Effective Use of an Alliance to Deliver Pipeline Maintenance Services

Pipeline companies face a difficult task in cost-effectively managing pipeline maintenance activities. Complexity is introduced due to geographical expanse, remote locations, access to qualified contractors and the desire to hire locally, and contract management of available suppliers. Pipeline companies have traditionally provided maintenance activities through in-house resourcing, or management of a multitude of available contractors. With increasing efforts to focus in-house resources on core pipeline operations, there has been a corresponding shift in moving noncore maintenance activities to outside providers. This has introduced an increase in administration costs associated with supplier qualification activities, document management and payment processing. TransCanada PipeLines Limited has developed a model where core skills have been retained to perform critical activities in-house and less essential services have been contracted out, along with the management of the subcontracts. This model relies on a central dispatch service along with a large base of subcontractors strategically located along our pipeline system to provide these services. The process involves two basic steps — managing subcontractors and performing work. Managing subcontractors is the key to the process. This part of the process proactively provides TransCanada with qualified subcontractors at the right place, the right time and for the best price. This paper will discuss the alliance model we’ve implemented in conjunction with Ledcor Industrial Maintenance Ltd. for contracted services and how this arrangement is crucial to our success in managing maintenance activities cost effectively. We will describe the model, how it was developed and implemented, how it works and some of the benefits that make it a successful contribution to regional operations. We will also discuss some of the key lessons learned. Further details on the process will be presented, along with the bottom-line benefits associated with this type of relationship.