Issue link: https://jocdigital.uberflip.com/i/1094998
April 2019 | The Journal of Commerce 21 www.joc.com Breakbulk & Project Cargo that has started to shift their think- ing about investing more overseas as well as investing in smaller projects rather than mega-projects. "[For] Canada, we see the economic picture as fairly robust Cheerful market sentiment is even leading SAL to consider kickstarting fleet renewal and expansion programs as it starts to build a forward orderbook of several months' future work. It's been a long time since that was possible. "Building a forward book was not possible while oil prices were low," Archard said. Reasons for the recent optimism include a go-ahead for a $31.9 billion Canadian liquefied natural gas (LNG) project in British Columbia and the likely green light, perhaps by April, of a long-delayed LNG scheme in Mozambique, expected to cost more than $15 billion. ExxonMobil is also moving forward with a multibillion-dollar expan- sion at its refining complex at Port Jurong, Singapore. SAL Heavy Lift is capitalizing on this early rebound with the signing of a heavy-lift contract with offshore engineering and construction services company Subsea 7. "We haven't seen the current level of upstream activity in the oil and gas sector in about four years," when oil prices peaked at around $115 a barrel in June 2014, only to plunge to less than $30 a barrel in January 2016, Archard said. His views are supported by several leading energy consultants. Keith Myers, president — research at Westwood Global Energy, said as many as 90 offshore oil and gas projects could win final investment decision (FID) approval this year, compared with 51 in 2018. "This will bring some relief to the hard-pressed supply chain, still struggling with overcapacity in most asset classes and many suppliers struggling with commercial terms. Expect to see increased A REBOUND IN oil and gas exploration and continued growth in the wind energy sector are creating hope that the decade-long downturn that has afflicted the heavy-lift and project cargo industry is finally over. Justin Archard, corporate di- rector, commercial, at super-heavy carrier SAL Heavy Lift, points to a raft of recent project approvals for petrochemical, oil, and gas projects as evidence of renewed optimism for the heavy-lift sector as it emerges from an "appalling 10 years." SAL, which operates a fleet of approxi- mately 20 ships, some of which have lift capacities of as much as 2,000 metric tons, was acquired by Bremen-based Harren and Partner from Japanese carrier "K" Line in 2017. Harren also owns special- ized project forwarder Combi-Lift. SAL energized Heavy-li carrier weighs new ship orders as approvals for oil, gas, and wind energy projects mount By Keith Wallis with the new NAFTA agreement being established last year, as well as some continued government incentives in the Alberta region to drive additional petrochemical and midstream investment." An underlying question fac- ing the EPC industry, Kulkarni stressed, is a loss of competencies across owners and contractors. This, along with a tight employment market, could make it difficult to develop and execute major proj- ects. Solutions include increased modularization, which shifts risk away from the field; standardiza- tion, which reduces design risk; and alternative contracting strategies, which should onboard contractors and vendors into projects earlier, making design and logistics plan- ning more competitive. Despite these industry-related risks, near-term needs for energy, infrastructure, and transportation should continue to drive investment across various sectors and regions, Kulkarni said. l email: janet.nodar@ihsmarkit.com twitter: @janet_nodar "The US [wind] market will probably eclipse all other markets, with plans to add an enormous amount of new capacity [over] the course of the next five years."