By Ben DuBose
HOUSTON -- Several key North American gas-based projects are
likely to be delayed or cancelled in coming years due to a
lack of skilled labor, an executive with contractor Bechtel
said on Wednesday.
Speaking at the GTL Technology
Thomas M. Jones said the latest developments are a major
challenge for the construction
industry. Jones is
the manager of Bechtels chemicals technology
There are so many projects that were really being
pushed, said Jones. Its a real challenge.
If you add all the planned project
s together, you could have
100,000 craft workers needed just in Texas and
The sustainable number that can be put into the field
is probably between 40,000 and 60,000, so you just cannot see
all of these projects going forward, he added.
Just within the past few years, Bechtel has started work on
seven major North American gas projects, including LNG
ammonia-based fertilizer projects. And with the company
expecting Henry Hub gas prices to stay around $4/MMBtu to
$5/MMBtu going forward, several more proposals are already in
This has caused this big run-up in project
s in North America, and
its a challenge for the industry, he said.
One alternative to the labor shortage could be a focus on
modularization, he said, which reduces site congestion and
Were finding that a lot of our projects are
considering a modularization component, Jones said.
But there are important regional differences and higher
Another option is to bring in labor from elsewhere around the
globe, but that too would change the cost equation, he
We think theres going to be a higher bump on the
cost of labor, like a 3.5% increase or so going
forward, Jones said. Its a trade-off no
matter what you do.
In the end, Jones expects the peak of craft workers to be
around 50,000, which would force many companies to reevaluate
their current plans.
We would imagine that not all these project
s will go forward,
said Jones. All may be justified, but they may come
later in the cycle. Its a very challenging environment
The annual GTL Technology Forum continues through
Thursday in West Houston.