HC Price

Source: Energy Digital

Date :3/18/2008 4:37:49 AM

In a growing market, HC Price, a talented general contractor, renowned within the North America energy industry, has announced plans to merge with Gregory and Cook Construction in a move that will expand the capabilities of both companies

Written by Ian Armitage and Produced by Rich Gentile

HC Price Co. (Price) is a diverse, privately-owned general contractor, which recruits and retains highly qualified and experienced professionals to run the company. Price’s mission has always been to provide good value for customers while maintaining a record of a timely and safe performance.

Price specializes in the “construction of energy transmission infrastructure, such as pipeline systems,” explains Mr. Tom White, President, who went on to tell Exec that Price has a rich history in the pipeline industry. Indeed, Price is credited with development of many modern pipeline construction techniques used around the globe.

“Price has a distinguished history, having been in business for 87 years,” continues Mr. White. Price’s history began when Harold (Hal) Charles Price, Sr. founded an electric welding business in Bartlesville, Oklahoma during the late 1920’s. The company specialized in field welding of oil storage tanks. In conjunction with this operation, Hal Price was responsible for many innovations in electric welding including the first practical application of electric welding in pipeline construction.

Over the years, Price grew from a welding subcontracting business into a major cross-country pipeline contractor who to this day remains a strong competitor, building and maintaining pipelines and various other oil & gas infrastructure throughout the United States and Canada.

During the latter half of the 1960s, Price, as part of a joint venture with other major construction companies, entered the overseas pipeline construction market. These joint ventures completed many major projects in Mexico, the Middle East, Africa, and Iran. Price also built large cross country-pipeline projects and performed double jointing work in Canada and Mexico. Price’s pipe coating business grew out of the pipeline construction operation.

This coating business developed from a small domestic operation that began in the United States and evolved into a massive pipe coating operation with plants located throughout the world. Until 1980, the pipeline construction and coating operations were run by Harold C. Price, Jr., the son of the founder, and owned in large part by members of his family.

During 1980, the pipe-coating segment of the business was sold. H. C. (Charles) Price, III, and partners purchased the pipeline business. Construction of the Northern Border 42” Pipeline system and the numerous large expansions of the Alaska North Slope Oilfields also began during this period, in the early 1980s. They soon thereafter completed many successful projects in Alaska and continued to prosper with the expansion of the gas pipeline industry throughout the ‘Lower 48’, United States.

During 1998, Price purchased a major Canadian pipeline construction firm, OJ Pipelines, based in Edmonton, Alberta. A mechanized welding process for pipeline construction, used and marketed by OJ Pipelines as RMS Welding Systems, was included in the purchase of the company. Price utilized this mechanized welding system to weld 165 miles of 36”, X-70 pipe in North Dakota for Alliance in 1999/2000 and used it successfully on the Guardian Pipeline Project, a 140-mile 36”-inch diameter pipeline project running from near Chicago, IL north into southern Wisconsin.

Some other advancements by Price over the last several years include:

• Developed use of electrical welding of pipelines, the use of removable back up rings for use during welding, and the so called “stove pipe” method of pipeline assembly.

• Developed and pioneered the use of pipe coatings for protections against corrosion and for buoyancy control.

• Constructed the first “Big Inch” pipeline, during WWII in the Continental US.

• Constructed the first Arctic pipeline in North America, during WWII, in the NW Territories, CA.

• Constructed many major pipeline systems in northern Africa, the Middle East, and Iran during the 1970’s.

• Constructed Section 3 of the Trans Alaska Pipeline System.

• First to introduce use of mechanized welding in the USA and the first to successfully use it on Duplex stainless steel in Prudhoe Bay in a production mode during bitter winter conditions.

Today, Price is a market-leading general contractor who has long been regarded as one of the world’s most technologically advanced pipeline contractors. With operations in the United States (lower 48 and Alaska) and Canada, Price has built some of the most challenging and important pipeline projects domestically and internationally.

“Price’s main office is located in Dallas, Texas, with regional division offices in Cedar Rapids, Iowa, Anchorage, Alaska, and Nisku, Alberta, Canada, and we have built some of the largest pipeline projects ever built,” adds Mr. White. “During the 40s, Price built the first North American Arctic pipeline located in the NW Territories. During the 70s, Price built Section 3 of the Trans Alaskan Pipeline, The Iraq to Turkey Crude Transport Pipeline, and the Tehran to Rey, Iran Crude Transport Pipeline System. I could go on all day!”

During the 80s, Price built Northern Border and participated in millions of man-hours of work in Prudhoe Bay, Alaska while helping to build Alaska’s oil transportation infrastructure out of the North Slope oil fields.

During the 90s, Price built or participated in most of the major projects constructed during the decade. A summarized list of these projects follows:

• Great Lakes 36” Expansion in 1991

• “PGT-PG&E” - 165-mile 42” northern California Spread expansion in 1992-1993

• Florida Gas Phase III Expansion - 300-miles of 30” and 36” in Florida and Louisiana during 1994

• MAPCO 500-mile 10” and 12” South Spread in New Mexico during 1995.

• “Express” Pipeline Project in Montana during 1996

• Northern Natural Peak Day 2000 Project in Minnesota during 1997

• “Destin” - 135-mile 36” Pipeline Project in Mississippi during 1998

• “PNGTS Pipeline Project” - 70-mile 24” in New Hampshire during 1998

• “Maritimes & Northeast Pipeline Spread 2 Project” - 70-mile 24” in Maine during 1999

Since 2000, Price has built several large projects including those below:

• “Alliance Pipeline Project, Spread 2” - 165-mile 36” in North Dakota during 1999 through 2000

• “Northern Border Pipeline, Project 2000” - Project 30-mile 30” in Illinois during 2001

• SONAT South System Phase II 28-mile 30 and 36” Looping Project in Mississippi and Alabama during 2002

• “Guardian”, a 140-mile 36” pipeline in Illinois and Wisconsin

New Era

In a move signaling a new era for Price, they have just announced a merger with another pipeline constructor, Gregory & Cook Construction, a step which will expand the joined companies’ capabilities in a growing market.

According to Mr. White, the formation of Price Gregory Services, announced on January 31, 2008, by Charles Price, III, Chairman of Price, and Paul Gregory, President of Gregory & Cook Construction, Inc., “brings together two of the largest and most respected pipeline-related infrastructure service providers in North America. Both companies own an excellent track record for customer satisfaction. The combined company, Price Gregory Services joins two groups of personnel with decades of experience leading our industry.”

Price Gregory Services will “better serve existing clients because of our expanded asset base and increased geographic coverage,” says Mr. White. This will broaden our capabilities.

“This is a very exciting development. We can now, as a single contractor offer clients an option to build a 1000, or even a 1500 mile pipeline project. Until now, Price didn’t have that capability. Both companies have always been well respected in the industry, and this is certainly a positive development.”

Mergers

This merger is a natural part of Price’s evolution, a progressive move to remain competitive. “Mergers and acquisitions are commonplace in pipeline construction industry, just as in various other energy fields. This merger phenomenon is natural as customers want more from a single source,” explains Mr. White, who will become the Chief Operating Officer of Price Gregory Services.

Houston-based private equity firm, SCF Partners, will assist with financing the transaction through an equity investment. SCF will assist the Price Gregory Services with strategic growth initiatives. SCF Partners has invested over $1.2 billion in 45 energy services companies and has assisted its portfolio companies with over 200 acquisitions worth over $6 billion.

The biggest challenge

According to Mr. White, the pipeline construction industry is experiencing the largest volume of projects in “many, many years.” Mr. White believes that Price Gregory Services’ largest challenge will be the scarcity of available manpower. “Skilled and unskilled labor is in high demand and short supply, right now, especially welders and experienced operators,” Mr. White says.

“Equipment is also in short supply, given greater global demand. With the increase in volume of construction, combined with the greater need for energy transmission infrastructure, these pressures on contractor resources will continue for some time into the future.” According to Mr. White, the compelling question for the industry is, “how do we overcome this resource constraint challenge?”

Price Gregory will focus on retaining existing and hiring new staff. “Price Gregory, along with almost everybody else in the industry, is investing in training programs. As a union contractor, the unions support us by also investing in training programs to build their union membership. The unions are running training centers and are striving to fulfill our industry’s need for more skilled craftsmen, such as welders.”

Mr. White says Price Gregory Services will focus on continuous improvement. Price Gregory’s mission will be to focus on the customer, giving them better value for their investment. “Price’s continuous improvement, particularly in equipment, has helped to keep us on top of our game. We’re always looking for better methods to build pipelines, and efficiency is high on Price Gregory’s agenda. Our focus is always to increase productivity, raise production with fewer workers. That is what we shoot for, always.

“Five years from today we will see the company through diversification – possibly growing into new fields. Price Gregory Services’ mission is to grow through diversification. That’s our long term goal.”

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