Sourcing pipeline equipment in the 1970s

The perilous tale of how some of Australia’s earliest pipeline building equipment arrived on our shores.

In the early 1970s, relatively few hydrocarbon pipelines had been built in Australia. Gas and Fuel Corporation had built an approximately 457 mm diameter pipeline from Morwell to Melbourne and had bought an old Crose cable-operated 152-762 mm bending machine for the project. It was the only bending machine in Australia at the time (it is still in operation today and is located in Western Australia, I believe) and there was little other pipeline equipment of any consequence.

When Carter Johnson’s company, Australian Pipeline Construction (a subsidiary of Woodhall), won an Esso contract to build a 711 mm diameter pipeline from Sale to Melbourne he needed a whole spread of gear, and quickly.

One evening my wife Maureen and I were heading to a wine tasting fundraiser that she had organised as president of a ladies club. As we were halfway out the door the phone rang. It was Carter asking me to drop everything and come down to his office in Dandenong. At the time I was working for Mole Engineering, which was the dealer for CRC-Crose equipment in Australia. I had grown to know Carter pretty well and, as far as was possible, we were friends. I did some quick side-stepping and agreed to be at his office around 11pm that evening. After I had duly returned Maureen home from the fundraiser I picked up a six pack of beer and a bottle of scotch and headed to Dandenong.

When I arrived at Carter’s office he had a spreadsheet on his desk with every item of equipment he would need to build the pipeline from Sale to Melbourne. As he poured a CC and water (not much water) he pointed to the sheet and said, “Take a look and tell me what you can supply off of that list.”

It was around midnight so I called my good friend CRC-Crose International Vice President of Sales Ben Montgomery in Houston and got the nod as to pretty good availability on all the equipment. When I told Carter that I could get all of the equipment he told me to get it out here as quickly as possible by sea freight – no quotes, freight estimates and all that jazz. I guess the contract may have allowed bonuses for early completion and possibly damages for late completion.

The order included a couple of bending machines, road borers, lots of auger in various sizes, rock and earth cutting heads, bending mandrels, air clamps, preheaters, dope kettles, lowering-in belts, pipe cradles, welding electrodes and other accessory items. By today’s standards, it was about $3 million dollars worth of equipment. It was the best order I had ever taken and it even impressed the Americans. Carter knew Lincoln had a plant in Australia but wanted to have the American rods for insurance.

I left Carter’s office at about 4am. His bottle was empty, my six pack was empty and all of the paperwork was done. Later that day acknowledgements were passed over, customs and shipping work was done, and funding was guaranteed – life seemed pretty good. Two days later my telephone rang. It was my insurance broker Johnny Burton. He said he needed to see me.

This was not an unusual request as we played snooker at the RACV club at least once a week. On this occasion, however, he asked me to join him for lunch at the Tankerville Arms – one of his many favourite eateries in Fitzroy. After a couple of aperitifs Johnny said. “Did you see this morning’s paper?”

I shook my head. He continued. “Your cargo is on the African Star out of New Orleans.”

“Fine,” I replied. “When is she due into Melbourne?”

“Not for a while,” he replied. “She’s on fire at the mouth of the Mississippi.”

“Hell,” I replied. “Better get our cargo out of it and get it on the next boat. We could road the stuff to Galveston or even to the west coast. Those Hotshot trucks run across there all the time.”

“Sure,” said Johnny. “But the ship hasn’t been assessed as yet. All we know is that the cargo is in one of the forward holds and we have no idea of its condition.”

“I need to know desperately when that freight will move,” I said.

“There’s an even worse consideration,” said John. “Your cargo is only insured for $200,000.”

I couldn’t believe it. “What? We sent you the documents as always and you knew the value of the freight,” I said.

“Yeah,” said John. “But the actual value vastly exceeds your maximum bottom.”

Since I had never heard this descriptive prose previously, I returned my eating utensils to the tablecloth, lit a cigarette, leaned back and said, “John, stop stuffing around. Where are we at?”

“˜Well,” said John. “As brokers for Lloyds, we are obliged to keep their records precisely accurate as to their day-by-day exposure to risk. Each client has a maximum bottom, which is the value of any single shipment. If it is a write-off you are in the can for the balance of the insurance.”

I told John that I had to make a phone call. I called Carter and gave him as much information as I had. I couldn’t mention this maximum bottom stuff. He either wouldn’t understand it or would refuse to hear it anyway. He said, “Don’t you worry Keith. Just call Houston and tell them to duplicate the order on the next ship.”

I had a fair amount of stroke but not that much! I called my boss Mole Engineering General Manager Lloyd Rees in Sydney. His first comment was “Hey Fitz. Is this fair dinkum?”

“You betcha,” I replied.

So he contacted Woodhall CEO Colonel George Noe (Ret. United States Army) and came back to me.

“George is halfway up the wall. Duplicate nothing,” he said.

“What about Carter?” I asked

“Stall him,” Lloyd replied. “And contact Houston for an update.”

I called Ben Montgomery in Houston who said, “It looks like we may be able to get into the appropriate hold within a few days. I’ll let you know then. In the meantime don’t worry. He can always declare “˜force majeure’.”

“Well Ben, there’s other problems,” I explained. “Our insurance seems to be in some kind of jeopardy because of a limit on our shipping bottom value status.”

“Hang on,” he said.

Ben used one of his several desk phones and called in the controller. After a while he came back to me.

“Keith are you there? Listen, old friend, we here at CRC-Crose never ship anything, anywhere without it being fully insured until the client settles for it. We’ve been caught too many times with these insurance people.”

The upshot was the original freight was recovered and shipped. It arrived a few weeks late but was in good shape and everybody’s blood pressure returned to normal. Carter and I have remained good friends. He gave me his business and he got the squarest deal possible. It was his philosophy to never ask a trusted supplier for a quote and in my case it paid off in spades.

The pipeline equipment was later sold at auction and some of it still builds pipelines today.

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