Snamprogetti Canada Inc.

A subsidiary of one of the world’s largest engineering, procurement and construction (EPC) contractors is gearing up for continued growth in Alberta’s thriving oil sands.

Snamprogetti Canada Inc. this year will add to its engineering staff and build a new fabrication yard while continuing work on two large projects. The Calgary-based company focuses on turnkey EPC projects in the oil and gas industry and works on large-scale projects including refinery and gas plants; chemical, petrochemical and fertilizer plants; onshore pipeline systems and power and environmental plants.

The company is owned by Saipem SPA, an international EPC contractor with projects in 100 countries. This gives Snamprogetti access to a worldwide engineering network that it taps to serve major clients. “What we offer to Canadian oil companies is something different from other companies,” President and CEO Piero Cicalese explains. “Most EPC companies offer their services on a cost-plus basis, while we do lump-sum turnkey projects and can balance the project risk with the client, resulting in a more efficient way to execute EPC projects.”

This leads to another point of differentiation: the company’s ability to serve as both general contractor and construction manager.

“We try to accommodate the needs of our clients and be very efficient,” Cicalese continues. “We try to serve clients the best way we can and manage our clients’ risk.”

The company centers its mission on its clients and believes in tackling the challenges of each contract with professionalism and efficiency.

“We approach each hurdle a project may bring with safe, reliable and innovative solutions to suit client needs, exploiting our worldwide network in all phases of the project,” the company says. “We strive to build a capable team, willing and able to meet the demands of the job, and empower them to make informed, precise decisions that are in the best interests of our company, the environment and our valued customers.”

Snamprogetti says it believes strongly in the company’s core internal values of health and safety, research and development, innovation, quality, teamwork, internationalism, environmental responsibilities and integrity.

“These values define who we are as a company, and we strive to reflect these values through our day-to-day work,” Cicalese says.

Eyes on Sunrise
Current projects include work on production facilities for two ongoing large-scale projects in Alberta, with others expected in 2012. “We’re doing very well and have a lot of projects coming upstream,” Cicalese adds. “In the last two years, we’ve increased our staff from 100 engineers to 500.” This demand has prompted the company to build a second fabrication yard in Edmonton. When it opens this summer, the yard will be able to handle 12,000 tons of steel yearly.

“We believe we have a strong future in Canada because we can offer what other companies cannot,” Cicalese says.

Snamprogetti will use the increased production of the new yard to build central production facilities for the Sunrise Energy Project located outside of Fort McMurray, Alberta. Sunrise, a joint venture of Husky Energy and BP, is a bitumen deposit with an expected reserve of 3.7 billion barrels total.

Husky Energy will use steam-assisted gravity drainage (SAGD) recovery technology on the site. The process involves the use of steam injection to heat and mobilize bitumen underground, allowing for easier surface pumping with minimal disruption to the surrounding surface, Husky Energy says.

Preliminary exploration work on the site included delineation wells, 3-D seismic analysis, core analysis, geological modeling, reservoir modeling and production forecasting. Information attained through this work allows the company to best place wells while enabling for the most efficient use of land and energy, the company adds.

The first phase of the project, representing an investment of $2.5 billion, is expected to produce about 60,000 barrels a day. Oil production is expected in 2014. Husky Energy will operate the oil sands facilities, while BP operates a jointly owned refinery near Toledo, Ohio, where bitumen is processed.

On the Horizon
Canadian Natural Resources Ltd. contracted Snamprogetti for the engineering, procurement and construction of a secondary upgrader for the Horizon Oil Sands Project Hydrotreater Phase 2 project in Alberta’s Athabasca region. The upgrader will have a production capability of 42,600 barrels per day.

Snamprogetti will build a gas oil hydrotreating unit, substation facilities and a water and rich amine system with interconnecting pipe rack as part of the Horizon Oil Sands Project Hydrotreater Phase 2 project. It is scheduled for a 2015 completion, the company says.

Snamprogetti prepared the engineering and design specification (EDS) package for the secondary upgrader plant by assembling documentation the company used on a hydrotreater facility completed on the Horizon Oil Sands site in 2008.

In addition to the two hydrotreater projects, Snamprogetti recently developed a hydro-transport corridor at Horizon. Civil and structural work performed on the site includes access and maintenance roads, crossing and drainage trenches, platforms and pits.

The complete Horizon Oil Sands project is expected to produce 250,000 barrels per day of synthetic crude oil from 270,000 barrels of mined bitumen on the Canadian Natural Oil Sands Lease, located roughly 70 kilometers north of Fort McMurray, Alberta.

Cicalese attributes Snamprogetti’s success on these and other projects to the efforts of the company’s staff, many of whom have worked there for much of its 20-year history. “We have very low turnover,” he adds. “There are people who work here from day one of their careers until the day they retire – people enjoy working here and want to stay with us.”

Striving to Improve
The quality of Snamprogetti’s projects is enhanced through its implementation of methodologies aimed to make the company more efficient.

“We are always continuing to improve our performance, while looking at our human resources as our most important asset,” the company says. “It is important for a company to remain competitive, while not sacrificing the quality of the work. We strive here in the oil and gas industry to meet these goals by neither sacrificing the quality of the work, the environmental impact or the end-result for our clients.”

The company adheres to a number of standards and tools including ISO, ISNetworld and Canqual certifications, as well as its internal Leadership in Health & Safety (LiHS) program. “These are just a few of the tools that Snamprogetti Canada Inc. adheres to in order to facilitate effective communication, health and safety, and sustain growth within our company,” the company says. “Our commitment to seamlessly integrate every aspect of the company and its employees has become a core value here.”

The LiHS program aims to create a culture where safety is constant. The program includes workshops and intervention tools meant to prevent unsafe behavior in the workplace.

“Everyone here goes through safety training, from the top down,” according to Cicalese.

Vendor Development
Subcontractors and vendors are a major contributor to Snamprogetti’s projects and overall success.

“We are committed to maintaining and improving a mutual, long-term understanding and trust with companies that work for and with us while providing equal business opportunities,” the company explains. “Suppliers and subcontractors are selected from around the world, based on the principle of open competition.”

The company’s vendor management process evaluates vendors’ technical, financial and organizational capabilities. Vendors are also evaluated with an eye to their familiarity with delivering lump-sum projects and their compliance with Snamprogetti policies, Cicalese says.

“Monitoring and control of suppliers’ performance is a valuable and constant process for our success and it is achieved through a vendor feedback process,” the company continues. “All vendor management activities are focused on the improvement and development of suppliers and sub­contractors.”

Staying Innovative
Recent company research and development achievements include:

Making performance improvements to its trademarked urea technology and developing integrated ammonia-urea complexes.

  • Successfully developing and demonstrating a new advanced styrene monometer (ASM) process in cooperation with the Dow Chemical Co.
  • Continuing to develop advanced pipeline design, construction and welding techniques to improve throughput capacities and reduce design and operating costs.
  • Consolidating LNG liquefaction technology design tools to support Saipem’s role as lead EPC contractor
  • Developing soil and groundwater remediation and organic compound removal technologies.
  • Developing a new technology to store large quantities of sulphur in the solid phase as well as inventing a new proprietary sulphur management approach.

Mb>Community Care
All of Snamprogetti’s projects are designed and built with their surrounding communities in mind. “In the last few years, environmental issues have been brought to the forefront of national debates, and while some companies are only recently implementing environmental policies to counter criticism, Snamprogetti Canada Inc. has been a leader in trying to reduce its environmental footprint,” the company says.

“The environment has always been a key concern for Snamprogetti Canada Inc., in that we are under the mindset that although we are using the land, we have an obligation to leave as little a footprint as possible, and our investment into research and development reflects this ideology.”

The company claims it has “written and rewritten our environmental policy to reflect and address the growing concerns for the environment, and constantly look for new and innovative ways to move forward to the next level.”

Another key part of Snamprogetti’s business philosophy involves investing in local materials and personnel.

“The local content strategy provides considerable social benefits to the host area, in terms of investments, employment, development of subcontractors and other factors,” the company says. “From Snamprogetti Canada’s Inc. perspective, maximizing local content means also developing continuing relationships with the host area and local clients and suppliers. The local content strategy provides considerable social benefits to the host area, in terms of investments, employment, development of subcontractors and other factors.”

In addition to considering the environmental impact of its projects, Snamprogetti also ensures that the native communities where it works look positively on the company. It works closely with First Nations communities, offering their members employment and training opportunities, Cicalese notes.

“We always look to respect and comply with the cultural values and traditions of the aboriginal communities,” the company adds. “Snamprogetti Canada Inc. works with these communities to maintain a positive relationship through constant consultation and communication, to ensure a mutually beneficial long-term relationship.”