Mullen Group Banks On TMX And LNG Projects
Mullen Group Ltd. is anticipating a steady stream of revenue tied to its pipeline business thanks to the TMX expansion and the buildout of LNG projects on Canada’s west coast.
Chief executive officer Murray Mullen said its subsidiary Premay Pipeline Hauling LP has been having a good year in the big diameter inch pipeline space with notable contracts such as the Trans Mountain pipeline expansion project.
Positioning pipe for a few major pipeline projects kept the pipeline company active in the quarter, said Mullen.
“In fact, one of our biggest customers last quarter was the federal government,” said Mullen. “As the owner of the Trans Mountain pipeline, they just keep spending money, which is good for us.… The bottom line is this as it relates to pipelines, if pipelines are being built that will eventually provide the infrastructure needed to support the oil and natural gas industry.”
Mullen added that the biggest projects and revenue sources are clearly related to the planned LNG Canada and the Coastal GasLink projects.
Through its two segments that are tied to transportation and drilling, the group is in the early stages of what could be a multi-year run working on the upcoming LNG projects, said Mullen.
“Eventually drilling will come back,” he said. “I don’t see it coming back in 2020 but it will come back, because once, you know, once you build $40-billion [LNG] plants, you got to feed it.”
The good news is the infrastructure is being built right now but the negative news is, it takes time to build it out, he added.
Mullen said the economy will improve and eventually drilling will come back and the activity will be tied to natural gas.
“Because we’ve debated and debated and debated as Canadians for so long, we still have a few years in our estimations before the drilling activity kicks in,” he said. “More pain on drilling but in our diversified model, we will be busy in other areas.”
- Mullen Group Ltd.
- Canada — B.C. LNG