A new pipeline project can’t move forward if there’s no pipe to install. That’s where transportation firms like Pe Ben USA and Montgomery Trucking/MTI Logistics come in.
Dustin Mykyte is president and majority owner of Pe Ben USA with his father Dale Mykyte. He started working with the company in 1998 in Canada and moved down to the United States in 2002. The Mykytes purchased the company in 2006.
Jason Hunt is president, Montgomery Trucking Co. and MTI Logistics. He’s a third-generation employee of the company his grandfather started in Odessa, Texas, in the 1950s. He’s worked in the industry for 12 years.
Mykyte and Hunt provided key insights into how transportation plays a key role in the oil and gas pipeline construction.
How is the pipeline transportation/stringing industry today? Improving? Declining? Stagnant?
Mykyte: The industry has gotten bigger, with more and more larger projects, and it’s a lot more complex now too. It used to be just two to four big projects per year, which were then projects over 50 miles. There was not a lot of competition. Now, there are a lot more large projects and a lot more competition. The industry is a lot more complex, with permitting, protesters, start and stop dates and weather delays. You have to be able to work around the snags.
Hunt: It’s robust. For the past couple years, the amount of work is extremely busy. We work anywhere in the continental United States. I think the current administration in Washington, D.C., has a lot to do with that. It’s a more favorable business environment.
What role does your company play in pipeline project management?
Mykyte: We get the pipe to the jobsite, and we work with owning companies, pipe manufacturers and mainline contractors. Our specific role is the responsibility in how to get the pipe to the job. Companies employ us from the point of origin to the right of way.
Hunt: That takes on a lot of different angles. Safety is definitely our top priority in transporting pipe from the coating yard or remote stockpile site to the pipeline right of way.
What services do you offer to ensure project success?
Mykyte: We scout rail siding locations and secure land for stockpiling pipe. We also secure rail transport, load the pipe on rail cars for shipping. We handle the transportation by rail to stockpiles and from the pipe yards to the right of way, laying the pipe by the ditch in accordance to the pipeline alignment sheets.
Hunt: Our basic structure is we have a safety supervisor on any pipeline project we’re working on, and they’re there with our trucks that are actively doing the stringing. The location is the single biggest item we have to ensure. We have to know the routes and terrain before we get into a jobsite.
How do you work with clients, from start to finish?
Mykyte: They’ll come to us with a plan to build a pipeline, and we’ll suggest locations for stockpiling. From the gas company and pipe mill side, we’ll go out and scout locations, and come back and say, here are you’re your options. We’ll make suggestions about certain railways and help make decisions that have a positive effect on the client. We’ll be able scout what is a good location, where there might be issues with ditches and power lines and steer them clear of congested areas. We provide pricing and estimating to the contractor to get the pipe to job, working with their engineering department for cost.
Hunt: Often when a pipeline project goes out to bid, the mainline contractors will come to us, and we’ll receive request for quote (RFQ). Sometimes there will be multiple contractors quoting on a project, and our quote is based on the specific project information. We provide a quote to the pipeline contractor.
Ultimately, the contractors choose their subcontractors, and that’s how we serve them, as a subcontractor. They’ll award us the stringing, and then we’ll iron out all details. They’ll tell us how much footage per day, their production rate they’re set up for, and we’ll match up the equipment and personnel to their requirements. Prior to their start date, we’ll mobilize to be on the jobsite for when they get started working. Our safety supervisor works with their foreman to ensure we’re maintaining progress throughout that project.
What best practices should transportation companies follow?
Mykyte: For us, it’s all about customer service. What it gets boiled down to is we’re a trucking firm, working for construction firms. There are many trucking firms, but not everyone has the equipment we have. We have to keep our customers happy. It’s not motto per se, it’s just the way we work. Safety is paramount. The part we do on the construction of pipelines is one of most dangerous. We have a lot of exposure. We’re hauling 80-ft long pipe, three joints to a truck. We work hand in hand with the Teamsters union to have good, solid training programs to keep loads moving as safety as possible.
Hunt: It all boils down to safety. Our job is to safely and efficiently complete a job without incident. That takes on a lot of different aspects. It’s about knowing the region and locale, and knowing our customers is very important. We’ll have a site supervisor running out roads and routes before trucks are on the right of way, which is very important. We work with cities that we may be passing through. We work with local police for route guidance, and when need be we’ll hire off-duty police officers to help control turns in small cities that we have to pass through. There are a number of safety regulations that are important for safe transportation. Equipment maintenance is also very important, making sure all equipment is in good working order.
Our fleet is mostly trucks, but we do a lot of other pipeline-related work, such as loading and unloading and maintaining pipe yards, and we have vacuum lifters, dozers and other equipment to facilitate that work.
What are the biggest challenges that you face?
Mykyte: The biggest challenge is finding employees. The age of the average blue-collar worker is getting older and older. The younger generation doesn’t seem to know about this career. We’re trying hard to get the word out by going to job fairs, running radio ads and doing what we can to get people into industry. It’s an uphill battle.
There are a lot of people who work in an office, and they have a lot of school debt. They’re not making $100,000 per year. This job, someone right off the street, as long as they work hard, pay attention and stay safe, they can easily make $100,000 per year doing this type of work.
We work with industry organizations, like DCA, INGAA and PLCA, supporting what they do to get active, and we try to go to conventions, SkillsUSA events and work with spokesmen like Mike Rowe. A pipe dream of mine is I think there needs to be a movie about our industry, like what Top Gun did for Navy aviation in the 1980s, it could be a real attraction.
Permitting and delays affect everyone. We need to secure equipment and personnel. It’s a big logistics equation, and it becomes a moving target that can be hard to pin down. If you don’t have the revenue to pay the bills during a delay, you can get into trouble really quick.
You have to network as much as you can to learn which projects have the best chance of going forward. Otherwise, it’s somewhat of a gamble. You have to have a bit of luck.
Hunt: Site conditions have to be appropriate and well-prepared for access to enter right of way locations. Authorized access roads, which are typically provided by the contracting company, sometimes can be limited, and that can be a challenge. Also, the influx of work and new people in the industry means there isn’t always the highest level of understanding. Regulatory requirements, depending on where you are, can pose some challenges too.
Site access, locale and a skilled driving force are the biggest challenges. Maybe a city has smaller streets or roads with deep ditches, it can make for narrow lanes to turn off the black top to the project right of way. How the access road is put in can help you a lot or hurt you if it’s not done well. That’s something we can’t control on our end.
Weather can also play a big role in project success. You have to have proper equipment to handle poor weather conditions.
How has the industry changed over the last five years?
Mykyte: My side of the industry is growing. With all the more stringent DOT regulations, there are more and more people getting away from trucking. There’s opportunity in the market, but it’s also a challenge for myself and my competitors.
Hunt: One of the biggest changes is the development in IT infrastructure. The industry has gone digital, with most information passed through electronic dropboxes and various FTP-type sites. There used to be a lot more verbal communication, and now it’s much more passed on digitally. There can be some lack of communication in the way things are done now.
What role does technology play in project success?
Mykyte: It plays a big role. We have switched over to automatic transmissions in our trucks, so that we can attract less experienced drivers. Anyone can drive these trucks with some training. We also use electronic drivers logs, to be ahead of the curve with expected regulations. We switched to using vacuum lifting technology a few years ago. Anything that can give you an edge of efficiency we’ll take a look at. We have GPS on all our trucks, which helps efficiency. We know where our guys are at all times.
Wherever projects are, we work with local trade unions to manage the jobs locally.
Hunt: A lot of times technology is a help, such as with electronic log devices. Software systems help manage information flow, such as tracking equipment footage and providing better care for pipe traceability.
Electronic logs help track hours of service. It’s nothing new. As opposed to paper, it’s more accurate and helps keep roads safer. It ensures we’re all on the same playing field with respect to hours worked.
We use a proprietary software system to track pipe size, diameter, thickness, footage and load type. We can run a job code on wall size and OD for every project. It’s all information that has to be tracked. If we didn’t have this technology, I don’t know how we’d perform. Recently, we’ve installed cameras in trucks to give a 360-degree view of the truck and trailer. It allows for coaching driver behavior and to manage risk when it comes to accidents and litigation. The cameras have a DVR system that’s on constant record, so we can capture any event. It all ties back to safety and managing risk.
What trends do you see for your segment of the industry in the next five years?
Mykyte: We’re seeing bigger and bigger companies. We’re starting to see companies merge and projects getting larger. I think the mom and pop shops aren’t going to be able to keep up. With the advancement of technology, you have to be able to invest in equipment and people. Going forward, I see less companies, but bigger companies.
Hunt: The market remains strong. I think it’ll be similar to what we’ve been seeing. The 2020 election will have a huge impact, depending on which way that goes. That’s the elephant in the room.
Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at email@example.com.