Cover Story: Contracting expertiseby Indrajit Sen on Mar 9, 2017
In nearly four decades that SNC-Lavalin has operated in the Middle East and North Africa region, the project engineering major has predominantly worked on oil and gas projects. Although the Canada-based company, which provides exhaustive services to four key industrial segments – infrastructure, oil and gas, mining and metallurgy, and power – it is the oil and gas segment which has allowed SNC-Lavalin to express its engineering and project management capabilities, accounting for 41% of global revenue in 2015.
The company has been successfully delivering projects across the entire oil and gas value chain, ranging from onshore and offshore production, gas processing and handling to refining and petrochemicals, pipelines, utilities and infrastructure, and non-process infrastructure. The contracting company relies on its ability to deliver comprehensive services, from feasibility studies through to construction – something that allows the organisation to firmly hold the reins over project schedules and costs in an era of below par crude oil prices.
“I believe our core strength is as an EPC (engineering, procurement and construction) contractor in the traditional sense because if you think about it everything kind of flows from that,” Alan McLean, the executive vice president of SNC-Lavalin’s Oil & Gas division in the EMEA region, tells me. SNC-Lavalin was ranked No.3 in Oil & Gas Middle East’s Top 30 EPC contractors list in 2016.
“And within that (EPC category) we have strong engineering and construction capabilities. We often use our own construction people for example rather than sub-contracting and we have got a very strong management of that in the supply chain as well. I would suggest that is our core competence within the spectrum of services that we offer. But we do like to pack off other things as well,” McLean, who has been with SNC-Lavalin since 2013, says during an exclusive interview at the company’s regional base in Abu Dhabi.
The “other things” that McLean mentions is in reference to SNC-Lavalin’s capability to support its clients at any stage of their project, by virtue of a multi-disciplinary engineering portfolio that includes aspects such as pre-feasibility and feasibility studies, front-end engineering design and other technical support to get a project ready for the Final Investment Decision (FID). The Toronto Stock Exchange-listed company’s profile is also elevated by its experience of project management consultancy (PMC) roles in the region and long term in-plant engineering globally.
“Furthermore, our capability in fast-track modular design for gas processing facilities sets us apart from the competitors and brings a new execution approach to the region. We are recognised locally and worldwide for our completions, commissioning and start-up expertise that ensures a safe, clean and tight handover of facilities. In addition, we are increasingly able to offer clients new commercial and engineering models,” the Scottish engineer from Glasgow, says.The Montreal-headquartered company’s oil and gas offering received a boost in 2015 when it acquired Kentz, an Irish firm specialised in hydrocarbon engineering, and its subsidiary Valerus. The addition of Kentz expanded SNC-Lavalin’s regional footprint. In terms of its workforce, the company has almost quadrupled in size in the MENA region, especially in Saudi Arabia – with 14,000 employees spread across 11 regional offices, accounting for almost a third of the group’s global labour strength of 39,000. It’s also given the enlarged company the ability to self-perform multi-discipline construction and inject an additional level of technical competence.
“I remember when I was with my last company (British EPC company Amec), we were bidding a lot against Kentz in Qatar, for example, for its engineering work. So, already at that time it was expanding. It has been a great addition to SNC-Lavalin’s business,” McLean recollects. “The rationale (behind the acquisition) at the time, and these things are time bound, was to grow our process in hydrocarbons business. And we looked around the world and looked at a number of companies. Due to its geographical presence and types of services, it was felt that Kentz would be a good target to actually go after.”