In May 2010, Shell purchased East Resources’ assets in the Marcellus Shale. While Shell’s initial strategy was to use local labor for fabrication and installation of their well pads and compressors, it became apparent the contracting base was not robust enough for the size, scale and productivity targets Shell required. As a result, Shell turned to the Gulf Coast to find contractors that could deliver their projects safely and on-time. Shell tendered eight contractors and PES was one of three selected to provide Mechanical, Electrical and Instrumentation (MEI) services on an on-going basis.
The typical compressor station is designed to compress natural gas from the Shell Wet Gas Gathering System to sales pressure prior and dehydrate to pipeline specifications. The compressed, dehydrated natural gas is delivered to either the Shell Dry Gas Gathering System or to a 3rd Party for subsequent sales. The Compressor Station Scope includes installation of inlet separation, gas compressors, sound attenuated buildings, fire and gas detection, filter separators, dehydration units, storage tanks.
PES mobilized 100 construction and I&E personnel to the Tioga County, Pennsylvania to support Shell’s assets. While pipe fabrication occurred in Houma, PES’ crews completed the installation services at several sites across Northern Central Pennsylvania.
For one project, PES was asked to reduce its construction schedule for a compressor station from 70 days to 20 days due to potential reservoir issues below ground. PES responded by running its crews in 24 hour shifts and delivered to project in 22 days.
This on-going contract is strategically important on three levels.
First, it was the first time to perform an on-going construction project for a super major. PES underwent an extensive audit in order to participate in the bid. PES was rated “green” by Shell’s auditors, which is the highest level for their audits. It is unusual for a contractor to rate “green” the first time.
Second, Shell is a major Operator in the Gulf of Mexico and has three core contractors providing MEI services to their assets in the GoM. The management and procurement of these services is out of New Orleans and PES markets heavily to that office. Additionally, they have major projects planned in the near future. With this contract, we have certification within Shell that we have successfully performed for Shell Upstream.
Third, PES was able to translate its offshore skills and mentality successfully to the onshore shale market. With this experience, it is possible for PES to refine and replicate its experience across other shale plays.