Strike teams up with Sentinel Energy to form $854M business
- Nasdaq company Sentinel Energy Services, formed in 2017 with the purpose of teaming up with energy or equipment-sector companies, will acquire a majority interest in Strike Capital, which owns and operates pipeline infrastructure services company Strike. The new organization will have an estimated value of $854 million and is expected to trade on the New York Stock Exchange under the name Strike.
- Strike LLC provides "full lifecycle" pipeline infrastructure construction, make-ready, testing, inspection, maintenance, repair, rehabilitation, upgrade, facility construction and reconnection services in major oil and natural gas markets. Between 2007 and 2017, Strike grew its annual revenue by more than 35% and projects 2018 revenue will be $1.8 billion.
- According to a Bloomberg opinion piece by Liam Denning, the Sentinel-Strike agreement represents an industry push to upgrade and repair existing pipelines, which is a Strike specialty. The deal is still subject to Sentinel shareholder approval.
Construction of pipelines, particularly those intended to transport natural gas, has increased as new resources open up and export demands rise. But pipelines are just one piece of the story. The rest is about the multibillion-dollar, construction job-creating facilities necessary to process and export these energy sources.
Just this month, LNG Canada announced that it had awarded U.S.-based Fluor Corp. and its Japanese joint venture partner, JGC Corp., $14 billion contract for the engineering, procurement, fabrication and construction of a liquefied natural gas export facility in Kitimat, British Columbia. The construction phase includes the building of two independent liquefaction units, or trains, with the possibility of expanding that number to four. Job creation is expected to reach approximately 4,500 workers, with an emphasis on local and regional hiring.
Facilities like LNG Canada's provide opportunities for contractor profits, but, recently, heavy hitters in the industry like Fluor and Bechtel told major developers that they need to be more realistic about costs and schedules when they are planning these massive projects. Favoring low bids over other factors like innovation and collaboration will continue to create cost overruns and delays, experts said at the Gastech Barcelona industry gathering.
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