Why would pipeline construction companies choose to buy certain machinery and equipment, and hire other machinery/ equipment?

Pipeline companies usually purchase specialised pipeline equipment such as trenchers, benders, pipelayers and padders, and hire in non-specialist equipment such as general earthmoving and rubber-tyred equipment that is easily sourced from the local market.

The economic rationale for externally hiring some equipment is to ensure that not all Nacap’s capital is tied up in non-specialist machinery and Nacap’s CAPEX budgets can be allocated to specialist pipeline gear which supports our business plan. This provides flexibility as we can hire small equipment for small diameter projects or large machines for large diameter projects. The reason for external hire for earthmoving is that the projects executed by Nacap are so diverse; the projects change in size, diameter and complexity. For example, if we purchase a fleet of 45t excavators and D8 dozers and end up winning a 20 km long, 6inch diameter gas line, the machinery costs do not stack up, so it is more economical to have fleet choices when you hire machines for projects.

What kind of specialised equipment would be purchased instead of hired for projects? Where would it be purchased from?

These days the timelines required to mobilise pipeline projects are increasingly fast-tracked, and the expectation of Nacap and our clients is to have a well-maintained, modern, specialist pipeline fleet ready to go at short notice. This means not only purchasing pipeline equipment for our targeted projects in advance but also committing to our plant maintenance program to refurbish our equipment immediately at completion of our projects. The specialised equipment that Nacap would purchase for our projects includes welding equipment, tac rigs, tie-in rigs, grit blasting equipment, pipe benders, clamps, mechanical padders, chain and saw trenching equipment, hydrostatic testing spreads, and pipelayers. This equipment would be purchased mostly from the United States and Europe. Most of the large pipeline equipment manufacturers have Australian agents now, which makes it easier.

What kinds of equipment can be easily sourced from Australian manufacturers for hire? Who would it be hired from?

The equipment easily sourced from Australian suppliers includes excavators, dozers, graders, trucks and light vehicles. We would hire from CAT Rental, Coates Hire, PPH, Dun Drums, NationWide Hire, Sargent, ALS, Renfreys, Toowoomba Trenching, Trenching Systems Australia and Aitkin Crane Hire. Nacap acknowledges that it is important to maintain a very strong relationship with these equipment providers so we ensure that their plant maintenance, safety culture and logistics planning dovetail into Nacap’s Plant Management System and Plant Assessment criteria. On our projects we treat these organisations like partners, and this means that they are keen to support us in any way they can and they become integrated into our project execution team. We treat all this gear as Nacap’s gear because on remote projects we cannot create a culture of “us and them”. Our equipment partners and Nacap all work to ensure that the plant is safe and ready to go each day.

On the Wonthaggi Desalination Pipeline project, what equipment has Nacap hired and what equipment has it purchased, if any?

On the Wonthaggi Desalination Pipeline Joint Venture (with our partners Thiess and Degremont), we purchased welding equipment, small gensets, compressors, pumps, trench shields and accessories. We also supported this project with our large 594 Pipelayers from our European fleet, and these machines are now positioned in Australia. In terms of external equipment, we hired excavators, dozers, graders, tipper trucks, water trucks, road sweepers, compaction equipment, float and light vehicles, and numerous other vehicles on short term or day hire.

On the QSN 3 Project?

On the QSN 3 Project, the equipment hired includes dozers, graders, excavators, heavy vehicles and light vehicles. Given the size of this project, prior to mobilisation Nacap committed to a significant CAPEX program and purchased trenchers, pipelayers, padding machines, welding equipment, compressors, pumps and a vacuum pot-holing machine. The QSN 3 project has a world-class fleet of modern pipeline equipment.

On the Wareena flowlines project for Santos?

On the Wareena Project, in line with our philosophy, we hired general earthmoving equipment such as excavators, graders, trucks, light vehicles etc. Nacap purchased small pumps, gensets and small tools and grit blasting equipment. As our padding fleet was committed on QSN 3 we also externally hired in a mechanical padding machine. We also sent a new low ground pressure PL61 Caterpillar pipelayer to site, however this machine was in our stock and not purchased specifically for that project.

How does Nacap decide what approach is taken for using purchased or hired equipment for different projects?

Nacap would consider the size of the project and the timeline, purchasing only specialised equipment for the project and hiring any other required equipment.

Does Nacap Australia share equipment with its Dutch head office?

Nacap Australia has bought equipment into the country from Holland, mainly large diameter pipelayers and bending machines. This was initiated due to particular machines not being available in Australia and there was a surplus available in Holland. Worldwide, Nacap owns approximately 200 pipelayers as well as fleets of other specialised pipeline equipment items. Accordingly, no job is too large for our pipeline equipment capability (nor too small).

Does Nacap lease any of its own equipment out in Australia?

Nacap has, on occasion, hired equipment out in the past, usually to friendly pipeline contractors who require a machine for a short term project or to fill in a gap when they are short for some reason. Nacap does not actively chase the hiring of our machines, but if the right project needed our assistance and we were approached, we would consider hiring our equipment if the machines were not already committed to our own projects.