10/12 Industry Report [Q4 2019] by Baton Rouge Business Report

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PLUS: The deepwater race Focus on construction + design LABI: Building Main Street

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 3

CONTENTS

FAST and FURIOUS PAGE 28

Meet seven Louisiana industrial firms that are among the quickest-growing in the nation.

Publisher: Rolfe McCollister, Jr. EDITORIAL Editorial Director: Penny Font Editor: Sam Barnes Contributing Writer: Erin Z. Bass Contributing Photographers: Terri Fensel, Cheryl Gerber, Don Kadair ADVERTISING Account Executives: Judith LaDousa, Angie LaPorte Advertising Coordinator: Brittany Nieto CORPORATE MEDIA Editor: Lisa Tramontana Content Strategist: Allyson Guay CUSTOM PUBLISHING Sales Director: Erin Palmintier-Pou MARKETING Chief Marketing Officer: Elizabeth McCollister Hebert Marketing & Events Assistant: Taylor Floyd Events: Abby Hamilton Community Liaison: Jeanne McCollister McNeil PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Vu Graphic Designers: Gracie Fletcher, Melinda Gonzalez, Emily Witt ADMINISTRATION Digital Manager: James Hume Business Associate: Kirsten Milano Business Associate: Tiffany Durocher Office coordinator: Tara Lane Receptionist: Cathy Brown AUDIENCE DEVELOPMENT Audience Development Director: Katelyn Oglesby Audience Development Coordinator: Ivana Oubre

CONTENTS

FOCUS

30 Estimating from scratch

Editor’s Take

Contractors must make best guess as they deal with incomplete designs.

LAUNCH

8 11

ICYMI Industry briefs

32 OSHA alert Contractors must now evaluate and document crane operator readiness.

Executive profile Meet Adam Beary, President and CEO of Bear Process Safety.

INSIGHT

NEWS

51 Guest columnists weigh in on

22 Going deep The race for deepwater oil ports in the Gulf of Mexico is on—and Louisiana is already years ahead.

26 Surviving rock bottom

energy markets and high-tech industry.

SPECIAL ADVERTISING SECTIONS

35 Louisiana Association of Business & Industry: Building Main Street

51 Company Spotlights CLOSING NOTES

56 Company news 58 The boom at a glance Our maps of the projects driving the industrial boom.

70 My toughest challenge Kyle J. Remond of RED Group in New Orleans

Houma service companies are adapting to a new offshore reality.

Send your ideas and company news to editor@1012industryreport.com. 4 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

A PUBLICATION OF LOUISIANA BUSINESS INC. Chairman: Rolfe H. McCollister, Jr. President and CEO: Julio A. Melara Executive Assistant: Sandra Macdonald 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 4 - Number 4

© Copyright 2019 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.

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 5

IN THIS ISSUE

From an offshore oil bust, stories of resilience emerge

SAM BARNES

THE NEXT GREAT RACE It’s a brave new world in the Gulf of Mexico. The Louisiana Offshore Oil Port loaded a record six VLCC (Very Large Crude Carrier) supertankers in a matter of weeks last summer—averaging 283,333 barrels a day in June alone—for the transport of medium-sour crudes to China, India and Europe. Made possible by the lifting of the oil export ban and a marked increase in demand, LOOP’s success has

6 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

LOWS AND HIGHS: Despite economic conditions in Houma, Gulf Island Fabrication Inc.’s shipbuilding unit has a backlog of work into 2021.

caught the attention of a host of mostly Texas-based companies looking to cash in on the next great offshore race [see “Going deep,” page 22]. At least five separate deepwater oil ports off the coast of Texas are proposed, each hoping to tap into burgeoning worldwide demand for exports and a growing supply of inland oil. It appears, however, that those facilities first to cross the regulatory finish line will stand the best chance of getting built, as future demand won’t likely support them all. Originally constructed as an import facility, the decades-old LOOP is way out in front, since it needed only a few adjustments to add export capabilities to its portfolio. CALCULATING COST IS NO EASY TASK From the outset, an unrealistic cost estimate can set the stage for significant cost overruns in the world of mega petrochemical projects. This, unfortunately, is the rule not the exception in today’s “build before you design” world. When an owner attempts to circumvent a project’s natural progression, unrealistic cost expectations are the usual result [see “Estimating from scratch,” page 30]. Time constraints are the most common culprit, as management commits to an overly optimistic start-

up and production window or they’re pressured into making decisions in an attempt to capture value and/or market share. That’s a lesson some have learned the hard way. In September, Sasol delayed its annual financial results for a second time to allow for a deeper investigation into what went wrong during construction of its $13 billion Lake Charles project. CONTRACTORS BE WARNED A recently adopted OSHA rule has introduced several changes that specify a process certifying and evaluating the country’s 117,000-plus crane operators [see “OSHA alert,” page 32]. Unfortunately, many contractors remain largely unaware of the changes. That’s not good, as we’re long past the April 15 deadline for compliance. According to OSHA’s 2018 Cranes and Derricks in Construction Standard at 29 CFR 1926 Subpart CC, employers must now evaluate their operators specific to the crane type they will be operating, even after the operators have been trained and certified by an accredited testing body. Perhaps equally important, contractors must maintain documentation of the evaluations on-site for as long as the respective operator is employed. Contractors be warned: OSHA field agents are actively looking for potential violators.

1012industryreport.com

DON KADAIR

he steep drop in oil prices in 2014 sent the Houma economy into a worrying tailspin and brought about the loss of some 17,500 jobs in the years that followed. Consequently, the hammer fell on a number of oil- and gas-specific companies, forcing layoffs in large chunks at Edison Chouest, Chett Morrison, Hercules Offshore and Offshore Specialty Fabricators, among others. National Oilwell Varco in Houma and CCHI Aviation in Galliano closed their facilities altogether. As Baton Rouge economist Loren Scott points out, the employment decline was three times worse than what the nation experienced during the Great Recession of 2008-09. The outmigration of jobs seems to have bottomed out, leaving stories of hope and perseverance in its wake. The weathered communities of Houma and Thibodaux are showing signs of a rebound due to the ability of their energy businesses to adapt and diversify and meet the demands of a new paradigm [see “Surviving rock bottom,” page 26]. This relentless drive to succeed is also apparent in the seven industry-specific companies that qualified for Inc. magazine’s annual guide to the 5,000 fastest-growing privately held companies in the U.S. [see “Fast and furious,” page 13]. It’s a lofty honor, as those in the list were ranked according to their percentage of revenue growth from 2015 to 2018.

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 7

LAUNCH ICYMI

The Austin Chalk revisited Barrrell, president of Amelia Resources LLC in New Orleans. Barrell generates drilling prospects in the onshore U.S., then leverages its data and experience to attract capital partners. He believes that ConocoPhillips’ hydraulic fracturing process was likely too shallow and that adjustments can be made to make it more successful. “The high oil saturation is in the basal (lower) portion of the Austin Chalk and above that is a lot of water,” he says. “There were a lot of natural fractures, so the fracking forced a connection with the water-bearing section, making it hard to produce the oil.” Barrell thinks the other major driller in the play’s eastern leg, EOG Resources Inc. of Houston, could tweak the design of the frack and get a better result. ISTOCK

Orleans. Austin Chalk essentially follows the same path as the TMS south and east across the lower half of the state, although at a shallower depth. “The Tuscaloosa Marine Shale, particularly north of Baton Rouge, isn’t all roses either,” Smith says. “The shale is fairly soft and it

CHANNEL TRAFFIC If you think traffic on Interstate 12 is growing exponentially, consider the Calcasieu Ship Channel. A study commissioned by the Port of Lake Charles projects significant growth over the next decade, thanks to expanded operations of existing terminals and the construction of new ones. Expand just how much? Deep-draft ship traffic is forecasted to more than double by 2025, growing from 1,098 to over 2,342 vessels. The fifteenyear horizon of the study projects 2,607 deep-draft vessels annually in 2033. Here’s the good news: The channel—with its existing infrastructure and operations—does have the capacity to handle the increase.

coalesces around the proppants. If the cracks don’t stay open, then you can’t get the oil or the gas out of the shale.” While ConocoPhillips’ dismal results were disappointing, they by no means signal the death knell of the play’s eastern leg, says Kirk

2,039

New Facilities

2,000

2,121

2,183

2,184

1,914

Existing Facilities 1,668

1,500 1,322

1,000

1,022

1,108

1,153

1,189

500

8 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

Read the full story at 1012industryreport.com/energy/ the-austin-chalk-revisited

2,500

Number of Vessel Calls per Year

THE INITIAL optimism that fracking technology would breathe new life into Louisiana’s Austin Chalk shale play has waned a bit in the last year. The first entrant into the play, ConocoPhillips, reported some rather dubious results in July from its exploratory wells in East Feliciana Parish. The first three of ConocoPhillips’ wells produced more than 90% water and nowhere near enough oil to justify big investments, so the drilling of a planned fourth well was discontinued. While there was speculation that the oil company might probe the overlaying Tuscaloosa Marine Shale (TMS) in the same area, it eventually abandoned the idea and put its 234,000 acres up for sale in September. That’s probably because TMS is an even riskier proposition, says Eric Smith, interim director of the Tulane Energy Institute in New

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

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Issue Date: Q4 Ad proof #3

• Please respond by e-mail or fax with your approval or minor revisions. • AD WILL RUN AS IS unless approval or final revisions are received by the close of business today. • Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

things you need to know about the next nominee for Energy Secretary

Energy Secretary Rick Perry plans to step down by year’s end. At press time, Donald Trump had named Louisiana native DAN BROUILLETTE as his intended nominee to succeed Perry, pending confirmation in the Senate. Here are five things you should know about the man who could be driving the nation’s energy policy.

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2. In the private sector, he was

most recently the senior vice president and head of public policy for USAA, which provides financial services to the military community, and a vice president of Ford Motor Company, where he led the automaker’s domestic policy teams and served on its North American Operating Committee.

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3. He has deep ties to Louisiana and its energy sector. He was chief

of staff to the U.S. House of Representatives Committee on Energy and Commerce under former Republican U.S. Rep. Billy Tauzin, and also served as a member of Louisiana’s State Mineral and Energy Board. He’s no newcomer to the U.S. Department of Energy: He was an assistant secretary for congressional and intergovernmental affairs under President George W. Bush.

4. He was involved in crafting provisions of the Energy Policy Act of 2005—specifically for the Department of Energy loan guarantee program and federal authorization of import/export of LNG.

5. After being nominated deputy secretary of energy in 2017, Brouillette was confirmed by the 79-17 vote in the Senate.

SOURCE: U.S. Department of Energy

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LAUNCH: PEOPLE DON KADAIR

Executive Profile:

Adam Beary

s one of the youngest CEOs in Baton Rouge, Adam Beary is proving himself in both the engineering and business worlds. He’s not a typical engineer or CEO though. “I paint, I’m big into art, I like music,” he says. Process engineering may not sound like a creative industry, but Beary incorporates avenues for being creative wherever he can. Bear Process Safety is in the early stages of getting into augmented reality and virtual reality, and Beary also focuses a good amount of time on marketing and branding for his company. He’s creative in how he runs his business as well, giving employees unlimited vacation as a way to maintain work/ life balance. Although Bear Process Safety hit the one-year mark as a company in April of 2018, Beary says the biggest challenge is still being the “new kid on the block. We are doing something that’s been done the same way for 50 years in a different way.” Where did your career start?

Like most South Louisiana folks, I grew up in an industry family. My dad, grandad and brothers all worked in chemical plants. From the time I could work, I was doing things in the summer at the plant. When I first got out of college, I got a job at a process engineering firm here in town. Part of the work I did was one of the tasks we do called Process Hazard Analysis, so I was involved in the process safety realm. I liked the work and because the company was fairly small, I started having a lot of client interaction. The company was going in an engineering direction and new owners were taking over, so I decided to start my own company. What is your favorite aspect of what you do as CEO?

Managing people. I’ve learned that I really do like providing for our employees, providing a culture that’s fun and challenging, and showing them how to be successful and be proud of their work. 1012industryreport.com

What is one thing about your job people don’t expect or don’t know and hear about?

I actually spend a lot of time with our staff on content development for social media and branding and marketing. A lot of people don’t really think about that in terms of firms that do what we do. We branded ourself around the bear. I think it’s been vital to our success. At least once a week, we have a meeting about either content development or new branding ideas. What do you see for the future of your industry?

The industry is hard to predict. I think as our industry becomes a little more stable within the chemical and petrochemical industry, there will be a boom to technology. A lot of our plants are investing in 360 video and virtual reality. I think there’s a real opportunity within the safety industry for those who buy into new technology and how it can help us. We can train a big group of people easier and quicker than we could before and they retain more and we’re safer because of it. What is a great piece of advice you have personally received? Did you have occasion to put it to use?

I worked for a professor at LSU who now owns his own business: Dr. Ron Malone. He’s still a mentor of mine and played a big part in making me believe that I could do something. He told me sometimes you can either work to live or you can live to work. He has spent his career being very successful but working to live. It’s a reminder that your family’s still important, your community’s still important, your life is still important. I’ve tried to keep that in mind as a leader and try to remember what the work is for and to enjoy the ride along the way. What is an item on your “bucket list”?

I am a huge traveler. My wife and I have a map on the wall with pins of

POSITION

President/CEO Bear Process Safety AGE

28 HOMETOWN

French Settlement

places we’ve been and places we want to go, and we have what we affectionately call the adventures wall of pictures and art from the places we’ve been. My bucket list would be to put a pin in every continent. What are your next goals both professionally and personally?

Professionally, for Bear Process Safety to be the largest safety process company in Louisiana. To have multiple branches and clients throughout the Gulf Coast region. Service is undersold in the region, and we think there’s a market for specialized consultancy. What I really want to do personally is advance Baton Rouge. We are trying to feel out where we fit as a young, growing company. We have no plans to move, so we want to be invested in what Baton Rouge is doing. I want to become somebody who can benefit the community.

EDUCATION

LSU, bachelor’s of science in Chemical Engineering If you could have any job other than your own, what would it be?

Some sort of sports analyst. I wanted to be a broadcaster as a kid. If I could be on ESPN talking about sports all day, that would be a dream job of mine. What do you do to unwind?

I like to paint. My grandfather is an artist. He paints duck decoys and he’s done paintings throughout his whole life so when I was a kid he fostered that ability. As I got older and when I started my job in engineering, I picked it up again. It’s super therapeutic and relaxing. A proud personal moment was when my wife let me hang up some paintings at the house.

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 11

MECHANICAL SERVICES • CIVIL CONSTRUCTION ELECTRICAL & INSTRUMENTATION Our mission at RES Contractors, LLC is to continually provide value-added construction services to our customers by creating a successful partnership with them throughout the construction process.

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(985) 252-3400 www.res-usa.com 12 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

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COVER STORY

FAST andFURIOUS Meet seven Louisiana industrial firms that are among the quickest-growing in the nation.

uccess can come in varLouisiana that earned a spot on the Andre Fontova founded Blast Tech ious forms, but most of list. Of those, seven provide services to fill a need for dependable blasting Louisiana’s fastest growprimarily to the industrial market. and coating services in the oil and gas ing private companies Here are their stories, by order of market. share a common strength rank. It seemed like a good idea at the born out of adversity. A couple of time, given that oil prices were well them opened their doors right before over $100 a barrel. “Oilfield work BLAST TECH the oil market went bust, then had to was our primary focus and right out Broussard pivot quickly into different markets. of the gate we had to cut that down Growth rate: 857% Others began their business as a “side from 90 to 40 percent,” says ChaOverall rank: No. 509 gig” and navigated their way to suctham, vice president of operations. 2018 revenue: $10.3 million cess against the odds, while another Nothing could have prepared the In 2014, Brandon Chatham and sketched out plans on a kitchen table team for the challenges that would and sunk every available dime into the company. Regardless of their inauspicious beginnings, those industrial-specific service companies qualifying for the 2019 Inc. 5000 ranking earned a combined revenue of more than $100 million last year, with some rather remarkable year-over-year growth. Case in point: the list’s highest-ranking Louisiana-based industrial service company, Blast Tech of Broussard, grew its revenue by a whopping 857% in just three years. The business magazine ranked the companies according to their percentage of revenue growth from 2015 to 2018. There were some 37 companies from Andre Fontova and Brandon Chatham of Blast Tech in Broussard

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bring, as the oil industry quickly went from feast to famine. Blast Tech brainstormed for ways to reduce inefficiencies and overhead, and looked for new opportunities. They diversified into new markets, opened an indoor facility in Broussard —the largest of its kind in south Louisiana—began a site services division and began working ship hulls, salt mines and pipelines. “We had to diversify quickly, and that’s what we did,” says Fontova, vice president of commercialization. They weren’t alone, as everyone in the area found themselves in the same boat. “The whole community pivoted together,” Fontova says. “We all said, ‘Let’s make adjustments and execute.’ I think that’s something that the people of Acadiana do better than anywhere else.” Despite the initial setback, Blast Tech of Broussard has grown to 75 employees. No doubt Chatham’s background played a huge role in the company’s success. After graduating from University of Louisiana at Lafayette with a bachelor’s degree in land and resource management, TERRI FENSEL

BY SAM BARNES

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 13

COVER STORY he brought his “get things done” mentality to multiple companies, including PetroQuest Energy, Green Field Energy Services, Chem Rock Technologies and Rapid Drilling. Chatham has an innate ability to create efficient processes and procedures, and uses the latest technology and software to get it done. The proprietary software crafted for Blast Tech’s indoor facility helps communicate schedules in real time to customers. “We can communicate down to the minute about when we blasted it, who blasted it, how long it took, etcetera—all through iPads,” he says. This real time communication service is one of the ways Blast Tech differentiates itself. It recognizes that time is money in the industrial sector, and that literally millions of dollars could be lost when equipment is down. Blast Tech forecasts 20% growth year over year, much of that made possible by a 10,000-square-foot addition to its indoor facility in Broussard, to be completed by mid-2020. The company’s current footprint stretches across the Gulf Coast.

state. 10/12 Industry Report sat down with Sampson to ask about his future plans.

SRP ENVIRONMENTAL Shreveport

Growth rate: 206% Overall rank: No. 1948 2018 revenue: $14.4 million

A native of Nova Scotia, SRP Environmental CEO Keith Sampson launched his Shreveport company in 1996, not long after graduating with degrees in toxicology and environmental planning from the University of Wisconsin and LSU. The company quickly tapped into the burgeoning environmental market and has since grown into 18 offices across 13 states. At each location, SRP provides a broad array of services to clients across all industry sectors, including environmental compliance, assessment and remediation, industrial hygiene consulting, safety management services and comprehensive environmental, health and safety training solutions. Locally, the company has offices in Baton Rouge and New Orleans, and projects scattered across the

STE A M

When you founded SRP, did you have a clear vision of your goals for the company? I had a vision and it started to gain traction. I planned to get my degree and start something on the side for extra income. It just kind of grew from there. Within three or four years it went from being operated out of my house, to me having an office, to having an office in another state, to making acquisitions. It just kept growing. What makes you stand out in a rather crowded field of competitors? One of the biggest things that separates us is that we don’t just do environmental or just industrial hygiene or just safety. We do all of them. Our client base is very diversified, so we want to be diversified. We’re vertically integrated and offer a single source for many services. Most clients don’t want to have to go to three or four different vendors.

Science, Technology, Engineering and Math (STEM) are important. But what takes STEM to the next level? STEAM! With a 100 year history in Louisiana, Shell embraces the culture of music as well as visual and performing arts throughout the state.

Shell believes creativity is the spark that will help

Today, Shell steps boldly into the world of “what could be” by celebrating the value of the Arts in every area of life. Our partnership with the New Orleans Jazz & Heritage Festival is just the beginning. We’re looking forward to seeing just how much STEAM we can add to STEM in Louisiana.

make our future bright for generations to come.

Louisiana is where we live and we’re proud to call it home.

The “A” in STEAM is for ARTS!

#MakeTheFuture 14 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

www.shell.us/louisiana 1012industryreport.com

SRP Environmental CEO Keith Sampson

HENRIETTA WILDSMITH

Are there any challenges to managing such a large geographic footprint? At times, we’ve organically created a presence in another location and hired someone local or promoted from within the company. In many cases, we’ve acquired an existing business in the area. It’s definitely a challenge to try to keep everyone on the same page, but we’ve incentivized the offices by having them share in the profits they generate from their operations. We have a strong team that understands the client’s and SRP’s goals, and delivers our vision. Having good people around you is crucial to success. How do you envision the future? There are currently three more acquisitions that we’re evaluating. Our business plan is to expand our national footprint in the U.S. and perhaps internationally. Right now, we do work internationally, but on an as-needed basis. There are a lot of areas where we could expand. For example, there are engineering companies out there that are good acquisition targets. When you acquire them, you’re also acquiring 1012industryreport.com

MID

their expertise, cash flow, client base, reputation and quality employees.

MODERN AMERICAN RECYCLING SERVICES Gibson

Growth Rate: 165% Overall rank: 1948 2018 revenue: $67.8 million

No matter how bad it gets in the topsy-turvy world of oil and gas, one thing is certain: The decommissioning of abandoned offshore rigs will continue, per federal mandate. Recognizing the opportunity some 15 years ago, Modern American Recycling Services offered up its Gibson recycling yard and today is the largest barge dismantler and offshore decommissioning provider in the U.S. The 49-year-old company, founded by “Butch” Dwight Caton, decommissions rigs and dismantles retired barges, vessels, bridges and buildings, then recycles and sells the resulting scrap metal and concrete. The company recently leveraged its success by expanding into Mobile, Alabama, and cut the ribbon

DOWN SHREVEPORT

NEW ORLEANS

BATON ROUGE

AT BRADLEY FIRM

WE DO IT ALL WWW.BRADLEYFIRM.COM

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 15

COURTESY MODERN AMERICAN RECYCLING

COVER STORY

Modern American Recycling

on its first international facility in Denmark—a 200-person facility that will decommission platforms and ships of various sizes from the North Sea. The Mobile and

Denmark facilities have deeper-draft ports capable of handling larger platforms. “The largest fixed platform that we’ve recycled to date is 4,000 tons

16 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

and they’re only going to get bigger as they come in from the deeper water,” says Vice President Kristi Caton. MARS has already been awarded a large 7,000-ton platform that will arrive at its Mobile facility in 2020, and in Denmark some of the platforms could reach 50,000 tons. As for MARS’ Gibson location, the peak season for the decommissioning process is April through October. “We receive the platforms on a material barge, then perform an assessment of any hydrocarbons or possible contaminants,” Caton says. “Once they’re clean and prepped we start taking down the sections into manageable pieces.” A 25-person crew uses cutting torches to cut the pieces into smaller sections for recycling. Up to 130 platforms are decommissioned at the facility in a given year. “Our methodology enables the dismantling in a timely fashion that’s not costly for the client,” Caton says.

HOSS INDUSTRIAL LLC Sulphur

Growth rate: 134% Overall rank: No. 2807 2018 revenue: $2.6 million

Hoss Industrial LLC in Sulphur takes a slow, measured approach to growing its business—one that stresses quality over quantity. The majority woman-owned company has grown steadily since its founding, and its portfolio has expanded to include hydroblasting, tank cleaning, boiler washing, wet/ dry vacuuming and other industrial cleaning services across Louisiana and Texas. 10/12 Industry Report asked the company’s team of owners and partners about their secrets to success. Tell us about Hoss Industrial’s origins and how that has molded your work ethic. Co-Owner Jason Kleven: In the beginning, we had to police ourselves and turn down work because

1012industryreport.com

COURTESY HOSS INDUSTRIAL LLC

Hoss Industrial LLC

we just didn’t have the cash flow. Today, it’s more about what our people can handle. What can we do well with what we have? How fast can we grow our people, and can we afford it? We, as owners, are also more involved in the day-to-day operations of our business than others might be. We’re heavily involved in the field, making sure things get done to our expectations. We probably have just as many billable hours on our big days as our hourly people. Start to finish, we own it. From the time the customer calls us until we’re done, wrapped up and cleaned up, we own it. Partner/Manager Christina Gauthreaux: Jason and Desi (Gauthreaux) started this basically at a kitchen counter, and here we are today with significant growth, and projected growth. Just the fact that they started it out of their own pockets is impressive to me. Kleven: We’re young enough so that if we lose everything it will be OK. We’ll just start over and go do something else. It really wasn’t that much that we were risking. In the grand scheme of things, it wasn’t that much. What differentiates you from others that do what you do? Kleven: The knowledge we possess about our customers’ systems is probably the biggest thing that we offer. Because of that, we’re able to 1012industryreport.com

help them control their costs. We’ve been invited to enter into national contracts and have secured single source agreements. Partner/Manager Desi Gauthreaux: We’re all about team building. In some businesses, you might have four or five people with good skillsets, but they can’t work together. Our employees train together and they work together. It’s a real team effort. Training is a continuous process, and it’s more coaching than training. How are your future goals shaping up? Partner/Manager Erica LeJeune: I think the plan is to scale the business model and reproduce it as efficiently and at the highest level of customer satisfaction. We have a ton of work right here in our back yard. Long-term, we’ve got to figure out how to bottle that somehow and reproduce it in other areas. But right now, there’s so much here locally to keep our attention. Kleven: Our customers are going to drive that. But there are times we have to turn work down. Last year, one client invited us to negotiate work for 36 mills across the nation and in Canada, and we literally had to turn it down. We don’t have any investors, so financially we couldn’t sustain that type of growth that quickly. 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 17

are received by the close of business today. • Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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COVER STORY

Quality Engineering & Surveying President Derek Murphy (center)

QUALITY ENGINEERING & SURVEYING Port Vincent

Growth rate: 131% Overall rank: No. 2869 2018 revenue: $5.7 million

President Derek Murphy founded Quality Engineering & Surveying in 2008, working designs at night after wrapping up his day job. It wasn’t long before an increasing volume of work turned his design work into a full-time endeavor. Jamie Seal, vice president of operations/project manager, joined the company to help Murphy with infrastructure and drainage improvements projects. “We got some pretty significant jobs throughout the state that led the way for us to get into more drainage infrastructure and municipal type projects,” Seal says. Today, QES’ licensed and support staff of engineers, surveyors, grant specialists, landscape architects and planners provide complete civil engineering design services from preliminary concepts to final construction for projects of all sizes and complexity. Crossing over into the industrial market brought some challenges, Seal says, as there aren’t many engineers who make that move. Nonetheless, QES is continuing to grow its work in the industrial space, offering surveying, civil site design, layouts, etc. To make it happen, as well as serve other markets, 1012industryreport.com

QES increased the size of its staff from 20 to 60 employees in just the last two years, and has plans to hire 10 more. Through it all, the firm strives to keep overhead down, and instead sinks money into employee benefits and improved pricing for customers. “Our growth has always been a natural process,” Seal says. “We keep our overhead down so that we can expand into new markets when needed.” There’s one way QES hasn’t skimped on cost—the design firm always makes sure it has the latest version of AutoCad. “That’s our ‘shovel’ … our main tool,” Seal says. “If we don’t have a good shovel, then we’re not going to remain competitive.” The firm has also invested in surveying drones and 3D scanners. When it comes to technology, QES is careful to blend the old with the new. “Three of our field crew guys have been surveying longer than I’ve been alive,” Seal says. “They know everything there is about surveying and they’re able to teach the younger people. I think that’s probably one of our biggest strengths.” There’s also a big emphasis on “work-life balance,” as QES encourages its employees to get involved in the local community and attend family functions. “We always stress priorities—if your child is having a play or some type of program at school, you need to be at your child’s school, not here at the office. That work-life balance is important to us.”

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COVER STORY

CHERYL GERBER

Abadie-Williams CEO Tyler Abadie

ABADIE-WILLIAMS Metairie

Growth rate: 87% Overall rank: No. 3825 2018 revenue: $2.5 million

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Abadie-Williams CEO Tyler Abadie founded his firm at a mere 26 years of age and touts his youth as an advantage. In fact, his firm actively pursues young professionals and pairs them with seasoned veterans. “Louisiana hadn’t had a young engineering and consulting group to come along in the last decade or so,” Abadie says, “and we fit a nice little niche in that market.” The strategy is paying off, as Abadie-Williams has doubled in size each year, growing from a tiny two-person office to 36 employees. The full-service midstream EPC firm provides the Gulf Coast with engineering, consulting, project management, and construction expertise to oil and gas companies throughout Louisiana, Texas and Mississippi. “Our clients range from multibillion-dollar corporations to small family-owned, private equity funds that invest in small developments,” Abadie says. Half of Abadie-Williams’ employees come from the owner-operator market, where they worked for refineries, petrochemical, and oil and gas companies. That enables the firm to offer a more holistic approach to client

problems. “There are very few groups that have that holistic understanding of an industrial facility from a capex and operational costs standpoint,” Abadie says. “We understand their systems, we understand the project life cycle, and we know the internal checks and balances they have.” In the last seven years, the firm has grown exponentially, losing very few employees in the process. Abadie credits the firm’s commitment to cross-training for the low turnover. “It has allowed us to keep our employees busy,” he says. “If there’s an area where there’s not enough civil engineering work, that individual is also trained in project management so he/she can fill in somewhere else. It also gives them an additional skill set that can open up more opportunities.” Looking ahead, Abadie-Williams plans to open two new offices—one on the north shore of Lake Pontchartrain and the other in The Woodlands, Texas.

RED GROUP New Orleans

Growth rate: 81% Overall rank: No. 3998 2018 revenue: $2.2 million

For the first few years of its existence, Remont Engineering & Design Group experienced only sluggish growth, and was even beginning to turn down work due to a lack of resources. That’s when owner 1012industryreport.com

Kyle Remont decided something needed to change. In 2011, he made several critical investment decisions and ramped up his office staff. It proved to be a wise move, as the control systems and electrical design firm’s growth accelerated quickly and has remained that way ever since. RED Group doesn’t simply offer a cookie-cutter approach for its clients’ problems, but develops dynamic solutions based upon specific needs. To find out more, 10/12 Industry Report sat down with Remont to discuss his business model. To what do you attribute your rapid growth? There was a lot of client demand, and we had to decide whether we would start turning down business or begin ramping up our staff. That was actually the first time we opened a brick and mortar office. At the same time, we opened a panel shop and hired more staff. From there, we really started to grow and fill that demand. Today, we actually assemble industrial control panels. This allows us to perform turnkey solutions—a big part of what was missing. Before, we would design these systems and program them, but someone else would have to build them. That always presented challenges with communication, testing and quality control.

Tell us more about your company’s unique niche. We’re probably a little more technology focused than others. I think “innovative” best describes us. We’re open to trying different strategies around all facets of the business. We’re also equally open to killing them off if they don’t mesh with our other goals or generate value for our customers. I think our team also separates us. They’re all self-starters and problem solvers. We’re very passionate about developing control systems and we bring that every day to our clients. One of the things we have focused on over the last few years is developing some of our own technology. As a result, we’ve developed a remote monitoring and control product called RED Alert. In 2016, we released the first version of it to select customers. Our new version 2.0 is in beta testing right now and will be released late this year. It comes 75% ready and we program the last 25% to customize it to exactly what the client needs.

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Proudest moment since founding the company? It would be seeing our team members grow over the years. For every one of them I can see the path they’ve taken, from where they started to where they are now.

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RED Group Owner Kyle Remont CHERYL GERBER

1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 21

ISTOCK

NEWS

STAYING AFLOAT: Deepwater ports fill a critical need, as VLCCs require a draft of about 85 feet of water when they are fully loaded.

PORTS

Going deep

BY SAM BARNES

The race for deepwater oil ports in the Gulf of Mexico is on—and Louisiana is already years ahead.

here’s a race afoot in the deep waters of the Gulf of Mexico. A host of companies and consortiums are pursuing the development of at least five separate deepwater oil ports off the coast of Texas, each hoping to tap into burgeoning worldwide demand for exports and a growing supply of inland oil. It appears, however, that those facilities first to cross the regulatory finish line will stand the best chance of getting built, as future demand won’t likely support them all. Regardless, it’s going to be a while before they catch up with the only current oil exporter in the U.S.

deepwater market—the Louisiana Offshore Oil Port, located some 30 miles south of Fourchon. Originally constructed as an import facility, the decades-old LOOP needed only a few adjustments to add export capabilities to its portfolio, and the investment appears to be paying off in a big way. LOOP loaded a record six Very Large Crude Carrier, or VLCC, supertankers in a matter of weeks last summer— 283,333 barrels per day in June alone—for the transport of medium-sour crudes to China, India and Europe. Tyler Abadie, CEO at engineering consulting firm Abadie-Williams LLC in Metairie, says LOOP is way

22 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

out in front of the export game—at least for the moment—as Texas investors must maneuver through a lengthy permitting process and a host of other challenges to turn their plans into reality. Abadie-Williams was tapped to design Sentinel Midstream’s $1 billion Texas GulfLink deep water export terminal 30 miles south of Freeport, Texas. “There are not a lot of precedents regarding how the permitting process works for these deepwater ports,” Abadie adds. “We’re also having to navigate through the engineering of a fixed structural platform in the Gulf of Mexico. Those just aren’t built anymore.” As such, Abadie-Williams ultimately had to re-

cruit a handful of engineers nearing retirement to assist with the design. “The expertise and the knowledge were hard to find, regarding design codes etc. It’s a massive undertaking.” Deepwater ports fill a critical need, as VLCCs require a draft of about 85 feet of water when they are fully loaded. Conversely, ports along the Mississippi River provide a draft of only 50 feet. “LOOP is in 115 feet of water, so it avoids all that,” says Eric Smith, associate director of the Tulane Energy Institute in New Orleans. “That means a vessel can come in empty and go out full, come in full and go out full, etc.” Andy Lipow, president of Lipow Oil Associates in Houston, 1012industryreport.com

eries in the New Orleans and Baton Rouge areas. It would also open up another route for exports. While Capline’s owners say crude oil service could commence by the third quarter of 2020, Tulane’s Smith expects a few bumps in the road. He says there will likely be delays from the environmental community as the pipeline crosses multiple state lines. “It’s going to be a bit of a fight before it’s over,” Smith says. “There’s also a short length of new pipe they have to install to connect to the pipelines coming out of Canada. “Still, I think there are some reasons for hope. I’m just saying I don’t expect that to happen tomorrow.” Even when it does happen, Smith doesn’t expect much of the heavy crude coming from Capline to make it to LOOP, given the level of local refinery demand and the offshore demand for “medium sour” crude. LOOP COULD SOON FEEL THE HEAT Until three years ago, LOOP supported about 300 vessels a year as they offloaded crude oil from Saudi Arabia, Iraq, Venezuela and other sources, then piped it inland.

COURTESY LIPOW OIL ASSOCIATES

says VLCCs are the most efficient method for transporting oil across the globe. A former oil executive, Lipow serves as a consultant for producers, refiners and midstream operators. “Asia is where a lot of the growth is coming from, but U.S. produced oil is making its way all across the world,” he adds. “It’s going to Europe, to India. We’ve seen some go to South America, so it’s just part of the overall world supply. “It just makes sense that the number of ships using these offshore ports is going to increase. Along with the pipelines, we’re building terminals, docks and associated infrastructure to move this oil into these overseas markets.” This trend toward increased offshore exports should continue as new sources of oil come online. Earlier this year, the owners of the Capline Pipeline—Plains Pipeline LP, BP Oil Pipeline Co. and Marathon Petroleum Corp.—announced plans to reverse their pipeline flow to transport crude oil from Patoka, Illinois, and Collierville, Tennessee, to the Gulf Coast, thereby providing a route for Canadian and North Dakota oil producers to reach refin-

“It just makes sense that the number of ships using these offshore ports is going to increase. Along with the pipelines, we’re building terminals, docks and associated infrastructure to move this oil into these overseas markets.” ANDY LIPOW, president, Lipow Oil Associates in Houston

HOUSTON-BASED West Delta LNG wants permission to build, own and operate a fixed-platform deepwater port in the Gulf of Mexico off the coast of Louisiana, as well as onshore facilities to export liquefied natural gas. According to the Federal Register, the deepwater port and marine components would include an LNG production and storage unit, a loading platform/ marine berth unit and support facilities. Onshore components would include the proposed Venice Pretreatment Plan in Plaquemines Parish in the existing Venice Gas Complex. On its website, West Delta says the project is designed as “a world-first fixed-platform LNG production facility with uncongested open-water access for LNG carriers, free of the coastal footprint that burdens shore-based facilities,” noting that it provides “opportunities for off-take partners to diversify upstream for even greater supply certainty and price protection.” Production facilities would comprise three LNG production platforms capable of accommodating six liquefaction trains with a combined capacity of 6.1 million metric tons of LNG. Aluminum storage tanks at the facility would be capable of holding 300,000 cubic meters of gas for off-loading to LNG carriers. The Venice Pretreatment Plan would receive natu-

1012industryreport.com

COURTESY WEST DELTA LNG

A NEW DEEPWATER PORT FOR LOUISIANA?

ral gas from Gulf of Mexico midstream pipelines and interstate pipeline feed gas from pipelines already interconnected with the Venice Gas Complex. The gas would be pre-treated and compressed onshore and sent to the offshore deepwater port. The proposed deepwater port will comprise 13 fixed bridge connected platforms with piles in Outer Continental Shelf West Delta Lease Block 44,

approximately 10.5 nautical miles off the coast of Plaquemines Parish in 60-foot waters. The loading platform and marine berthing facilities will contain a loading arm system to load onto a single LNG trading carrier. At press time, the U.S. Coast Guard and Maritime Administration, or MARAD, were working on an environmental impact statement.

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 23

NEWS: PORTS

DEEPWATER PORT LOCATION AND LICENSE STATUS Applications currently under review 1. Bluewater SPM (oil export) 2. SPOT Terminal Services (oil export) 3. Texas COLT (oil export) 4. Texas GulfLink (oil export) 5. Texas Gulf Terminals (oil export) Approved: Operational facilities 6. Louisiana Offshore Oil Port (oil bidirectional) 7. Neptune (LNG import) 8. Northeast Gateway (LNG import) Approved: License issuance pending 9. Delfin (LNG export) Approved: Surrendered licenses 10. Gulf Landing (LNG import) 11. Port Dolphin (LNG import) 12. Port Pelican (LNG import) Approved: Decommissioned 13. Gulf Gateway (LNG import) Approved: Withdrawn after record of decision and prior to license issuance 14. Bienville (LNG import) 15. Main Pass Energy Hub (LNG import)

There currently are three existing deepwater port terminals: the Louisiana Offshore Oil Post (1), Neptune (2) and Northeast Gateway (3).

Withdrawn prior to record of decision 16. Beacon Port (LNG import) 17. Calypso (LNG import) 18. Clearwater Port (LNG import) 19. Compass Port (LNG import) 20. Liberty Natural Gas (LNG import) 21. Oceanway Secure Energy (LNG import) 22. Pearl Crossing (LNG import) 23. Safe Harbor Energy (LNG import) 24. Texas Offshore Port System (oil import)

This map is not to scale and port locations are estimated. Information is current as of June 25, 2019.

Disapproved prior to record of decision 25. Cabrillo Port (LNG import) 26. Port Ambrose (LNG import)

SOURCE: U.S. Department of Transportation Maritime Administration Deepwater Port Licensing Program

It’s a whole new world today, as an influx of Gulf of Mexico crudes and weakening prices have contributed to a seismic shift to exports. About 40% of vessels now leave full of U.S. crude for export markets, much of which includes a grade of crude called Mars Sour, produced offshore by Royal Dutch Shell Plc. A relatively simple operation, LOOP is comprised of a large platform outfitted with pumps, three Single Point Mooring (SPM) buoys for the VLCC tankers and flexible pipelines. The port is supported by two onshore facilities: the Fourchon Booster Station and Clovelly Dome Storage Terminal. At Clovelly, up to 40 million barrels of crude oil are stored in underground salt caverns. Despite its advantages, Tulane’s Smith says the LOOP facility is somewhat constrained by its original purpose, as it now has only one pipeline for both importing and exporting. “It’s a cumbersome process the way it’s set up,” he adds. “They made some modifications, but the real solution is to invest in a new pipe.”

For this and other reasons, LOOP stands to face some stiff competition from Texas. According to the U.S. Maritime Administration, the five applications currently under review for deep water exporter ports were submitted by Bluewater SPM, SPOT Terminal Services, Texas COLT, Texas GulfLink and Texas Gulf Terminals. Most of the investors are planning to export crude oil from the Eagle Ford and the Permian Basin shale plays, as well as from Canada. This would likely take potential business away from LOOP as it would give Texas producers a nearer option to get the shale play crude to market. In September, a Federal Register notification indicated that Houston-based West Delta LNG is seeking permission to build a fixed-platform deepwater port roughly 10.5 nautical miles off the coast of Plaquemines Parish in 60foot waters (see sidebar, page 23). In determining the location for its offshore deepwater facility, Abadie says Sentinel examined a variety of factors, including a keel clearance

24 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

of 100 feet, absence of any nearby exploration or production activity, and waters clear of any underwater obstructions. Checking all those boxes can be a challenge, Abadie says, but it’s all necessary to support the massive VLCC tanker ships. “They’re 1,100 feet long and they’re drafting about 75 to 80 feet fully loaded,” Abadie says. “And when the ship first starts up and gets to full speed, it kind of digs down a little bit.” Sentinel Midstream’s Texas GulfLink project is financed by Dallas private equity firm Cresta Fund Management, while Abadie-Williams is the primary engineering and regulatory consultant and Baton Rouge law firm Kean Miller LLP is the lead legal advisor. The company will ultimately deliver crude oil via an onshore pipeline from the Houston market into above ground crude oil storage tanks, located in a storage facility near Jones Creek in Brazoria County, Texas. The oil will be transported to one of two SPM buoys in the Gulf via a 42-inch pipeline. The

buoys will allow VLCCs to moor and receive up to 2 million barrels of crude at a rate of 1.2 million barrels of crude per day. A manned offshore platform will be equipped with round-the-clock port monitoring, custody transfer metering, and surge relief. “As the lead engineering and regulatory group, we put together the 6,000page deep water port application and are currently designing the offshore platform and components of the onshore pipeline stations,” Abadie says. “We’re also acting as the primary operational and regulatory support team through the one-year application timeline with the Maritime Administration and U.S. Coast Guard.” Elsewhere, Houston-based companies Kinder Morgan and Enterprise Products Partners have teamed up with Canadian pipeline operator Enbridge, to file for a federal permit to build a port about 30 miles offshore from Oyster Creek, Texas, where an oil storage terminal is also proposed to support the facility. 1012industryreport.com

BUILT ON INTEGRITY

BY BUILDING A COMPANY ON integrity, we’ve created a place that focuses on doing great work – and doing it safely. As the industry grows and changes, we remain a nimble, dynamic engineering and construction partner with the experience and resume to back it up. By holding true to our roots and keeping a focus on our customers’ needs, our work remains of the highest quality.

1012industryreport.com

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 25

NEWS: ECONOMY

26 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

1012industryreport.com

Surviving

rock bottom Houma service companies are adapting to a new offshore reality. BY SAM BARNES

W “All I wanted was to see bottom, because it just kept going down and kept going down. At least at the bottom, we would know we were at the bottom.”

DON KADAIR

SHANE THIBODEAUX, owner (above right), Bow2Stern Services Inc.

1012industryreport.com

hat started as a hobby for Shane Thibodeaux had become a small business success story by 2014. His boat engine service company, Bow2Stern Services Inc. in Houma, had peaked at $7 million in annual sales and 33 employees, and he was taking on new product lines and distributorships. At the time, about 40% of Thibodeaux’s work was in the offshore “blue water” market and the future looked bright. Fate, however, had other plans. The price of a barrel of oil dropped precipitously in late 2014, sending catastrophic shock waves through the area and irrevocably changing the offshore oil and gas paradigm. By 2016, Thibodeaux’s annual revenue had dropped to less than $3 million and eight employees remained on staff—even his business partner was taken off the payroll. Customers went bankrupt and bad debts had to be written off. “All I wanted was to see bottom, because it just kept going down and kept going down,” he says. “At least at the bottom, we would know we were at the bottom.” The bottom finally came in early 2018 as the offshore market stabilized, albeit at a decidedly depressed level of activity. Thibodeaux then shifted his attention to rebuilding, and a new federal marine requirement came along in the nick of time. As part of its “Subchapter M” regu-

lations, the U.S. Coast Guard began requiring the inspection of all inland vessels, prompting vessel owners and operators to refurbish their fleets and fabricate new boats, en masse. “When the Coast Guard initiated the deadline, we really began to shine because it covered just about everything that we did,” Thibodeaux says. “Everything that needed to be done, we were the team to go in and do it. That really worked in our favor.” That changed Thibodeaux’s customer mix to about 90% brown water and 10% blue water, with much of his work now on river tugboats, push boats and line haul boats. Still, he misses the heady days of oil and gas. While the Corps work might be a great addition to his portfolio— he’s back up to 23 employees—it’s not his core business. CRASHING HARD From 2015 to 2017, the direness of the employment situation played out in broad swaths across south Louisiana. Houma, Thibodaux, Lafayette and other oil and gas communities suffered sharp increases in unemployment, with rates almost doubling. As for Houma, it lost some 17,500 jobs, a decline of 17.5%. That was three times worse than the U.S. employment decline during the Great Recession of 2008-09, according to economist Loren Scott of Loren C. Scott & Associates in Baton Rouge. The hammer fell on a number

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 27

NEWS: ECONOMY

“When you drive through the east side of Houma, you’ll see the impacts … boarded up buildings and lots of ‘for sale’ signs.” DON KADAIR

LORI LEBLANC, executive director, Gulf Economic Survival Team

where near pre-2014 levels. In 2005, when Hurricane Katrina hit, there were 170 shallow water drilling projects in the Gulf; today, he points out, there are only eight. TURNING THE CORNER? Scott says good news could come sooner rather than later and gives a decidedly optimistic take on Houma employment numbers in 2020-21. He predicts 1,500 new jobs—a 1.8% growth rate—in 2020 and a robust, extraction-driven bump of 3,000 jobs in 2021. He also predicts that an expanding rig count will generate new jobs at Grand Isle Shipyard, Danos and Morrison, among others, and that shipbuilders in the region will begin hiring due to diversification and the improving offshore environment. Not everyone is in agreement with that scenario, however. The Louisiana Workforce Commission recently announced that Houma’s non-farm employment fell during the first seven months of 2019 by a hefty 2.8%. And both Lafont and LeBlanc

28 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

say they’ve seen little evidence of a resurgence—yet. Nonetheless, Scott says his research contradicts the recent LWC numbers. “Our phone calls to major firms in the region indicate slight additions to their workforce, not layoffs,” he says. “Secondly, local sales tax collections in Terrebonne Parish for the first seven months of 2019 are up slightly, not down sharply as one would expect in the neighborhood of losing 2,400 jobs.” He points to other signs of progress. Port Fourchon—a “coincident indicator” of renewed activity in the Gulf—continues to expand its footprint. Next year, $20 million will be spent to complete the expansion of the port’s “Slip C” and $8 million will be spent to dredge “Slip D.” Chett Chiasson, executive director of the Greater Lafourche Port Commission, says the port is readying itself for a pickup in activity, “but we’re not going to get too far ahead of ourselves.” He is most excited about the impending development of a $250

DON KADAIR

of companies in the aftermath, resulting in sizeable layoffs at Edison Chouest Offshore, Morrison Energy, Baker Hughes and Hercules Offshore Inc., among others. National Oilwell Varco in Houma and CCHI Aviation in Galliano shuttered their facilities entirely. Moreover, fabrication yards once filled and backlogged became ghost towns. “When you drive through the east side of Houma, you’ll see the impacts … boarded up buildings and lots of ‘for sale’ signs,” says Lori LeBlanc, executive director of the Gulf Economic Survival Team, an offshore oil advocacy group. “The downturn in offshore has had a significant impact on our economy.” Vic Lafont, president/CEO of the South Louisiana Economic Council, says there’s been a noticeably steep outmigration of jobs. That’s largely due to the blue-collar nature of the labor force, as many workers didn’t have family roots and left town when things got bad. “When you lose talent, you don’t just get it back the next day,” Lafont says. Unfortunately, there are more than a few obstacles preventing a significant offshore resurgence anytime soon. Apart from lower oil prices, a seismic shift to the shale plays of Texas and Louisiana and a less-thanideal regulatory environment also stand in the way. LeBlanc says while regulations have been streamlined somewhat during the Trump administration, more needs to be done to make the Gulf attractive. “Royalty rates need to be more competitive,” she says. “These global companies have a choice … they can drill in the Gulf of Mexico or they can go to places like Guiana. And right now they’re seeing a higher return on investment elsewhere.” Cory Kief, president of Crosby Tugs LLC in Houma, agrees that adjusting royalty rates would be a step in the right direction, but says increased federal bond requirements have had an equally depressive impact – all happening in tandem with the oil decline. “That’s when the slide started,” Kief says. “Companies started filing for bankruptcy, and the ones who could pay for the bonding didn’t have money left over for drilling programs.” He feels there’s still potential in the Gulf of Mexico, although no-

SHOCK WAVES: When the price of oil fell precipitously in late 2014, the hammer fell on a number of companies in the aftermath, resulting in sizeable layoffs, with some shuttering their facilities entirely. Fabrication yards once filled and backlogged became ghost towns.

million deepwater draft facility, which has the potential to create up to 1,300 jobs. That would enable the port to better support the service and fabrication sector. “Currently, there’s not enough capacity to adequately service what we have in the Gulf of Mexico,” he adds. “A lot of business leaves and goes to other ports, sometimes halfway around the world. We want to keep that business here.” The port plans to push the authorization through Congress as part of the next Water Resource Development Act in 2020 and begin dredging in 2021. 1012industryreport.com

DON KADAIR

ROLLING WITH THE PUNCHES: A decade ago, Gulf Island Fabrication Inc. was almost entirely focused on fabricating components for tension-leg platforms. Today, the company supports fabrication, shipbuilding and services divisions.

TALES OF RESILIENCE When the oil bust happened, those that survived did so by embracing a new reality, either shifting to brown water work, moving to the inland shale plays or diversifying into entirely different markets. Many south Louisiana oil patch companies followed their ownerclients to the shale plays and/or broadened their client base. Danos in the community of Gray is a case 1012industryreport.com

in point, as the company made a radical shift from offshore to inshore and grew its business in the process. In just the past six months, the company’s employment numbers have increased from 2,000 to 3,000. It’s also in acquisition mode, having recently purchased Shamrock Energy Solutions in Houma. Much of Danos’ work today is in the Permian Basin. “Our risk profile has changed because our work is now primarily land-based,” Owner-Executive Mark Danos says. “That

means we now have people on the road, not over water. It’s not unusual to have someone drive three hours to check a site and then another two hours to another site. In just the last year, we’ve driven a couple of million miles.” Danos also strives to be vertically integrated and offers more than a dozen different services that are interconnected and complementary. “We’re not just operating the facility or building the facility, we can do both. We don’t design it, but we can

MATTHEW NOEL

Also on tap is the port’s planned Energy World LNG project, an $888 million LNG export facility sited on 150 acres on the west side of Belle Pass. While water depths are good enough for Fourchon LNG’s first phase (2 million tons per annum), additional depth will be needed for Phase 2 (5 million tons per annum) to support larger, higher-capacity vessels. Energy World is currently leasing 140 acres at the port and has a “right of first refusal” on another 12 acres. “It’s moving along, slowly,” Chiasson says. “The Waterway Suitability Assessment will be completed within six months and then submitted to the Coast Guard for review.” Upon approval, the report will go to the Federal Energy Regulatory Commission.

A CHANGED COMMUNITY: From 2015 to 2017, the direness of the employment situation played out in broad swaths across south Louisiana. Houma, Thibodaux, Lafayette and other oil and gas communities suffered sharp increases in unemployment, with rates almost doubling.

build it, install it and operate it.” That’s not to say, however, that Danos didn’t experience some challenges in the wake of 2014’s downturn. The company lost some major contract opportunities as projects were cancelled or were moved elsewhere, but the company pivoted quickly. “Today, we’re better and stronger because we have a more diverse base.” Gulf Island Fabrication Inc. has also demonstrated an ability to roll with the punches. A decade ago, GIFI was almost entirely focused on fabricating components for tension-leg platforms, or TLPs. Today, the company supports fabrication, shipbuilding and services divisions. According to Scott, Gulf Island’s shipbuilding unit has the largest backlog of work, enough to take it through 2020 and 2021. The firm has two new contracts to build car ferries for two state departments of transportation and is working on three Regional Research Class Vessels (RRCVs) for Oregon State University. It also has two contracts to build T-ATS (military sealift command ships) for the U.S. Navy, with options for five more. “They had to diversify to offset the downturn from the offshore industry,” GEST’s LeBlanc says. “Boats are used in many other sectors of our economy; not just oil and gas. They’re actually in the process of converting a riverboat casino to a floating hotel.” Crosby Tugs also saw the need to adapt and subsequently purchased 10 dredges so it could tap into the growing coastal restoration market. The company lost about a third of its workforce after 2014; today, they employ about 1,100 employees at offices in Galliano and Houma. “Things are changing and you have to change with the changes,” Kief says. “Once you get afraid of changing, it’s going to pass you up and you’re gone. If you don’t want to accept that, well then you’re not going to last long.” As for the future, LeBlanc is optimistic that the area will bounce back through sheer tenacity. The evidence, she adds, is everywhere. “These companies are resilient and will survive by working elsewhere until the Gulf comes back to where it was … if it does. We’ve seen it time and again.”

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 29

FOCUS “That’s why you see projects ballooning out of control. They might be asking for a lump sum price before they are ready to put it out for bid. That leads to a lot of discrepancies between the drawings, scope and specifications.”

DON KADAIR

JERAMIAH BLUM, vice president of estimating at MMR Group in Baton Rouge (third from left), with his team

Estimating from scratch

BY SAM BARNES

Contractors must make best guess as they deal with incomplete designs.

he cost problems faced by Sasol during construction of its $13 billion Lake Charles complex have been well-publicized, but by no means are they uncommon. The vast majority of industrial megaprojects exceed budget and time constraints for reasons ranging from the simple to the complex. From the outset, an unrealistic cost estimate can set the stage for significant cost overruns. Speaking

at the Downstream Petrochemical Conference in Houston last summer, Cheniere Energy executive advisor Ed Lehotsky pointed to the impractical estimation of time and budget as a major reason for project failures along the Gulf Coast. He says owners and contractors should therefore avoid “lowballing” the numbers to get approvals. “The bottom line: Don’t try to fool yourself and management that you can do things cheaply,” Lehotsky adds. That’s a lesson some have learned

30 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

the hard way. In September, Sasol delayed its annual financial results for a second time to allow for a deeper investigation into what went wrong during construction of its Lake Charles project. Sasol’s board initiated an independent review into “certain aspects contemplated under the original scope,” according to a company statement. The probe also intended to determine the root cause of the overruns. Sasol’s 2019 adjusted earnings declined by as much as 14% through

June as a direct reflection of the problems. TOO EARLY, TOO FAST Precisely quantifying job costs is the first and best step to ensuring project success. Unfortunately, that’s just not possible in the current industrial climate, says Jeramiah Blum, vice president of estimating at MMR Group in Baton Rouge, which is currently demobilizing at Sasol. These days, the electrical and instrumentation contractor is asked, 1012industryreport.com

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Fortunately, a variety of technological tools make it possible to better manage the data, produce designs more quickly and stay ahead of the curve. From a fundamental standpoint, Brown & Root estimates the same way it always has, but technology helps it “lock things down and keep things more synergized,” Cashio says. The contractor is also careful to capture lessons learned and use them when estimating future jobs. “We are always looking for ways to integrate our systems as a company and be more efficient,” he adds. “Our customers are looking for those things that separate us from our competition and we’re searching hard to make sure that we latch onto the right investment.” Unfortunately, Brown & Root and most other industrial contractors share a common problem: an inability to retain experienced talent in their estimating departments. That’s because most new hires perceive the position as a “stepping stone” to an eventual management role. This “revolving door” creates a continuous talent drain, as estimators are lost to other departments. MMR has a similar issue, as its estimators are frequently promoted to management or other positions within the company. Blum says it makes sense, as estimating is an invaluable skillset to have at the jobsite. Nonetheless, it can be an aggravating problem. “In the past, the estimating department was filled up with a bunch of old guys that had 20 or 30 years of field experience,” Blum says. “Now, it’s a 30-year-old who probably has four or five years of experience and an engineering or construction management degree. “That’s part of the transition that we’re trying to stay in front of right now,” he adds. “We have a lot of folks hired out of school that were superstars, but they moved up in the business. Technology is definitely a wonderful thing, but you’ve got to have someone with the expertise to operate that technology and understand what it’s telling you.” COURTESY SASOL

more often than not, to develop estimates based upon incomplete designs. Blum says nearly all of his estimates are calculated when designs are only 60-80 percent complete. “That’s why you see projects ballooning out of control,” he adds. “They’re putting out information too soon. They might be asking for a lump sum price before they are ready to put it out for bid. That leads to a lot of discrepancies between the drawings, scope and specifications.” It also puts the estimator in the uncomfortable position of asking some hard questions. “Do we perform a gap analysis and fill in those IN OUR ESTIMATE: An investigation into cost overruns at Sasol’s $13 billion Lake Charles complex focused on ‘certain aspects contemplated under the original scope.’ voids?” Blum asks. “Or do we just bid on what we’re seeing in the drawings so that we can be standing about a cost estimate’s billion project, when there’s still only competitive?” margin of error during the early a plus or minus 50 percent accuracy,” Scott Cashio, executive director of stages of the process.” Buckles says. In actuality, an owner estimating and proposals at Brown Projects typically go through shouldn’t pull the trigger until there & Root Industrial Services in Baton five stages: problem/opportunity is a better grasp of reality as to cost. Rouge, says bid packages are considdefinition, options analysis, technolAnother owner-induced problem: erably less detailed than they were ogy selection, detailed design and foreign companies, particularly in 20 years ago, and time frames are construction, with more definition the industrial space, downplay the shorter. “In the past, we would get added to the scope at each subsecost of labor in their estimates and complete bid packages,” Cashio says. quent stage. Eventually, the margin are more concerned about equip“We had all the drawings and had to of error is reduced from “plus or ment and materials. “Then the job ask very few questions at the end of minus 50%” to “plus or minus 10%” goes from 1 million to 1.5 million the day.” (the final stage before construction). man hours, and instead of paying Now that’s all changed. “It’s just an When an owner attempts to $2 or $3 an hour (as in some other expectation,” Cashio says. “Managecircumvent a project’s natural countries) they’re paying $65 and ment says, ‘Hey, they’re asking for a progression, such as communicating $70 an hour in the U.S.,” MMR’s lump sum price and we’re going to or funding a project too early in the Blum says. give it to them, so figure out a way to estimating cycle, unrealistic cost Redesigns and other scope get there.’” expectations are the result. Buckchanges only compound the probles says owners should provide a lem. “A redesign leads to schedule OWNERS AGREE: THEY’RE well-defined, “stage-gated” process compression, which in turn leads to PART OF THE PROBLEM where “the deliverables at each stage more overtime work and decreased Carey Buckles, engineering manare clearly defined and the engineer/ productivity,” Blum adds. “Now you ager at W.R. Grace’s Lake Charles contractor stays within those swim have even more inefficiencies and plant, says a “communications dislanes. They’re defined, written down, cost overruns.” connect” is a big part of the problem, understandable, talked about and as most owners aren’t fully aware of agreed upon during each stage.” THE REVOLVING DOOR the cost variability that exists in an Of course, that’s easier in theory Estimating an industrial project is early estimate. That could prompt than in reality, as there are numera delicate balancing act, as contracthem to fund or announce a project ous other forces contributing to the tors strive to provide realistic bids based upon an inaccurate estimate problem. Time constraints are the while being careful not to over- or provided too early in the planning most common culprit, as manageunderestimate the impact of future process. ment commits to an overly optimisvariables. They must also wade “We’re usually our own worst tic startup and production window, through voluminous amounts of enemy,” says Buckles, who has also or they’re pressured to make decidata, as design documents are typserved as a plant manager and site sions in order to capture value and ically transferred—in their entiremanager during his career. “It’s not market share. ty— by the owner to the contractor because of a mathematical mistake, “Unfortunately, they’ll just throw on an FTP site, jump drive or but simply because of a misunderout these numbers and say it’s a $10 similar format.

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 31

DON KADAIR

FOCUS: CONSTRUCTION & DESIGN

OSHA alert

BY SAM BARNES

Contractors must now evaluate and document crane operator readiness.

here’s a certain vagueness in a new Occupational Safety and Health Administration rule that outlines requirements for crane operators, but one thing is clear: the April 15 deadline for employers to evaluate their operators and produce the associated documentation has long passed. That’s worrisome, says Larry Kime, senior technical advisor for the Crane Inspection & Certification Bureau, as many contractors remain unaware of the latest rule. The Orlando-based Kime spoke at the Louisiana Gulf Coast Oil Exposition on Oct. 9 in New Orleans. “People just don’t know that this is happening, and they’re finding out the hard way that simply having

an NCCCO (National Commission for the Certification of Crane Operators) card is not good enough anymore.” The long-awaited rule introduced several significant changes that directly impact the estimated 117,130 crane operators employed in the U.S. According to OSHA’s 2018 Cranes and Derricks in Construction Standard at 29 CFR 1926

Subpart CC, employers must now evaluate their operators specific to the crane type they will be operating, even after they’ve been trained and certified by an accredited testing body. Considering the fact that crane operators commonly work as subcontractors and frequently transition between jobs, OSHA feels that permanently establishing

We want to make sure that we have someone we can trust to take care of that crane. The bigger the crane, the bigger the exposure to a potential incident.”

32 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

JESSE MORAIN, above, vice president of crane, rigging and specialized transportation, Turner Industries

the employer’s obligation to evaluate operator competency is critical to ensuring safe equipment operations. Perhaps equally important: Contractors must now maintain documentation of the evaluations on-site for as long as the respective operator is employed. “In effect, contractors are not only responsible for supplying good equipment, but trained and qualified personnel to use them,” Kime says. “They have to prove that their employees can do what they’re supposed to do. It just formalizes that process.” Meanwhile, OSHA field agents have begun actively checking for the documentation during site visits. Kime suspects that insurance companies “will also drive compliance” with the new rule. “I don’t know how effective it’s going to be in the 1012industryreport.com

EVALUATION HOW-TOS While Louisiana’s contractors must already certify their crane operators, the evaluation—and corresponding documentation— requirement could trip them up. Unfortunately, there is very little guidance from OSHA regarding the qualifications of the evaluator. The rule merely states that the evaluation must be conducted by an individual who has the knowledge, training and experience to assess equipment operators, and that they must be an employee or agent of the employer. At a minimum, the documentation must include the operator name, evaluator name and signature, date of evaluation, and make, model and configuration of equipment used in the evaluation. “At the end of the day, OSHA wants a piece of paper from the employer saying that an operator can do what they say they can do,” Kime says. One key point: The documentation must be readily available wherever the operator is working. “It can even be in his wallet, but it must only be for that employer and that employer’s equipment. If a contractor rents a new piece of equipment, they might have to perform a new evaluation. Or if they hire a guy from a union, they will have to re-evaluate that person because evaluations are not transferable between employers.” In the process, OSHA says the employer must ensure that the operator is qualified through a demonstration of “the skills and knowledge, as well as the ability to recognize and avert risk, necessary to operate the equipment safely, including those specific to the safety devices, operational aids, software, size and configuration of the equipment.” Other parts of the rule deviate minimally from an earlier 2010 standard, including requirements that an operator receive training to operate the crane type(s) for which a certification is issued, 1012industryreport.com

followed by their certification and licensing by a nationally accredited certifying agency such as NCCCO or NCCER (National Center for Construction Education and Research). A LOT OF HISTORY HERE Louisiana’s industrial community is no stranger to the operator certification process. In fact, Turner Industries of Baton Rouge was a leader in the effort to standardize the process in the 1990s through the creation of the NCCCO. For that reason, “we’re partial to them,” says Jesse Morain, Turner’s vice president of crane, rigging and specialized transportation. “We feel like they’re the most stringent of the certification agencies.” Turner’s processes won’t likely change much because of the new OSHA rule, as operator evaluations have been an integral part of its hiring processes for some time. The contractor employs some 400 operators on average, most working in its maintenance group, but that number varies as work volumes rise and fall. When hiring a new operator or purchasing a new crane, Turner designates a qualified evaluator to mentor the operator. “We send two people and in some cases three out to the crane,” Morain says. “There is the main operator, who we absolutely trust and know is qualified, and then he will have ‘studies’ with him who will learn

NEW RULE: OSHA feels that permanently establishing the employer’s obligation to evaluate operator competency is critical to ensuring safe equipment operations.

how to maintain and take care of the crane. They’ll eventually get a chance to operate it under supervision.” Following the purchase of a new crane, a manufacturer’s rep often gets involved. “Turner will send operators from different regions—Texas, Lake Charles, Baton Rouge, New Orleans etc.—to go through the crane with the manufacturer. We’ll put it through the different configurations, test everything and go through all the computer setups with the operators.” Turner’s operators are measured by an established set of safety standards. That is particularly important, as the contractor updates its fleet each year. “We want to make sure that we have someone we can trust to take care of that crane,” Morain says. “The bigger the crane, the bigger the exposure to a potential incident.” ‘SEAT TIME’ Of course, the first two OSHA requirements—training and certification—provide the more challenging hurdles for a crane operator. Recognizing a local need for “seat time” earlier this year, Associated Builders and Contractors’ Pelican Chapter began offering a two-semester mobile crane operator training course at its Baton Rouge training center. Danielle Labbe, ABC-Pelican Chapter’s director of workforce development, says eight students participated in the pilot program—

sponsored by various contractor members—to learn the basics of setting up, maneuvering and lifting with a variety of cranes. “A lot of incidents occur during the setup or breakdown phase, or during the maneuvering of the crane through a plant or a petrochemical facility,” Labbe says. Worley of Baton Rouge, which recently acquired Jacobs, sponsored the program. The training is performed over an eight-week period on Friday afternoons. In the process, ABC offers 40 hours of seat time, followed by an NCCER assessment and practical exam for certification. “They have to take a computer-based test, then a hands-on practical,” Labbe says. “It’s based off the crane in which they want to be certified.” There are other privately-run facilities of varying sizes throughout the state, each offering “one-stop shops” for both training and certification. Brandon Fontenot, a trainer at STSG Training & Services in Sulphur, says his company prefers NCCCO certification as it doesn’t limit the size of the crane that can be operated—an important attribute in the southwest Louisiana industrial community. “We offer a week-long prep course, and then we’ll set up a test administrator to come in from NCCCO,” Fontenot says. “They give the written exams, and then I give the hands-on practical exams.” The exams are difficult, Fontenot says, and have evolved over the years in tandem with changes in industry and OSHA standards. For example, practical exams are now subject to a time limit. “The goal is to have safe, efficient operators,” he adds. “If you’re in a pipe rack doing something, you don’t want an operator taking 20 minutes to get you a valve versus an operator that can get it to you in five minutes and get it there safely.” Some months, up to 20 students will participate in the STSG program, while other months could see as few as eight. The company also performs training in the plants themselves on a variety of other equipment types. “Around here, the number of students goes up and down based on when the maintenance turnarounds start.”

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long-term, but the premise is valid,” he adds. “This ensures that when we tell someone to operate a particular crane, that we’ve actually assessed whether that person can do what we’re asking them to do. That’s all this is about.”

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 33

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LABI represents 2,200 businesses large and small, who collectively employ more than 320,000 Louisiana workers. To learn more about how we help job creators and how we can help you, visit labi.org.

IN SEPTEMBER, LABI GATHERED WITH MEMBERS AND DOWNTOWN BATON ROUGE LEADERS, INCLUDING MAYOR SHARON WESTON BROOME, TO MARK THE BEGINNING OF RENOVATIONS WITH A “WALLBREAKING” AT 500 MAIN STREET, WHERE THEY TORE THROUGH IMAGES OF LABI’S OLD HEADQUARTERS TO REVEAL RENDERINGS OF THE COMPLETED PROJECT.

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“Through LABI’s Benefits Center, we’ve certainly reduced our costs using discounts available to LABI members, but our biggest savings is time. when it comes to HR and payroll, the userfriendly, streamlined administration of the tool allows us to handle enrollment or termination with a simple click of a button. it’s an extremely valuable resource for us as employers that we wouldn’t have access to if not for LABI.” -STEPHANIE RITTER - DEXCOMM, CARENCRO, LA

WELCOME TO THE NEIGHBORHOOD On behalf of the entire b1BANK family, we welcome LABI to downtown Baton Rouge. We’re excited to help the local and state economy grow together as neighbors!

BE UNCOMPLICATED b1BANK.com

Local Presence. National Impact. Did you know that since 1952, the employees of Stupp have produced tens of thousands of miles of pipe that deliver the energy needed to power our everyday lives? From the natural gas that provides electricity to our homes and businesses, to the crude oil refined into fuel for our vehicles, and the natural gas liquids that become the plastics we use in just about everything—pipelines help make possible the standard of living that Americans enjoy. To learn more about Stupp’s role in the development of our nation’s energy infrastructure, our operations in Baton Rouge, or opportunities at the company, please visit stuppcorp.com.

Oil

Natural Gas

Liquids

CO2

Products

The graphic above represents just some of the major projects that Stupp has supplied. In the past five years alone, we’ve made enough pipe to stretch from Portland, Oregon, to Portland, Maine and back!

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 43

Jacobs Field Services is now Worley

OUR WORLD JUST GOT BIGGER

worley.com

Thanks For another amazing year. Our success is only possible because of your success.

LABI Company of the Year Consulting Magazine Fastest-Growing Consulting Firms in the World Inc. 5000 Fastest-Growing Private Companies in America LSU 100 Fastest-Growing Tiger Business

EMERGENTMETHOD.COM

44 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

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NEW TO THE BENEFITS CENTER

MEDICARE OPTIONS THROUGH BLUE CROSS BLUE SHIELD OF LOUISIANA With today’s employees working longer, Medicare options are critical to employers now more than ever. LABI’s Benefits Center now offers Medicare options through Blue Cross Blue Shield of Louisiana, including:

Retiree Benefits Medicare Supplement Medicare Advantage This is another example of how our offerings are constantly adapting to our members’ real-time workforce needs. Our plan consultants at Associated Benefits are happy to work with your broker or directly with you to identify the options that best fit your budget and workforce needs. For more information, visit www.labi.org

“LABI and Associated Benefits Consulting (ABC) have both been a positive outlet in regard to employer benefits for the employers/groups I work with. They are always willing to go the extra mile to assist employers and myself in finding the missing piece of the employer’s benefit puzzle, no matter if it is for health insurance options, COBRA, Affordable Care Act mandates/reporting, and Medicare options-which are avenues good not only for groups, but also for individuals. From a broker’s perspective, what a blessing it is that I have LABI/ABC to turn to for collaboration to help the groups and individual clients I strive to help!” -MEGAN DUNN, INSURANCE BROKER 1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 45

Together, we power a brighter Louisiana. We’re the South’s leading corporate force for economic development and have been named a top economic development utility by Site Selection magazine for 12 consecutive years. We’ve worked to add thousands of jobs to Louisiana, helping our communities grow. Entergy partners with state and local agencies to boost economic development. We invest in new infrastructure while keeping rates among the lowest in the state. And because we think generations ahead, we help train the workforce of the future. Learn more at goentergy.com/louisiana.

15245-1 Entergy - ELL Economic Development Print Ad 8.875x10.875.indd 1

46 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

10/8/19 10:55 AM

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DID YOU KNOW? is pleased to have a professional team of experienced policy experts and staff who diligently work to advance our mission of providing a voice on behalf of Louisiana’s job creators. They advocate for you at the Capitol, and are available to answer your questions when policy decisions affect you.

COURTNEY BAKER

Director of Trade, Transportation and Tourism, Governmental Reform, and Strategic Fundraising

LAUREN CHAUVIN

Director of Civil Justice, Energy, and Judicial Program

CAMILLE CONAWAY Senior Vice President

MARKO MARJANOVIC

Director of Technology and Environmental Quality, and Deputy Director of Judicial Program

JIM PATTERSON

Vice President of Government Relations, Director of Taxation and Finance, Employee Relations, and Executive Director of Louisiana Right-to-Work Committee

LABI.ORG 1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 47

48 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

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INSIGHT

An exceptionally uncertain time for energy markets

DAVID DISMUKES

he last decade has completely changed the way most analysts look at energy markets. In the past, and particularly throughout the two decades prior to the shale revolution, geopolitical impacts drove market outcomes. While fundamentals were important, geopolitical events served as important inflection points relative to market trends starting in the early 1970s and continuing until the Arab Spring of 2010. Geopolitical events have certainly not gone away, but their impacts on global energy supplies and prices have been considerably softened, in very large part due to the U.S. shale revolution. Unconventional development has vaulted U.S. crude oil production to the top of the world leaderboard and, along with Russian supplies, has considerably increased the level and diversity of non-OPEC (and non-Middle Eastern) energy supplies around the globe. Without a doubt, the increase in non-OPEC supply diversity is one of the reasons why the importance of these geopolitical events, and the resulting price volatility that usually follows, have diminished. However, geopolitical events occurring over the past summer and fall of this year reminds markets that the Middle 1012industryreport.com

East is still an important part of world energy markets, regardless of the shale revolution. On September 14, 2019, Houthi rebels in Yemen are believed to have launched coordinated drone attacks against neighboring Saudi Arabia, directly into the heart of its Abquiq and Khurais oil fields. These fields—collectively accounting for 5 million barrels per day (“MMBBls/d”) of production, and the important oil field equipment that processes the lower quality crude oil produced in that region into a more suitable intermediate crude oil grade for western refining—were immediately damaged. This event, followed closely behind summer maritime tensions in the Straits of Hormuz—over which 21% of the world’s petroleum liquids consumption flows—re-energized concerns about how geopolitics, energy supplies, energy prices, and economics interact. While energy markets responded quickly and meaningfully to the attack on Saudi Arabian production, this market reaction ultimately proved to be short-lived. International oil spot prices (Brent exchange) surged on the day of the event, increasing by 20%, or $12 per barrel (“Bbl”). But futures prices, reflecting trades contracted for closure 12 months later, only increased by about $4.50/Bbl, or 8%. This pricing outcome suggests that markets were banking that the longer-run impact of the attacks would not be that deleterious to world energy supplies. Three days after the event, spot prices had fallen to around $4/Bbl to $5/Bbl above pre-attack prices. The increase in 12-month futures prices was down to just 3%, indicating that the markets were doubling down on the belief that there would be no significant long run impacts. The market’s optimism was proven

correct on October 3, 2019, when the Saudis reported that 100% of all production damaged by the earlier attacks was back online. So what does this all mean for energy markets? First, keep in mind that energy markets were already softening prior to the attacks on the Saudis and that softness will likely remain unchanged as 2019 ends. Most traders see a well-supplied energy market, relative to current (and anticipated) demand levels. This sentiment helps to assure prices will likely not spike, or are less likely to spike, should any kind of “proportional” geopolitical response to the attacks on Saudi Arabia arise between now and the end of the year. Second, U.S.-China trade concerns continue to dominate the financial press, the C-suites, and investment: The Saudi attack, while important, has clearly proven to be an inconvenient and temporary distraction. Sino-American trade concerns are not going away since it seems highly unlikely that a trade deal can be reached in the current political environment. The longer this impasse proceeds, the slower the economic growth in China and Europe, and ultimately the U.S. Uncertainty, coupled with slower economic growth, does not bode well for capital formation or, more importantly, the capital formation that has arisen to support these burgeoning trade opportunities over the past decade. U.S.-China trade intransigence has considerable implications for south Louisiana. Slower world growth means slower export opportunities relative to the new petrochemical production capacity that has been developed over the past eight years. While exports, in the absolute, are only slightly off prior levels, they are considerably off rela-

tive to the original capacity investments that were made to support a much higher level of trade. Slowing economic activity, resulting from the existing U.S.-China trade tensions, will lower the profitability of the recently completed capacity investments which, in turn, will likely chill those companies’ decisions to make additional capacity (capital) investments in the near term. Excess petrochemical production capacity is starting to arise worldwide, which does not bode well for any new capacity-oriented investment in Louisiana. The other bulwark of capital formation in the south Louisiana economy is natural gas liquefaction facilities. The story for this industry is the same if not more pronounced than it is for petrochemicals. Most industry forecasts see this industry remaining in a capacity glut at least until the 2021 to 2022 time period and potentially longer. For many natural gas export developers, contract durations are becoming shorter and shorter, the willingness to enter into contracts with higher risk counterparties is increasing, and contracted quantities are getting smaller and smaller. In other words, it’s a buyer’s market and that is not likely to change soon. Continued slower economic growth means slower energy demand, and slower energy demand means slower south Louisiana natural gas export opportunities. While geopolitical events have not particularly impacted these trends, they certainly are not helping either. David E. Dismukes is a professor and the executive director of the Center for Energy Studies at LSU. He holds a joint academic appointment in the department of environmental sciences where he regularly teaches a course on energy and the environment.

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 49

INSIGHT

Louisiana’s process manufacturing industry is synonymous with high tech

ndustry employs the latest technology to improve workplace safety, reduce emissions, and improve reliability and productivity. The use of technology has improved safety through better data collection, real-time feedback for workers and modeling high-risk activities in virtual reality before the actual work is done. Significant emissions reductions have been achieved through new camera technology and things like tank inspection robots that can go into tanks while they are in-service containing hazardous liquids. There are better response systems when problems are detected and detection in general has improved via the use of new technologies. Jobs in industry today all involve the use of technology, from stacking parts in a warehouse to implementing invisible wireless networks. However, the process industries have an unfortunate reputation of being less than high-tech, seemingly having been left behind by the glitz and glamour of computer games and the Internet. It’s perhaps not well understood that working in

50 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

technology leader. It was the process innovation in gasoline by ExxonMobil that helped the Air Force win a key WWII battle, which turned the tide in the war. And since then, many other innovations have come out of industry here. Since the mid 1980s, the acceleration in computer technology has increased innovation and invention, and industry has invested heavily in digitizing everything from its office operations and process control rooms to its pumps, valves, and even construction equipment such as cranes. But how do you digitize something like a valve? Put a smart transmitter on it that can describe the actions and well-being of the valve. It captures how old the valve is, when it was placed in service, its repair history, and of course whether it’s open or closed at the moment. Industry put all this digitization in place and then in the 1990s the

challenge became how to use all the data and how to house it. When I was working at B.F. Goodrich in Cleveland, Ohio, in the early 1990s, I worked on a project whose aim was to connect information in the plant to the business so that better, more real-time decisions could be made. And this has happened at many companies since then. A great example is Georgia Pacific, where digitized or smart store shelves at Walmart (for example) report to a system that alerts the plant in Zachary that paper towels are low at a store in Lake Charles. A robot loads an awaiting truck and off the driver goes. GBRIA and the Baton Rouge Area Chamber hosted a new event in October that brought together local technology companies with industry technology leaders from Louisiana and around the world, called TEC Next (tec-next.org). The conference provided the spark to develop the next great industrial technology sector FIRST EVER: TEC Next right here. Tech compawas held in October in nies, industry, academia, Baton Rouge, bringing together local tech government and education companies with providers met for two half industrial tech leaders. days, and explored and dreamed together about the future and our role in it. The earth will have 9 billion inhabitants by 2040 and new technologies and innovative products and materials are needed to meet those inhabitants’ needs. The future is so bright for our next generation, and the opportunities for high-tech careers are right here in our backyard. COURTESY GBRIA

CONNIE FABRÉ

industry today is as high-tech as it gets. The Merriam Webster Dictionary defines high tech as “scientific technology involving the production or use of advanced or sophisticated devices especially in the fields of electronics and computers.” From Wikipedia, “technology is the sum of techniques, skills, methods, and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation.” Process manufacturing today definitely meets these definitions. Electronics and computers are controlling vessels that mix things, push things, and lift things, as well as towers that separate liquid components, wires and wireless systems. Traditional process technologies and computer technologies have blended together to the point where it’s difficult to know where one begins and the other ends. Industry has a long history in Louisiana as a

Connie P. Fabré is the executive director of the Greater Baton Rouge Industry Alliance Inc. 1012industryreport.com

SPE C I AL AD V E RT I SI N G SE C T I O N

Company

SPOTLIGHTS Trade Construction Company, LLC Wolseley Industrial Group Baker Gulf Coast Industrial

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 51

SPE C I AL AD V E RT I SI N G SE C T I O N

(From left) Eric Templet, DJ Atkinson, Glenn Ingrassia, Matt Desrosiers

TRADE CONSTRUCTION COMPANY, LLC HISTORY

Trade Construction was founded in 1982 by Will Easley and a few partners. Since then, the company has steadily grown into one of the Baton Rouge area’s most successful family-owned businesses, now under the direction of the second generation. We have more than three decades of experience doing it right. We provide services to industrial and midstream clients in Louisiana, along the Gulf Coast and, more recently, across the country. Sticking to our roots, we pride ourselves on the work we do by not only meeting our contractual commitments but exceeding our clients’ expectations as standard practice in a safe and timely fashion. We put safety first each and every time. This proficiency has been the cornerstone of our success. Trade Construction is large enough to handle major projects but small enough to provide the level of service and quality that our customers deserve and have come to expect.

WHAT WE DO

Industrial construction was the founding mission of our company. With the continued growth of our fabrication facilities, we have been able to support our clients’ construction needs with greater control and flexibility than ever before. Following strict industry safety practices, thorough quality procedures and detailed scheduling and control plans, Trade Construction is able to provide our clients with truly successful projects. We are dedicated to providing quality construction services to the US energy industry and we are well positioned to offer clients a full range of services, from pipe 52 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

and alloy fabrication to civil, structural and mechanical construction, and project specific material management solutions.

OUR PHILOSOPHY

Our flexible and experienced operations team enables us to adapt and work closely with our clients to ensure their needs are met, whether pertaining to pipe fabrication, pipeline equipment or construction. There are few in the industry that can match the quality of our product or the experience of our personnel, some of whom have been with us since day one. Ultimately, longevity and growth within the industry speak to the kind of company we strive to be. We like to keep things simple, sticking to the fundamentals on which we were based and those that have continued to foster the growth and success of our company. Our core values are our standard of behaviors by which we operate and which we want our employees to embrace. AIM F.I.R.S.T. Family - Safe and supportive Integrity - Always do the right thing Respect - Given and earned Simplicity - Don’t overcomplicate Team - It’s we not I

TOP EXECUTIVES Glenn Ingrassia, Vice President of Operations DJ Atkinson, Manager of Pipeline Equipment Matt Desrosiers, Manager of Pipe Fabrication Eric Templet, Manager of Construction

YEAR FOUNDED 1982

NUMBER OF EMPLOYEES 250

HEADQUARTERS

17043 Joor Road, Zachary, LA 70791 (225) 654-7741 tradeconstruction.com

WHAT TO EXPECT IN THE FUTURE

Trade fully appreciates the significance of the allinclusive team effort associated with any successful project. Our operations team has worked together for a number of years on many projects, continually delivering on the promises set forth in our respective contracts. In the future, Trade plans to promote and foster a true sense of unity to our clients delivered by a synergistic approach with leadership in our material management solutions, fabrication capabilities, along with safety and quality-equipped construction services.

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SPE C I AL AD V E RT I SI N G SE C T I O N

Employees are looking forward to the December opening of this new facility in Geismar.

WOLSELEY INDUSTRIAL GROUP a division of Ferguson Enterprises, LLC HISTORY

Ferguson was founded in 1953 with three branches in Beltsfield, Maryland, Newport News, Virginia, and Birmingham, Alabama. The company was acquired by Wolseley in 1984 and has grown to more than 1,500 locations in the U.S. and 200 in Canada.

WHAT WE DO

With 60 associates to service the Baton Rouge market, Wolseley Industrial Group is a leading supplier of top-quality industrial products and cutting-edge technology solutions in North America. This includes industrial pipe, valves and fittings, Resistoflex Line products, valve and automation, HDPE fabrication, Erect-a-step, and other products for industries such as oil and gas, chemical, pulp and paper, refining, mining, food and beverage, and general manufacturing. Our associates provide peace of mind for customers by ensuring that their operations run smoothly and at optimum performance levels.

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OUR PHILOSOPHY

We are a company of “quality people, quality processes, and quality products.” Although we are an international company, we are proud of the family feel of our business. We help customers reduce risk, promote safety, increase product reliability, enhance performance and realize cost savings. Developing quality-focused associates improves our ability to partner with customers and build strong relationships. Our associates receive comprehensive new hire training and participate in continuing education opportunities. Part of our philosophy is to promote safety and stewardship, thereby protecting everyone and everything that touches the industries we serve–from the consumer to workers to the environment and public. We ensure that our products conform to the specifications required by our customers, providing the framework for advancing safety, safeguarding public health and protecting the environment. We care about the communities and habitats that surround our industry sites across the country.

TOP EXECUTIVES Kevin Murphy, CEO Bill Brundage, CFO Alex Hutcherson, COO Rob Braig, VP of Industrial

YEAR FOUNDED 1953

NUMBER OF EMPLOYEES 25,000 (Ferguson, parent company)

HEADQUARTERS

12500 Jefferson Ave. Newport News, Va. 23602 225.927.2688 wolseleyindustrialgroup.com

WHAT TO EXPECT IN THE FUTURE

A new facility in Geismar will place us in the heart of the I-10 corridor. Eventually, we plan to expand into the Luling and West Bank areas as well as north Louisiana.

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SPE C I AL AD V E RT I SI N G SE C T I O N

Wayne Litton, Lance Arvel, Marty Brodnax, Charlie Granata, Joey Goscha, Logan Zeferjahn

BAKER GULF COAST INDUSTRIAL HISTORY

BGCI is a subsidiary of Baker Construction Enterprises, founded 51 years ago by Dan Baker in Oxford, Ohio. Baker began with small residential jobs placing sidewalks and driveways. Today, it is the largest concrete specialty contractor in North America. With heavy concentration in commercial/residential high-rises, sports stadiums, museums, manufacturing facilities such as car plants and steel mills, and specialty installations such as LNG tanks and Cokers, Baker desired to grow its footprint in the energy markets of oil & gas, refining, petrochemical, and supporting services. Created in 2019 to be the face of those efforts, BGCI, based in Prairieville, Louisiana, is positioned to take full advantage of the growing needs along the Gulf Coast and the nation. BGCI is led by a team of long-tenured professionals whose experience is exclusively in the energy markets.

WHAT WE DO

BGCI is a full-service civil provider handling site development, deep foundations (subcontracted), underground utility and piping systems, structural concrete installation, and site surfacing. Taking a “bolts-down” approach, BGCI can provide oversight for all other project needs, including turnkey construction through its project management and 54 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

project control services. BGCI’s expertise in the energy markets—along with best-in-class facilities, pioneering technologies, and a deep talent pool—provides significant value for owners, clients, and project teams. With more than 50 years of experience building many of the most complicated structures in North America, the company boasts a great deal of depth and knowledge in the most cuttingedge forming and pouring tecnniques. Baker has a pre-fabrication facility unmatched by any other provider. It offers constructability, engineering, fabrication and JIT delivery of all components of a structure, including meeting the scaffolding and access needs of elevated work.

OUR PHILOSOPHY

At Baker, business is personal. We treat co-workers and customers like family. We put people first. Our goals, decisions, and actions focus on building a better future for everyone who comes in contact with us. That’s the Baker way and it’s why customers can expect more from BGCI. We value people, honor, and grit: People: We practice the golden rule. Honor: We operate at the highest standards of compliance and integrity. Grit: Tenacity, will and drive are key aspects of our work.

TOP EXECUTIVES Marty Brodnax, President Joey Goscha, VP of Operations Charlie Granata, VP of Construction Wayne Litton, VP of Estimating

YEAR FOUNDED 2019

NUMBER OF EMPLOYEES 11 staff

HEADQUARTERS 14320 One Bengal Way, Prairieville, LA 70769 225.465.5500 bakergci.com

WHAT TO EXPECT IN THE FUTURE

BGCI will continue the Baker history of being the premier provider for civil services, specializing in concrete placement. Baker’s insight into the best safety processes and practices ensures that it will continue to produce installations that exceed quality expectations and safe project completion.

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BUSIN ES S

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 55

CLOSING NOTES: COMPANY NEWS HOLLAND PUMP ACQUIRED BY FLORIDA FIRM Holland Pump Company, an independent specialty pump rental and dewatering solutions provider based in Florida, has acquired Alpha Pump & Equipment, Inc., based in Baton Rouge. The terms of the deal were not disclosed. Holland Pump President Win Blodgett says the acquisition will allow the company to service industrial facilities and expand its footprint in the greater Gulf Coast region. Holland Pump was formed in 1978 and is involved in the manufacture, sales, distribution, rental, and service of dewatering pumps. The company has 65 employees in operations at six branch offices and its facilities in West Palm Beach. Holland Pump maintains a large fleet including 600+ diesel-driven rental pumps deployed primarily in the southern United States including Texas, Louisiana, Alabama, North Carolina, South Carolina, Virginia, Delaware, and Florida.

SECOND CAMERON LNG TRAIN MOVES FORWARD Federal authorities have issued Sempra Energy’s Cameron LNG export facility in Hackberry multiple regulatory approvals for its second liquefaction train, moving it closer to commercial startup by early next year. The Federal Energy Regulatory Commission has given Cameron the go-ahead on a variance request for commissioning procedures at Train 2, along with an authorization to introduce hazardous fluids and commission the unit’s ISBL Hot Oil System and PR Gas Turbine. Train 1 shipped its first cargo on May 31 and received regulatory approval to begin commercial service in late July. Estimates are that trains 2 and 3 will likely reach commercial service by March 2020 and August 2020, respectively.

lleng flow cha • Cash nging ’s cha • LNG s fortune ty on safe • Focus

80-MILE PIPELINE CONNECTS HAYNESVILLE SHALE TO SOUTH LOUISIANA LNG MARKET Enterprise Products Partners L.P. is expanding and extending its Acadian natural gas system to deliver growing volumes of natural gas from the Haynesville Shale to the LNG market in south Louisiana. The project will include construction of an approximately 80-mile pipeline originating near Cheneyville, on Enterprise’s Acadian Haynesville Extension to third party interconnects near Gillis, including multiple pipelines serving LNG export facilities in south Louisiana and southeast Texas. The LNG export market for this region includes design send out capacity currently operating or under construction of approximately 15 billion cubic feet per day. The Gillis Lateral capacity will be approximately 1 billion cubic feet per day. Enterprise also plans to increase capacity on the Acadian Haynesville Extension by adding horsepower at its Mansfield compressor station in DeSoto Parish.

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DETROIT FIRM ACQUIRES LOUISIANA SHALE ASSETS Detroit’s DTE Midstream is acquiring a gathering system and gathering pipeline in the Haynesville shale formation of Louisiana for $2.25 billion in cash. Under the terms of the agreement, DTE will acquire 100% of the assets from Momentum Midstream and Indigo Natural Resources, the primary gas producer supplying the system. Assets that are part of the acquisition include an existing gathering system and a 150-mile gathering pipeline under construction, which will be in service in the second half of 2020. Once that project is complete, DTE Midstream will pay an additional $400 million. The primary assets gather natural gas produced in the Haynesville shale basin and access multiple major downstream pipelines, including those serving the Gulf Coast, says DTE Energy President and CEO Jerry Norcia. The transaction is expected to close in the fourth quarter of 2019.

The ability n Sustain Questio

n structio n in con ugh $32 billio lined up thro it? dle are projects Louisiana han 2022. Can

PROJECTS

ely on Louisiana’s industrial sec ses exclusiv tor that focu IBUTION AREA INCLUDES THE HOUSTON REGION n o i t a R c i ST l I D b R u O p D NLY 10/12 CORRI The O

BATON ROUGE LAKE CHARLES

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ABC PELICAN HOSTS RECORD BUILD YOUR FUTURE DAY More than 1,000 high school students from across south Louisiana gathered at the Lamar Dixon Expo Center in Gonzales in September to learn about career possibilities in construction and industry. It was the largest Build Your Future Day the ABC Pelican Chapter has hosted. Some 60 construction and industry companies were on site with construction-related demonstrations and exhibits. Students in grades 9-12 safely interacted with various pieces of heavy equipment and simulators to better the types of work opportunities that are available. Sarah Varner of Brown and Root Industrial Services represented her company at Build Your Future Day 2019. “Ultimately the future of industry in Louisiana is dependent on this up-and-coming generation. This event allows them to see how industry can be done from a craft all the wayDate: to the engineer.” Issue 4Q 2019 Ad proof #2 • Please by e-mail or fax withelectrical, your approval or minor revisions. Hoytrespond Ponder, a welding, • AD WILL RUN AS IS unless approval or final revisions agriculture and core teacher at Albaare received by the close of business today.

ny High School, said he brought his students to the event to raise their awareness of available job opportunities. “At Albany, we focus on welding and electrical,” Ponder said, “At Build Your Future, my students get to see firsthand pipefitting, instrumentation, scaffolding and heavy equipment demonstrations, so that they can get a well-rounded view of what construction is.” Austin Heap, an eleventh-grade student at Dutchtown High School, hopes to be part of the construction workforce in the future. “I don’t know what craft I want to go in to,” he said, “but I hope to find out today.” In addition to the demonstrations, several local contractors set up on-site performance verification trailers to show students the various components to crafts such as electrical, instrumentation and pipefitting. ABC Pelican is a nonprofit trade association of contractors, subcontractors, suppliers and industry professionals.

• Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

Peterbilt has reigned as America’s premium quality heavy-duty truck manufacturer since the company’s founding in 1939.

Rental trucks 225.273.8347 PETERBILT OF LOUISIANA 16310 Commercial Avenue Baton Rouge, LA 70816 www.peterbiltofla.com 225.273.8300

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PETERBILT OF LAFAYETTE

228 N. Ambassador Caffrey Parkway Scott, LA 70583 www.peterbiltoflafayette.com 337.314.2050

PETERBILT OF NEW ORLEANS 5708 Susitna Drive Harahan, LA 70123 www.peterbiltofno.com 504.355.4830

PETERBILT OF LAKE CHARLES 520 Pamco Road Lake Charles, LA 70615 www.peterbiltoflc.com 337.990.0305

10/12 INDUSTRY REPORT • FOURTH QUARTER 2019 57

CLAIBORNE

CLOSING NOTES: PROJECT MAPS

Project by project

BOSSIER

WEBSTER

CADDO

($25M-$250M)

BIENVILLE

Active Louisiana industrial projects announced or proposed since Jan.1, 2014, with projected capital investment of $25 million to $250 million. Second line shows projected capital investment and direct new jobs. List is representative, not complete; statuses and costs change frequently. 1 Linde World-Scale Hydrogen Plant

$250M | 15 jobs Location: St. James Parish Status: Construction begins late 2019

2 Entergy

$211M | 20 jobs Location: New Orleans East Status: Online by 2020

3 Nucor upgrade

$200M | N/A Location: St. James Parish Status: Completion end of 2019

4 Kinder Morgan Louisiana Pipeline expansion

$151M | 0 jobs Location: Southwest Louisiana Status: Permitting

5 IMIT terminal upgrades

$150M | N/A Location: St. Charles Parish Status: Construction begins Q4 2019

6 Delek Refinery

$150M | 30 jobs Location: Krotz Springs Status: Pending

7 BASF

$150M | 15 jobs Location: Ascension Parish Status: Under construction (first phase of larger MDI production expansion)

8 Shell Norco

$150M | NA Location: St. Charles Parish Status: Under construction

9 Praxair

$150M | 10 jobs Location: Ascension Parish Status: Completion set for 2020

10 Occidental Chemical

$145M | 12 jobs Location: Ascension Parish Status: Near completion

11 Air Products (Geismar)

20 Eastman Expansion

12 Westlake Chemical PVC Expansion

21 Dow/Union Carbide production and packaging

13 Advanced Refining Technologies

22 ExxonMobil upgrades

$145M | 7 jobs Location: Ascension Parish Status: N/A

$140M | N/A Location: Ascension Parish Status: N/A

$135M | 30 jobs Location: Calcasieu Parish Status: 50% complete in mid-2019

14 Dow polypropylene production expansion $119 M | 8 jobs Location: Plaquemine Status: In production by the end of 2021

15 Dow polypropylene production expansion $119 M | 8 jobs Location: Plaquemine Status: N/A

16 Cornerstone hydrogen cyanide plant

$100M | N/A Location: Jefferson Parish Status: Permit revoked; litigation pending

17 BASF Phase 2 MDI Expansion

$87M | Jobs N/A Location: Ascension Parish Status: Begin in 2020

18 Huntsman/Rubicon

$78M | 17 jobs Location: Ascension Parish Status: On hold awaiting construction

RED RIVER

DESOTO

$70M | 5 jobs Location: St. Gabriel Status: Pending

NATCHITOCHES SABINE

$61.9 M | 2 jobs Location: St. Charles Parish Status: Q1 2020 start $50M | N/A Location: Baton Rouge Status: Q1 2019 start

23 IGP Methanol Plant

$45M-$48M | 325 jobs Location: Plaquemines Parish near Myrtle Grove Status: Late 2019 start

VERNON

24 Epic Piping unnamed expansions $40 M | N/A Location: Louisiana, Texas, Abu Dhabi Status: N/A

BEAUREGARD

25 Veolia Regeneration Plant Expansion

$40 million | 29 jobs retained Location: Burnside Status: Pending

26 Port of South Louisiana improvements

$37.8M | N/A Location: Port of South Louisiana Status: In progress

CALCASIEU

27 Air Products

$25M | N/A Location: Ascension Parish Status: Under construction

CAMERON

19 Florida Fuel Connection LLC

$75M | 50 jobs Location: Orleans Parish Status: Pending

58 10/12 INDUSTRY REPORT • FOURTH QUARTER 2019

BLUE = ADDED SINCE PREVIOUS EDITION

1012industryreport.com

UNION

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

RICHLAND MADISON

JACKSON

FRANKLIN

CALDWELL

TENSAS WINN