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GTL ’14: North America gas projects challenged by worker shortage

07.30.2014  |  Ben DuBose,  Hydrocarbon Processing, 

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.


By Ben DuBose
Online Editor

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 Forum, Bechtel’s Thomas M. Jones said the latest developments are a major challenge for the construction industry. Jones is the manager of Bechtel’s chemicals technology business.

“There are so many projects that we’re really being pushed,” said Jones. “It’s a real challenge. If you add all the planned projects together, you could have 100,000 craft workers needed just in Texas and Louisiana. 

“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 plants, petrochemical complexes and 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 the works. 

“This has caused this big run-up in projects in North America, and it’s 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 average construction manpower.

“We’re finding that a lot of our projects are considering a modularization component,” Jones said. “But there are important regional differences and higher costs.”

Another option is to bring in labor from elsewhere around the globe, but that too would change the cost equation, he warned.

“We think there’s going to be a higher bump on the cost of labor, like a 3.5% increase or so going forward,” Jones said. “It’s 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 projects will go forward,” said Jones. “All may be justified, but they may come later in the cycle. It’s a very challenging environment right now.”

The annual GTL Technology Forum continues through Thursday in West Houston.

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John Licht

There are plenty of available skilled experienced (eastern & western Kentucky coal miners available.

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