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Sea-lift modules create jobs, boost economy.

Though oil prices are down, new field developments on the North Slope are fueling the economy. In fact, this year marks the first year that sea-lift modules are constructed in the state. Alaska Petroleum Contractors is the largest among fabricators creating these immense transportable facilities.

Welding sparks shower to the floor in brief, fiery flight. Overhead, cranes ockey equipment into position in bays below. Band saws, grinding and groaning, sink their teeth into structural steel.

It looks like business as usual as 80 men in hard hats move about Alaska Petroleum Contractors' fabrication shop, a pale metal-sided building down a dirt road on E. 100th Avenue and King Street in Anchorage. But inside this 60,000-square-foot plant, a revolution among frontier fabricators is taking shape-the sea-lift module.

Small truckable modules with weights up to 105 tons have been assembled in the state and driven up to oil fields for the past 10 years. In fact, APC, a subsidiary of Natchiq, Inc., the 15th largest petroleum contractor in the U.S. and largest subsidiary of Arctic Slope Regional Corporation, has built more than 100 truckable modules, totaling more than 4,000 tons. But never before have Alaska companies fabricated, assembled and barged the sea-lift module, a transportable facility for North Slope oil production and processing. These giants can push the scale to 5,000 tons.

This year oil-company giants like BP Exploration (Alaska) Inc., Arco Alaska, Inc. and Exxon Corp. decided to create an alliance to fabricate in their own backyard rather than continue to rely on companies in the Lower 48. Oil companies on the Slope want Alaska fabricators to succeed partly because it means keeping logistics local. Project teams, once sent to a far-away state, can be positioned in Anchorage at on-site trailers, saving hundreds of thousands of dollars on a single development. And with Alaska wages now more comparable to those in the contiguous states, there is more incentive to hand out contracts to local fabricators. Plus, building locally provides a healthy boost the economy.

Alpine, located 34 miles west of Kuparuk, is the largest of several new oil fields under development on the North Slope. The Alpine field project, which involves the fabrication and installation of 16 sea-lift modules and 32 truckables, alone adds $200 million in revenue to the Alaska economy, said Ted Stinson, manager of special projects with APC.

Approximately 800 to 1,000 workers will be hired between Anchorage, Kenai and the Slope to fabricate and install the modules, Stinson said. Welders, pipe fitters, electricians, instrument technicians, carpenters, laborers, equipment operators ... all will be sought in Alaska first. The project is expected to enlist 2.7 million man hours of construction work, with capital cost reaching $450 million.

"It's a very, very, very serious economic boost," Stinson said.

BP's new Northstar and Liberty fields also require sea-lift and truckable module facilities. They are projected to be functioning by 2000, said Paul Laird, spokesman for BP. Capital cost is expected to be about $400 million each.

For both projects, APC will fabricate the components for the sea-lift modules and will also fabricate and assemble the trackables, while another major Alaska fabricator, VECO Construction, Inc., will assemble the sealift modules and install them.

VECO is also fabricating and assembling the largest oil production structure ever to be built in Alaska, a six-story module bound for the grandfather of fields, Prudhoe Bay. The 2,700-ton module will be built in the port of Anchorage. By 1999 it will be sea-lifted to the slope aimed at enhanced oil recovery.

"We're doing everything we can to help VECO and APC be successful," said Arco spokesman Ronnie Chappell. "It's an important test for Alaska fabricators. With the sea-lift, you can't be late. If you're late one day, you lose a year."

To be competitive for the sea-lift contracts, Alaska companies had to meet the technological demands of the industry. The $10,000 Jimmy Jammer, an automatic welder, is one shop upgrade that helped Alaska fabricators step up their welding tempo. Automatic welding equipment is standard among fabricators down south but in Alaska it's new. APC purchased eight last year and plans to buy more.

"This is really your Cadillac of welding," said Doug George, a welder from Louisiana, who was recruited to Alaska to train local welders on automation. He said in the same 10 hours it takes to hand-weld about 12 six-inch pipes, he can complete at least 30 pipes on the Jimmy Jammer.

Located toward the back of the APC shop is another advancement, the automated plate and pipe cutter. The automated cutter uses a computerized template, which is quicker and more accurate than manually cutting with a torch. The machine's knife sheers off the steel in specific lengths and angles with one whack, Stinson said.

Automated production control adds to the shop's refinement. The administration and engineering systems are fully integrated on computer software. Shop drawings, material management, and product scheduling are easily accessible. A bar code is attached to papers that follow a component wherever it goes. At any given time, the production status can be pinpointed in the shop.

"That sets us aside from the Lower 48," Stinson said. "They haven't developed that integrated information system."

With the retooling, APC's fab shop can handle up to 60 tons of structural steel and pipe fabrication a day and is considered the most sophisticated fabrication shop on the nation's west coast. APC, which employs about 1,200, also runs a sea-lift assembly site on the Kenai Peninsula.

Acquired last year, the Cook Inlet deep-water assembly site covers 25 acres and contains a 26,000-square-foot shop. Most of the sea-lift components of steel and pipe will be fabricated in Anchorage, while the modules will be assembled at this Nikiski dock. The upgraded dock can support up to 10,000 tons.

The fabrication industry, however, hasn't always been booming. Right next door to APC, Quality Fabrication, Inc. closed down last year, a constant reminder for APC to remain competitive.

"We went from a period of basically very little activity to a period where a lot of work came at one time," said APC president and general manager Jack Laasch. "It presented a lot of challenges."

And more appears to be on the horizon. Laasch said the satellite fields on the North Slope are proving grounds for larger sea-lift contracts with oil companies in the Pacific Rim. APC hopes to land contracts outside Alaska as early as next year.
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Title Annotation:Alaska Petroleum Contractors
Author:Sullivan, Patty
Publication:Alaska Business Monthly
Article Type:Industry Overview
Date:Jul 1, 1998
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