Energy rush

Canada has the third largest crude oil reserves in the world, after Saudi Arabia and Venezuela, with more than 95% of those reserves located in the oil sands of Alberta. It's big business if you can get a piece of the pie.

Alan Swagerman, executive vice president of crane services at crane and special transport firm Entrec, says"Oil and gas is a big part of our business. We acquired GT's Crane and Transportation Services earlier this year which has given us a leading position in Northeast British Colombia and Northwest Alberta. A big driver behind this move was the access it gave us to the oil sands region in Alberta. As the price of oil has gone up, so has our business activity."

Entrec is one of the largest heavy hauling and specialised transportation companies in western Canada. The acquisition of GT's meant their fleet increased to over 200 cranes. "Our fleet consists of rough terrains and crawlers focused on big project work", continues Swagerman. "Our taxi fleet was small and it was a priority for us to grow that side of the business. Acquiring GT's added some Grove GMK 5135s and GMK 5165s which we use mainly on completion work on oil and gas sites. Outside of the GT's acquisition we bought a lot of Liebherrs last year.

We bought three LTM 1095s, one LTM 1130, three LTM 1220 and one LTM 1350. We invested heavily in Liebherr all terrains and consider these our core taxi fleet.

"In total we added 24 new cranes to our fleet last year and expect to add a similar number this year. This is to meet the rise in demand in oil and gas projects that we're expecting in 2014."

Heavy lifting specialist Sarens set the wheels in motion for a move into the oil sands market by purchasing Canada Crane Services several years ago. "The oil sands market in Alberta is a major part of our strategy for growth," says Mike Hussey, Sarens' regional director for North America. "We see large potential both in the present and the future, and this region is the perfect platform on which to build our business in the global market."

This strategy, and the forecast, appears to be on target. "We were recently awarded our first project in the oil sands which also happens to be one of our largest contracts to date", says Hussey. Sarens' client, Spanish company TecnicasReunidas, is a leading engineering and construction company in the oil and gas sector. The firm has been contracted to construct a refinery to process bitumen from oil sands in Fort McKay, Alberta after establishing the market as one of its key areas for development. Sarens will transport the 600t modules from the port to site, where Sarens cranes will lift them onto the foundations.

"There will be three cranes involved in the core part of the project. The plant will be designed and built using modular technology with modules weighing more than 600t being lifted with a Demag CC8800-1. This is a 1600t capacity crane and is one of the largest in the world, in terms of capacity. We'll use two Liebherr 1600 crawler cranes for smaller lifts and to assemble the CC8800-1. The project is expected to take 22 months to complete with the first lift scheduled for February 2014.

Shifting sands
In the report, Time for Investors to Climb Back Into the Sand Box, analysts at Raymond James Ltd predicted that high oil prices would compel oil sands producers to push new projects out the door at speed. While this is a welcome return to oil's boom times, the lifting industry is still dogged by legacy issues. Labour shortages in the area, and the high cost of labour when it's available, remain one of the greatest challenges for contractors in the oil sands.

Modular technology -- or design -- is increasingly becoming the industry's solution to this problem, and others. "Many of the larger components for our oils sands project will be constructed off site, in the north Edmonton area, and transported back to site", says Hussey. "Temperatures can go as low as minus 50 degrees Celsius so it's critical to minimise fabrication time. Modular design is a trend that will define the development of oil sands operating environment for the foreseeable future, saving on labour costs and construction time."

Industrial Training International runs training courses for cranes, heavy equipment and rigging personnel. The company has headquarters in Washington state and Alberta and has recently opened a new state of the art training centre in Edmonton. "We were running courses in Washington state on instruction and certification in operations, inspection, and assembly and disassembly", says MD Zack Parnell, "and we noticed a steady increase in numbers of people attending from Alberta. It made sense to build a training centre there to address the needs of that area. A highly skilled workforce is essential to meet the challenges of working in the oil sands, especially as oil expenditure was increasing and demand was heightening." Improved access to high quality training could go some way to alleviating the labour problem.

From strength to strength
Strongco is one of Canada's largest multiline mobile equipment dealers, and has been expanding operations to strengthen its presence in the oil sands. "It [oil sands] is the engine that drives the entire country", says Rick Ziegler Regional Vice President at Strongco. "The bulk of our end users are in oil and gas and our growth strategy reflects this."

In 2012, the company opened a new branch in Fort McMurray specifically targeting the Alberta energy sector. This follows the construction of a new branch in Edmonton in 2011 and confirms Strongco's anticipation of expansion in the sector. "Our core product offering in the oil sands are National Crane boom trucks", says Ziegler. "They've become the standard for completion of work in gas and oil fields. Our NBT 45 has a 40.8 tonne capacity and a 127 foot, five-section full power boom and can be specially adapted with its own fifth wheel to pull a 40 foot trailer. The NBT50 has a 45.3 tonne capacity and a 128 foot, five-section full power boom. Both machines have the option of being equipped with shorter, four-section power booms, but the extra reach is crucial to some of our customers' workflow strategy."

Growth through acquisition is a common strategy for organisations operating in a sector with steep barriers to entry. NCSG Crane & Heavy Haul Services, based in Edmonton, Alberta, has seen business grow by 30% a year for the last seven years. Much of this growth has been due to acquisitions of boom truck and oilfield services company, Scorpion Industries, and crane rental company Grizzly Crane.

"Development in the Canadian oil sands was on hold during the recession but it's now restarted. We've seen activity grown since the price of oil has gone over $100 a barrel", says Ted Redmond, President and CEO. "One of the drivers behind our acquisition of Scorpion industries was their presence and exposure in the oil sands. Scorpion has grown into a leading supplier of fully operated and maintained boom truck and oilfield services in the Steam Assisted Gravity Drainage [SAGD] and heavy oil regions of Alberta. These are fast growing regions and there are numerous sites both under construction and in need of reoccurring maintenance services."

"Our long-term heavy lifting contract for the SAGD construction work at the Surmount Phase 2 site in Fort McMurray has been keeping us busy since 2011. We've been setting modules on the site using two 660t Manitowoc 18000 crawlers cranes, two 350t Liebherr LR 1300 crawler cranes, a 120t LiebherrLTM1095 all terrain, and numerous rough terrains.We set 300 modules on site in less than a year."

Acquiring Grizzly Crane was part of NCSG's aim to continue to be a major player in numerous wind energy projects that are both starting up and on-going.

Playing the long game
Where oil sands are the prevalent source of energy opportunities for the lifting industry in the West, move east and it is wind farms that are dotting the landscape. The development of clean technologies is a priority of the Canadian government, and growth in the wind energy market is closely linked to the federal and provincial governments' legislative powers. The market has been stimulated by a range of tax credits and incentive programmes encourage investment in the sector. However, more than 10 years after the Wind Power Production Incentive was first launched, incentives are less attractive and fewer in number.

That's not to say opportunities for lifting firms in wind energy market are diminishing, Surespan Wind Energy Services is a full service wind energy company operating across North America. "Wind is a strong market and it's growing," says Jason Dashney, Chief Operating Officer, Wind Energy at Surespan. "Investment has been going on for some time and these projects are now at construction stage. So we're busy and we know what construction projects we have on the horizon too".

Surespan recently took stock of the Liebherr LG 1750 lattice boom truck rane, the first of its kind in Canada, as its flagship crane. The 750 tonne crane is currently working on the South Kent wind farm in Ontario. "Up to now, we mainly used the LG 1550 but we needed an additional solution. Hub heights are increasing, plus we can't use a crawler crane on the farmland sites of wind farms", explains Dashney. The crane has rubber tyres which give it the flexibility to move freely and efficiently around the project as well as onmunicipal roads. It will be lifting to hub heights of 99 metres on a wind farm of 124 turbines.

"The 1750 will be our work horse", continues Dashney. "We don't carry a fleet of cranes as we go to local rental firms for our other lifting requirements. The cost of moving cranes across Canada is prohibitive - it actually costs a third less to transport a crane from Europe to eastern Canada, than it does to move it from the west of the country to the east.

"Having said that, we will be will be investing in our fleet this year to fulfill our installation and maintenance projects. We're expecting a busy 12 months".

Early development of renewable energy in Canada was primarily in Ontario and Quebec and the two provinces are now well established as a source of wind energy. The Lac Alfred wind farm was recently completed in Quebec with the help of four Manitowoc 16000s.

Construction of the project began in June 2011 and came to commercial operation in September 2013, ahead of schedule. The four Manitowoc 16000s, which were rented from Guay, a Quebec-based rental company, lifted the top sections of the wind towers, the turbines and the full rotors. The 72 tonne turbines were the heaviest components and were hoisted to the top of 80 metre high towers. The cranes are configured specifically for this project with the 16000 wind attachment, which boosts capacity and increases maximum boom length to 90 metres. With 150 wind turbines and a capacity of 300 MW, Lac Alfred is Canada's largest wind farm.

"This was a particularly challenging project," says Guillaume Gagnon, assistant to the president of Guay. Winds blowing from the St. Lawrence River caused the cranes' booms to frost and due to the mountainous roads, the site was difficult to access. "The Manitowoc 16000 was particularly suited to the job due to its good uphill, downhill and side slope tolerance", continues Gagnon. "That allowed it to travel over rough terrain while completely assembled.

The wind farm was constructed by Borea Construction, a Canadian company specialising in wind farms. The firm has offices in Ontario and Quebec but is planning to set up a base in British Colombia in order to meet expected wind energy projects in the west.

So is the energy sector the answer for lifting firms looking for new opportunities? For firms not already in the market, it's a tough one to crack: Harsh conditions and remote locations make the oil sands hostile to new entrants, and opportunities in wind energy are dictated by powers outside of the lifting industry's control. But with the right strategy, a highly skilled and trained workforce and good logistics management, sustainable success in the energy market can be achieved.

Raymond James expects capital expenditure budgets to expand rapidly over the next few years, foreseeing a significant increase in demand for lifting and hauling services in the oil sands. Much of this demand is expected to come from the rapid growth of SAGD projects.

According to the Canadian Wind Energy Association, the record year of 2013 for installations will be eclipsed by strong and steady growth in wind energy between now and 2016. Provincial governments in British Colombia, Alberta, Ontario and Quebec all have long term planning processes underway that will determine how future wind energy development unfolds after 2016. "We're keeping an eye on the wind energy market", says Redmond. "It had slowed down a bit, as it's so reliant on government policy, and we haven't had the same level of investment here as there has been in Europe. But we're expecting that to change over the next five years."