TORONTO — Coated pipe supplier ShawCor Ltd. (TSX:SCL.A, SCL.B) announced Tuesday that it has won major contracts to supply liquefied natural gas projects in Australia that its CEO described as “unprecedented.”
Together the contracts could be worth $570 million to the Toronto-based company, which employs more than 5,400 people and has cashed in on the boom in pipeline projects in Canada, the United States and abroad.
“These are unprecedented in terms of size,” ShawCorp president and CEO Bill Buckley said in a telephone interview.
“They are projects that we’ve been working on and working with out clients for over a year through the preliminary engineering phases through to the awards we announced today.”
“They all seem to be coming in a clump, if you like.” Buckley added, noting that the gas from the projects is destined for markets in the Asia-Pacific region, notably Japan, Korea and Taiwan.
“It’s reflective of the continued growth in those emerging and also developed economies,” he said, adding that he expects that growth to continue with several other major projects in Australia
Earlier Tuesday, ShawCor said its pipe coating division, Bredero Shaw, had received a letter of intent from Mitsui & Co. Ltd. for $400 million worth of pipeline coatings and related products and services.
The contract is for work on a gas export pipeline on the Ichthys gas field development off the northern coast of Australia.
The letter of intent depends on a final decision to go ahead with the project by the Ichthys partners — Inpex Corp. and French oil giant Total E&P — as well as a gas production and sales deals.
The Ichthys pipeline will transport natural gas through a 900 kilometre undersea pipeline to the onshore LNG plant in Darwin, on the northern coast of Australia.
The pipeline coating work will be done at Bredero Shaw’s plants in Indonesia and Malaysia.
In another development, Bredero Shaw won a second contract from Chevron Australia Pty. Ltd. to provide pipeline coatings and related products and services on a 300-kilometre line that carries gas from fields off the coast of western Australia to the Wheatstone LNG project.
The work — worth about US$170 million — will be done in Indonesia, Malaysia and Norway.
That projects are among several liquefied natural gas projects on the drawing board in Southeast Asia and Australia to find markets for gas produced off the coasts of several countries for export to China, Japan and elsewhere.
ShawCorp holds the inside track because many of the LNG fields are 100 to 200 kilometres off shore and at great depth, requiring the kind of propriety pipe coatings, including specialized insulation, for which the company is a world leader.
ShawCor Ltd is an energy services company with customers in the pipeline, pipe services, petrochemical and industrial parts of the oil and gas industry.
In Tuesday trading on the TSX, ShawCor A shares rose $1.06 to $24.84, a gain of 4.5 per cent.