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Project(s): View 14 related projects in PECWeb
Plant(s): View 3 related plants in PECWeb
Released August 04, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--SNC-Lavalin Group Incorporated (TSX:SNC) (Montreal, Quebec) is the latest energy services company to pare its operations amid the one-two punch of low commodity prices and the COVID-19 pandemic. The engineering, procurement and construction (EPC) firm announced its legacy resources business and associated lump-sum turnkey projects "will be largely wound down," with all ongoing projects in its soon-to-be abandoned markets wrapping up by the end of 2020, according to a quarterly earnings-related press release. Industrial Info is tracking $77 billion in active projects involving SNC, including nearly $30 billion worth that have been delayed or otherwise affected by COVID-19 precautions.
The move represents a dramatic narrowing in focus for one of North America's top energy-related EPC providers. SNC will limit its resources work to nine countries in the Americas and the Middle East, where it enjoys its most profitable relationships in the energy and mining industries. The move will end SNC's resources work in 21 other countries, slashing its headcount to 8,000 from 15,000 by the end of 2020, with 2,000 more layoffs set for 2021, according to the company.
Click on the image at right for a graph detailing SNC's active projects worldwide, by industrial sector.
The economic downturn has halted energy-related construction projects worldwide and battered SNC's profits from lump-sum turnkey projects, which typically operate on fixed-price contracts in which the service provider has to pay for any excess costs. These projects accounted for 78% of SNC's $122 million in adjusted second-quarter losses before interest and taxes, according to The Canadian Press. Ian Edwards, the chief executive officer of SNC, said red flags were popping up around fixed-price contracts long before COVID-19 was even discovered.
Among the projects to see continued progress is Birla Carbon USA Incorporated's (Marietta, Georgia) $100 million in equipment additions at its Franklin Carbon Black plant in Centerville, Louisiana, on which SNC is providing EPC services. The project will add a wet scrubber unit with a downstream selective nitrous oxide catalyst-reduction system, allowing the facility to comply with an industry-wide consent decree to reduce emissions at carbon black plants. COVID-19 precautions somewhat slowed the project after construction kicked off in April, but it still is expected to meet its scheduled completion in third-quarter 2021. For more information, see Industrial Info's project report.
Edwards also said in the quarterly earnings-related conference call that progress was resuming on Ontario Power Generation Incorporated's trio of life extensions on units at the Darlington Nuclear Power Station in Bowmanville, Ontario, which had their completion dates pushed back substantially. These include:
Among the largest SNC-related projects to be frozen following COVID-19 lockdowns is Pacific Future Energy Corporation's (Vancouver, British Columbia) refining complex in Prince Rupert, British Columbia, which was placed on hold last month. The proposed, 200,000-barrel-per-day (BBL/d) facility is planned to be built in multiple phases totaling nearly $11 billion in investment value, including:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The move represents a dramatic narrowing in focus for one of North America's top energy-related EPC providers. SNC will limit its resources work to nine countries in the Americas and the Middle East, where it enjoys its most profitable relationships in the energy and mining industries. The move will end SNC's resources work in 21 other countries, slashing its headcount to 8,000 from 15,000 by the end of 2020, with 2,000 more layoffs set for 2021, according to the company.
Click on the image at right for a graph detailing SNC's active projects worldwide, by industrial sector.
The economic downturn has halted energy-related construction projects worldwide and battered SNC's profits from lump-sum turnkey projects, which typically operate on fixed-price contracts in which the service provider has to pay for any excess costs. These projects accounted for 78% of SNC's $122 million in adjusted second-quarter losses before interest and taxes, according to The Canadian Press. Ian Edwards, the chief executive officer of SNC, said red flags were popping up around fixed-price contracts long before COVID-19 was even discovered.
Among the projects to see continued progress is Birla Carbon USA Incorporated's (Marietta, Georgia) $100 million in equipment additions at its Franklin Carbon Black plant in Centerville, Louisiana, on which SNC is providing EPC services. The project will add a wet scrubber unit with a downstream selective nitrous oxide catalyst-reduction system, allowing the facility to comply with an industry-wide consent decree to reduce emissions at carbon black plants. COVID-19 precautions somewhat slowed the project after construction kicked off in April, but it still is expected to meet its scheduled completion in third-quarter 2021. For more information, see Industrial Info's project report.
Edwards also said in the quarterly earnings-related conference call that progress was resuming on Ontario Power Generation Incorporated's trio of life extensions on units at the Darlington Nuclear Power Station in Bowmanville, Ontario, which had their completion dates pushed back substantially. These include:
- an estimated $4.22 billion extension to Unit 3 from the summer of 2023 to the first quarter of 2024; see project report
- an estimated $4.2 billion extension to Unit 1 from the third quarter of 2024 to the summer of 2025; see project report
- an estimated $4.2 billion extension to Unit 4 from the first-quarter to fourth-quarter 2026; see project report
Among the largest SNC-related projects to be frozen following COVID-19 lockdowns is Pacific Future Energy Corporation's (Vancouver, British Columbia) refining complex in Prince Rupert, British Columbia, which was placed on hold last month. The proposed, 200,000-barrel-per-day (BBL/d) facility is planned to be built in multiple phases totaling nearly $11 billion in investment value, including:
- a carbon capture and storage plant; see project report
- a gas oil hydrocracker/hydrotreater unit; see project report
- a residual hydrocracker unit; see project report
- a refinery offsite utilities unit; see project report
- a sulfur recovery complex; see project report
- a crude and vacuum unit; see project report
- a hydrogen (H2) unit; see project report
- a naphtha hydrotreater unit; see project report
- a distillate hydrotreater unit; see project report
- a light ends recovery unit; see project report
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
