen Louisiana Holdings, LLC $1.25B | 250 jobs

NATCHITOCHES SABINE

42 Bayou Bridge Pipeline $670M | N/A 43 Louisiana LNG Energy, LLC $646.6M | 44 jobs VERNON

44 Pin Oak Terminals $600M | 70 jobs 45 Southern Cross Transmission Project $600M | N/A

27 AM Agrigen Industries $1.2B | 150 jobs

46 Methanex Corp., Methanex 1 $570M | 35 jobs

9 Venture Global LNG (Plaquemines) $8.5B | 250 jobs

28 Wanhua Chemical Group (location TBD) $1.12B | 170 jobs

47 Methanex Corp., Methanex 2 $570M | 120 jobs

10 Delfin LNG $7B | 400 jobs

29 Castleton Commodities International $1.2B | 50 jobs

11 Magnolia LNG $4.35B | 50 jobs 12 Venture Global LNG (Calcasieu Pass) $4.25B | 100 jobs 13 Lake Charles Methanol, LLC $3.8B | 200 jobs

30 Dow Chemical $1.06B | 71 jobs 31 Cornerstone Chemical Co./ Dyno Nobel $1.025B | 65 jobs

BEAUREGARD

48 Honeywell International $500M | 80 jobs 49 Shintech Louisiana, LLC $500M | 5 jobs 50 BASF (Geismar) $500M | 100 jobs

CALCASIEU

51 Sundrop Fuels $450M | 150 jobs

32 Monsanto $1B | 100 jobs

52 Westlake Chemical (Geismar) $425M | 70 jobs

33 Monsanto $975M | 95 jobs

53 Shintech Louisiana, LLC $420M | 88 jobs

34 Benteler AG $975M | 675 jobs

54 Hazelwood Energy Hub $400M | 123 jobs

35 Entergy (Westlake) $872M | 30 jobs

55 Williams Olefins $400M | 5 jobs

17 Revolution Aluminum $2.4B | 1,450 jobs

36 Entergy (St. Charles) $865M | 27 jobs

56 NuStar Energy $365M | 32 jobs

18 Marathon Petroleum $2.35B | 65 jobs

37 Lake Charles Cogeneration, LLC $820M | 210 jobs

57 Syngas Energy $360M | 86 jobs

14 Nucor Steel Up to $3.4B | 1,250 jobs 15 Axiall/Lotte Chemical $3B | 250 jobs 16 Lake Charles Clean Energy (Leucadia Corp.) $2.5B | 215 jobs

68 10/12 INDUSTRY REPORT • SECOND QUARTER 2017

RED RIVER

DESOTO

64 1 35 7 15 16 59 11 22 37 13 20 3

5 CAMERON

4 2

12 10

8 23

RED = PROJECT KILLED BLUE = NEW PROJECT

1012industryreport.com

UNION

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

58 ExxonMobil Corp. (Chemical) $336M | 30 jobs