Industry Spotlight

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Interface Consulting Insight

Fire Rebuilds Stoke Flames of Claims if Not Handled Appropriately

Christopher J. Sullivan, Interface Consulting International, Inc.

"Today’s refining, chemical, petrochemical, and heavy industrial facilities process and utilize hazardous chemicals, and despite the best laid plans and procedures, accidents do happen."

"...Heeding some lessons learned during the rebuild process can help minimize the opportunities for claims and disputes following a fire or explosion."

"...First and foremost, safety of all personnel should drive all responses...."

Construction Disputes

Sewer fight: King Co., contractor squabble over $48 million

Seattle Post-Intelligencer

"Change order requests by the joint venture...ask for additional payments for the companies' work on the central portion of a 13-mile tunnel that will carry wastewater from the treatment plant to Puget Sound."

"Claim[s] of this type routinely occur in major construction projects, but...the amount in this case is unusually high given the venture's original $211-million contract price...."

"The company...repeatedly blames unforeseen circumstances such as variations in soil type for slowdowns in the tunnel drilling and the added expense of keeping it moving...."

Construction groups sue over state payment halt

Crain's New York Business

"A coalition of trade associations...has filed a lawsuit against the state over Gov. David Paterson's decision to unilaterally halt payments for hundreds of state construction projects...."

"...the suit alleges that contractors who work on roads and bridges must either work with no guarantee of pay, or stop work. Those who stop are cited for breach of contract and become ineligible to bid on future work."

"The suit is demanding that the state either offer assurances that contractors will be paid, or agree not to cite those who stop working with breach of contract."

Construction Delays

Construction work on Olkiluoto III nuclear reactor to experience further major delays

Helsingin Sanomat

"The construction of Finland's fifth commercial nuclear reactor...has been delayed once again. Even so, the French installation company Areva stands its ground, maintaining that the new reactor will generate electricity from the summer of 2012."

"A number of experts in various fields have estimated that the completion of the nuclear reactor project in 2012 will be 'challenging'...to say the very least."

"'It looks likely that the installation of primary components will start in June. The installation is to start from the reactor and the pressure vessel, after which come the steam generators,'...."

Federal complex in Greenville estimated to cost $70 million

The State

"The estimate...is the first appraisal offered to the public since three years ago when the government agency charged with construction...expressed public concern that the cost had doubled because of repeated delays over the past decade."

"...the congressman's office contacted GSA's business department and received the estimate of $70 million plus 10 percent to 20 percent in added costs for design, maintenance and inspection."

"The project has been in the works since 2001, when it was announced that construction should be complete by 2007."

Construction Management

Long Beach Airport modernization on track

The Mercury News

"After years of delay brought on by political and legal wrangling, work is under way on a $136-million, multiyear modernization project at Long Beach Airport, the facility's first redevelopment in decades."

"Upgrades to runways, aircraft parking pads and the main terminal will occur throughout the three-year construction period, with all work expected to be complete by mid to late-2013."

"During the years of delay, airport officials banked tens of millions to cover future construction costs...."

Agreement reached on light rail line in Minn.

The Associated Press

"The agreement would allow preparatory work, including building sidewalks, retaining walls and installing traffic signals, to start this summer. When completed, the rail line will...connect the downtowns of Minneapolis and St. Paul."

"'It's been a long and torturous process, but we hope this is the big hurdle,'...delays could have raised the project's cost by $1 million when an unexpectedly low construction bid expired."

"Construction of the 11-mile line is planned to be complete by 2014 at a total cost of $957 million."

Construction Opportunities

Battle of Las Vegas arena projects proceeds

Las Vegas Review-Journal

"Two companies and a nonprofit group want to develop arenas with 20,000-plus seats for sports and other events. Two are proposed on the Strip, and one would be on the south Strip...."

"Texas-based IDM hopes to build the Silver State Arena there at an estimated cost of $750 million."

"...the complex...on the Harrah's site would be nonprofit...whereas the other arenas being proposed would be privately owned."

Port of Miami tunnel project on track for June start

The Miami Herald

"The tunnel is one of three transportation megaprojects under way in South Florida. The others are the $1.7 billion Miami Intermodal Center near Miami International Airport and the $1.8 billion reconstruction of Interstate 595 in Broward County."

"Once built, the tunnel will link the port for the first time to area expressways in a bid to speed cargo traffic and ease traffic congestion in downtown Miami."

"...Miami Access Tunnel plans to finish on time, as promised in the contract, on May 15, 2014. 'If we don't, we'll be penalized,'...."

AGRI: First Ever LNG Project in the Black Sea

Eurasia Daily Monitor

"Azerbaijan, Georgia, and Romanian [sic] are jointly launching a liquefied natural gas (LNG) project....as an element in the EU-planned Southern Corridor for Caspian gas to Europe."

"AGRI envisages transporting Azerbaijani gas by pipeline to Georgia's Black Sea coast, liquefying it there, shipping the liquefied product by tankers to Romania's coast, and delivering the re-gasified product into Romania's pipeline system and onward to EU territory."

"...AGRI is the first-ever LNG project in the Black Sea...."

Dominion announces natural gas project

The Associated Press

"Energy company Dominion Resources Inc. has announced a project to harvest, process and transport growing volumes of wet natural gas in West Virginia, Pennsylvania and Ohio...."

"The Marcellus Shale is a rock bed the size of Greece...beneath New York, Pennsylvania, West Virginia and Ohio. Geologists say it could become the most productive natural gas field in the U.S., capable of supplying the entire country's needs for up to two decades...."

"Most energy companies...believe stricter federal regulations for coal mining and emissions are coming. Utilities are swapping out coal-fired power plants for cleaner-burning natural gas turbines."

Industry Spotlight

Into the Deep: Exploring Offshore Oil Frontiers

Offshore drilling and its associated hazards have recently captured the public’s attention as a result of the April 20 Deepwater Horizon incident. Despite the safety and environmental risks, advances in technology and new political agendas have accelerated commercial interest in offshore drilling, especially in deep and ultra-deepwater locations. Read on to learn more about these emerging frontiers and the investigation into possible causes of the unfortunate incident.

Blazing a trail far out at sea

The Houston Chronicle

"After more than a decade of work, they began last month pumping oil at the massive floating [Perdido] facility, which sits in nearly 8,000 feet of water..., setting several records along the way."

"...more than a dozen big oil discoveries have been in made Lower Tertiary formations...in a 300-mile band on the outer edge of the U.S. Gulf between Texas and Louisiana."

"Perdido alone is capable of producing 100,000 barrels of oil and 200 million cubic feet of natural gas per day - enough to meet the energy needs for over 2 million households for a year."

New deepwater drilling rigs extend search for energy

The Houston Chronicle

"The $630 million vessel is one of a new wave of ultra-deepwater drilling rigs, leaving Asian shipyards now, that will again push the limits of what the offshore industry can do."

"... the Discoverer Inspiration is built to operate in waters up to 12,000 feet deep and drill wells an additional five miles below the sea floor...."

"Oil companies are demanding such rigs as they expand their search for oil and natural gas into deeper waters of mature basins like the Gulf of Mexico and eye emerging regions such as the Philippines and East Africa."

Apache to buy Mariner Energy for $2.7 billion

The Associated Press

"The acquisition makes Apache a major player in deepwater oil drilling - a business that's becoming increasingly attractive as oil prices rise above $85 a barrel....recent seismic tests also make it easier and cheaper to exploit rich petroleum deposits in the Gulf."

"The Apache acquisitions are the latest in a rush of billion-dollar energy deals....about $25.4 billion worth of petroleum exploration and production deals worldwide were announced in March. That's five times more than the previous two months combined."

"...Now that the economy is recovering, investors are increasingly blessing these deals with oil prices expected to rise in coming years...."

The spill in the Gulf of Mexico won't stop the deepwater scramble for oil

The Telegraph

"Deepwater Horizon, the Transocean rig that...caught fire causing the death of 11 workers and a growing environmental disaster, was not BP's deepest drilling prospect at 1,525 metres under the sea."

"...extreme measures to stem the spillage show just what kind of high risk and difficult conditions oil companies are working under to tap the world's remaining reserves."

"... 'It won't stop deepwater drilling. It's obvious that the world needs this stuff from these places and there are very few companies qualified to extract it,'...."

Failed Tool of 'Last Resort' Doomed Rig Workers, Allowed Spill

Bloomberg Businessweek

"A 2-foot-long metal clamp that failed to cut a pipe on the ocean floor may be to blame for the Deepwater Horizon catastrophe...."

"All subsea oil wells are equipped with steel blades known as shear rams that are supposed to slash through the pipe at the top of the well during dangerous pressure surges and close off the flow of crude...."

"The shear ram is part of...a blowout preventer that sits atop a well to reduce the force at which oil and gas travel to the surface from thousands of feet underground."

'Cementing' of rig's well eyed as possible culprit in blowout

The Houston Chronicle

"Investigators...raised concerns three years ago about oil rig blowouts associated with cementing wells, noting that accidents were continuing with regularity, most in the Gulf of Mexico."

"...the cause of [the] explosion on the Deepwater Horizon remains under investigation....At the time of the accident, crews were 'cementing,' or installing casing to secure the walls of the well."

"Cementing problems were associated with 18 of 39 blowouts between 1992 and 2006...."

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