Alberta oil companies are looking east for help developing the oil sands industry and Sarnia-Lambton is now squarely in their sights.
Sarnia Lambton Industrial Alliance Chairman Paul Healy and David Moody of Sarnia Lambton Economic Partnership recently spoke with 600 oil executives at the Canadian Heavy Oil Association Conference in Calgary and it has generated a lot of interest.
Healy and Moody addressed the Calgary crowd, explaining how Sarnia Lambton’s industrial fabricators could fill an unmet labour need for the oil sands industry. Moody says about 20 executives wanted to explore the possibilities of working with Sarnia-Lambton businesses. “Many more indicated they would be passing the word along within their companies that there is capacity within Canada that matches to their needs and Sarnia-Lambton is where they can find it,” says Moody. “They all agree the supply ability of the companies in Alberta is not nearly adequate and they feel sourcing within Canada makes total sense. Sourcing from an area that is already experienced in the oil industry seems to be the logical first choice.”
Healy agrees. “I sensed a bit of frustration to what their current providers can give. They all want to expand at the same time…There just aren’t enough workers.”
Healy says some of the companies have tried to use off-shore companies where labour is cheap but found the quality of workmanship was not that good. He says they’re now turning to Ontario where workers are paid a similar base hourly rate, but total labour costs are still far lower than in Alberta. “In Ontario there is no living away from home allowance, no travel expenses for the workers…no hourly premiums for the workers…It’s big savings that more than pay for the shipping costs.”
And Healy says Sarnia-Lambton workers will provide quality workmanship on time. “We will have better productivity in Sarnia. Now the oil companies are paying for time and materials for construction…we bid on a unit price in Sarnia-Lambton,” he says, explaining companies can be assured there won’t be cost overruns with a unit price.
Healy says the contacts made at the Calgary conference are part of a two-year effort to bring oil sands fabricating work to Sarnia-Lambton; an effort which is starting to pay off.
While the Sarnia Lambton Industrial Alliance works to build a heavy haul route to the St. Clair River to open up southern Ontario for massive fabricating projects, Healy says there are plenty of opportunities for fabricators to work with smaller oil-patch companies building smaller modules.
The conference even highlights the opportunities Sarnia-Lambton has to work in the off-shore oil industry on the East Coast. “While we work to cut a path between Ontario and Alberta for the larger modules, there will be still business in the smaller modules,” says Healy. “And the East Coast has expressed some interest too…because the Great Lakes system ships right out to the oil platforms …it is a no-brainer to go that way.”