Regina – TransCanada looked at the way it does business and realized it wants to diversify its supplier base.
That was the message from Andrea Korney, senior manager, supplier diversity and stakeholder relations with TransCanada at the Saskatchewan Oil and Gas Supply Chain Forum in October.
This is of particular consideration as the long-delayed Keystone XL pipeline project is now planned to start construction in the second half of 2019.
“We are re-engaging in this project,” she said. “We have all the major permits that we need, across Canada and the U.S.”
The project will have 38 pump stations, eight of which are in Canada.
The 36-inch pipeline will run from Hardisty, Alta., connecting to the original Keystone pipeline at Steele City, Nebraska. It’s almost 2,000 kilometres of new pipeline, of which 529 kilometres are in Canada, and of that, a large portion is in Saskatchewan.
Korney noted there was some long political history involved, saying “We’ve been trying to build this pipeline for over 10 years.”
In January 2017, newly-elected President Donald Trump invited TransCanada to resubmit its application. (The project’s Presidential Permit application had been denied by previous President Barack Obama.) A few months later, he granted the Presidential Permit. The recent approval by the Nebraska Public Services Commission in November 2017 led to the company re-engaging.
“We are in the process, right now, of construction preparation activities. This is engaging with our prime contractors, understanding what suppliers exist locally across where this project will go ahead. We’re also looking to secure some of the land permits and agreements that we to go; environmental surveys, of course, as well,” Korney said.
“The anticipated construction for this project is for 2019 and 2020, with an in-service date of 2021. And of those of you who speculate this might have something to do with U.S. elections, you’re probably not wrong. Our intention is to really get this project going, but it is also very important to TransCanada. This is something we really believe in. Its been in our books for a very long time.”
She noted there are still some regulatory challenges in the U.S. they are keeping a close eye on. “But we’re continuing to proceed as if we’re going to have construction in that 2019-2020 time frame.”
Korney spoke of engaging with a broad range of qualified suppliers.
“The original Keystone line really brought to our attention that we really need to focus on diversification of our supply base,” she said.
“What can happen in supply chains is you can get very long-standing relationships with your prime contractors and they tend to know how to bid your projects, you know how to receive their projects. If we don’t continue to add diversification in our supply base, we could not be getting the best commercial value. We might not be seeing the most innovative practices and processes. So we really want to continue to make sure we work to diversify that supply base, work with our primes to ensure they’re following the principles TransCanada really values, making sure work stays locally around your communities.”
She noted Bloomberg recently recognized TransCanada on a sustainability index for Indigenous relations, public affairs, community relations and their supplier diversity program. A lot of that came from these efforts seeking diversity in its supply chain.
“Our contracting strategy is to ensure we are including diverse, local, Indigenous suppliers within our overall supply chain, whether, we, with a unionize workforce or non-union. We do that in many ways. Through our major projects, what we do is we look at the scope of the projects. We look at the areas the projects are happening. And we try to align those things with the local goals of some of the associations, ministries, chambers of commerce, any of the unions that happen to be present in the places we’re working.”
Korney noted the use of local hotels and restaurants, as well as educational opportunities.
In operations, she said the company has an intensive pipe integrity program, spending hundreds of millions of dollars each year on things like integrity digs.
Regarding contracts, she said, “All types of contracts can be used in our contracting strategy. We are a category management shop at TransCanada, so we do have categories of spend, however, that doesn’t limit the opportunity to do things that make sense on a scope by scope basis, and using different forms of contracts and how we do that.”