Enerflex to exit EPC construction

Lower exploration and construction activity in the energy sector has led Canada-based contractor Enerflex to exit the Australian engineering, procurement and construction market, with most of its Perth operations to be made redundant, Business News understands.

The company made the announcement on Friday January 11, with president (international) Phil Pyle saying in a letter to clients that the uncertainty in the energy market driven by the lower oil price had contributed to the decision.

“Enerflex has decided to exit the EPC construction market and will be winding down all activity in this area during the coming months as projects come to a close,” Mr Pyle said in the document.

“As part of this directional change, Enerflex will be increasing its capacity to undertake core business, including equipment supply, product support, turnkey/integrated projects, optimization/upgrades and general asset management, these works will continue to be conducted from our facilities across Australia and Asia.”

Representatives of Enerflex had not responded to requests for comment at the time of publication.

The company had previously worked on various Australian projects including the Santos GLNG in Queensland, to which it supplied 70 LNG screw compressors, and at the APA compression facility in Moomba.

For the 2014 calendar year, the most recent for which financial data was available, about $C200 million ($200 million) of the company’s $C1.8 billion revenue was from the Australian market.

At that point, Enerflex had about 470 employees in Australia, according to its annual report.

It comes as global LNG construction appears to come off a peak in 2015, and in Western Australia specifically, four major projects are passed the halfway mark towards completion.

The largest, the Chevron Gorgon project, commenced cool-down of its LNG storage facilities last week.

Enerflex has previously sponsored the Step up for MS challenge with the Multiple Sclerosis Society of WA.

It is not known if this relationship will continue.

Two executives formerly involved with Enerflex had previously moved to local company Valmec, including Kelvin Andrijich as head of marketing and product development last year.

Managing director Steve Dropulich previously served as local managing director of Enerflex, while two board members that had founded the HVAC/HPS Group of Companies, which was acquired by Enerflex, also hold senior positions.