Bonatti, a world leader in pipelines construction, has been operating in Canada since 2014, supporting the Canadian infrastructure program thanks to advanced approach and technologies.
In this interview with the Centro Studi Italia Canada, Giulio Galleri, Chief Executive Officer at Bonatti Canada, introduces us to the Bonatti projects in Canada, the company’s "people made" vision and its cooperation with local players.
Giulio Galleri, Canada Country Manager at Bonatti
What does Bonatti do in Canada and how are you structured in the country?
Bonatti officially established itself in Canada in 2014 to participate in the construction of the large pipelines that are under development in the country and to evaluate the possibility of contributing to the Canadian infrastructure growth through its other lines of business.
We are present in Canada with two companies, both wholly owned by Bonatti S.p.A., but with different operating methods: Bonatti Canada Construction and Pacific Atlantic Pipeline Construction.
We chose to operate on two different fronts due to the complexities of the projects and the operating conditions. The decision was made with the goal of maintaining a flexible approach to the Canadian labor market.
Although Bonatti is a full-service EPC contractor (Engineering-Procurement-Constructor) in the rest of the world, at the moment in Canada the primary business model is projetc construction due to market and client needs. This operating structure has proven to be compatible to meet the needs of some large North American companies with whom we have established important alliances.
Could you talk more about these alliances?
Since 2014, Bonatti has worked hard to establish strong ties with this country and with the many forces involved in the projects.
Canada is a multicultural country, but it has its own strong identity. The industry is generally very regulated, so to act alone in this context is unthinkable.
I must add that another fundamental characteristic of our company is its adaptability to the context in which it operates and its ability to integrate with different cultures and people (it's not by chance that one of our slogans is “people-made").
At the beginning, although Bonatti was one of the world leaders in the construction of large pipelines, it sought out alliances with North American players to explore initiatives that were difficult to partecipate in for those not well established in this part of the world. The second objective was to exploit possible operational synergies. In this area, various collaborations were born and some of them translated into concrete projects.
Between 2019 and the end of 2020, Bonatti and Stantec, a successful Canadian engineering company with a worldwide presence joined together to provide project management services.
The engineering and management skills of a major company
, like Stantec, and Bonatti's experience in the construction of complex pipelines combined a unique set of skills and have been an encouraging example of multicultural (in the sense of corporate culture) and professional integration.
Between 2020 and today, we have developed a true strategic alliance with Kiewit, an American company that is on the Forbes 500 list of American construction companies.
Kiewit and Bonatti have explored a number of commercial initiatives both inside and outside the pipeline arena. A general partnership has been established to pursue opportunities and build the most difficult and most important Canadian and, arguably, North American pipelines being developed today. Someof these projects are still in development.
It is another nice challenge …
On that note, what projects are you currently working on in Canada?
Bonatti is currently engaged in the construction of significant portions of two major projects of national interest, the Coastal GasLink and the TransMountain, for an order book exceeding $1 billion. The Coastal GasLink pipeline is part of largest industrial project ever in Canada together wirth a gas liquefaction plant near the city of KitimatBritish Columbia, being built by LNG Canada, a consortium led by Shell. The project involves the construction of a 670 km-long 48-inch pipeline, operated by TC Energy, that will transport natural gas from northeast British Columbia to the liquefaction plant.
Through its subsidiary, Pacific Atlantic Pipeline Construction, Bonatti was initially awarded a contract for the construction and testing of sections 6 and 7, covering a distance of 165 km, and was subsequently awarded the contract for section 5, which is 82 km long.
Bonatti is building more than a third of the entire project (247 km) through the use of an industrial chain that integrates Canadian and Italian (or international) companies. The project will employ well over a thousand people (international specialists plus an overwhelming majority of Canadian personnel). Priority will be given to indigenous and local people for employment and business opportunities.
Undoubtedly, Bonatti's experience, its fleet of equipment (with the Safe-T-Rex sidebooms that are capable of lifting and laying 130 tons), and its automatic welding technology were determining factors in the awarding of this project, which is about to start again after a COVID related suspension.
The other major Canadian project is the expansion of the Trans Mountain pipeline, operated by Trans Mountain Corporation, a subsidiary of the Canada Development Investment Corporation.
It is a pipeline system that transports petroleum products between the provinces of Alberta and British Columbia for local use and export. The system starts at the Trans Mountain terminal in Edmonton (Alberta) and goes all the way to the storage tanks that are located in Burnaby (British Columbia). The transport of the product then continues locally (for domestic consumption) and to the Westridge Marine Terminal (for export to other countries). This new pipeline
will run alongside the existing 1,150 km of pipeline and provide a significant increase in capacity.
As I mentioned earlier, Bonatti will tackle this newly awarded project in partnership with Kiewit. I can say that it will be a great challenge. We are talking about 84 km of 36 inch pipeline in an area of Canada that is extremely difficult due to the type of terrain. This section of the project, which starts from Coquihalla Summit and arrives near Popkum (British Columbia), will pass through steep mountains and extreme slopes and will require the use of special techniques and construction methods. Bonatti’s share of the work alone will require the use of a dedicated fleet of equipment and employ several hundred people. Priority will be given to indigenous and local people in this project as well.
We can certainly say that Bonatti is now a reference in Canada in the field of pipeline construction and, possibly, oil & gas plant engineering. But, let's dwell for a moment on the human component, that "people made" you mentioned earlier. How are things going from that point of view?
Canada is different from international countries where companies like ours have been operating for decades.
It has a very regulated and truly multicultural system that requires being aware of and
—at the same time —managing a multitude of different issues, approaches, and cultural aspects.
This is still a new environment for us. We are discovering new things even years after our arrival. The integration between the expatriate staff and the Canadian staff is certainly one of the most interesting challenges and will be key to Bonatti's success in the country.
The key point for our company will be to suceed in combining the typical elements of the two cultures involved. Our international staff are used to working in a flexible labour market wheras the Canadian market is more structured with strong labour agreements.
I believe that these aspects can be reconciled and that we are doing well, as we leverage the leadership of our long term and most qualified technical staff, whilw relyng for the most part on our Canadian colleagues new to the company who will be our most valuable assets in our success in Canada.
There is no shortage of difficult times but our company has demonstrated the ability to follow, and anticipate, learning curves in these contexts. For this reason, I truly believe that the challenge is being meet even if it is not easy.
Bonatti also won the Italy-Canada 2021 Award, part of the ICCO Air Canada Business Excellence Awards.
It's true. We make great efforts to reduce the distance between the two cultures and we try to bring them closer together, hoping to succeed more and more in this endeavor. After all, our Italian experience and flexibility are key factors to our success.
Speaking of Italian ductility, is there anything else you are considering with respect to your "core business"? In the opening, you mentioned Bonatti's other lines of business.
Yes, there is. We have a business development activity that is, by now, well structured. The impression we have gained is that Canada is a country with a peculiar business dynamic. It may appear at times to be “asleep" but then, suddenly, it wakes up. The development of the infrastructure has not been homogeneous. It proceeds "in waves." We have intercepted a recent wave and, hopefully, more will come soon.
The present opportunities are particularly in the field of natural gas, because Canadian natural gas is some of the least expensive in all of North America.
All of this implies that, in order to cope with the fluctuations of this market, it is necessary to diversify our offering to maintain stability during the "waves" of the active periods I was talking about. When it comes to oil & gas in general, it is common knowledge that upstream and downstream alternate cyclically. So, as far as Bonatti's business is concerned, when the current wave of large pipelines in Canada is completed, the time will come to upgrade and manage existing facilities.
Bonatti offers services for operation and maintenance of existing facilities, construction of various types of plants, multiphase pump services, etc. In Canada there is an opportunity or market, for all these services. Being able to intercept these opportunities, when the construction phase of large pipelines is down, will become the necessary condition to maintain stability and, therefore, maintain our presence during the fluctuations of this market.
So, what is the space for Italian companies in this type of market?
I believe that what Bonatti—but also other players in the sector— are doing at the moment confirms the concrete opportunity for Italian companies to operate permanently in Canada. As far as our business is concerned, right now the best opportunities are in the western provinces (Alberta and British Columbia).
There are, certainly, exogenous factors that dictate the dynamics of this market. Just think, of course, of the price of oil or the demand for gas that Asian countries will have in the coming years. There are various analyses on this subject, which I think are really competent. We have to take into consideration, however, also the personnel costs, which is a peculiarity of Canada, where salary standards are quite high. If, in this country, the personnel costs of pipeline construction —and all the associated equipment— can be kept at a competitive level, Canada will become a major world player, at least as far as gas is concerned.
Opportunities to develop liquefied natural gas (or LNG) projects are opening up on both the east and west coasts of the country. If investments in this direction are decided, we should be ready to take advantage of them.
If we consider Canada as a business place in a more general sense, I think the need for infrastructure development will grow steadily in the coming years. Therefore, I believe there is room for Italian companies.
We believe so too. In closing, have you also thought about renewable energy?
Certainly. Bonatti is already moving in this direction and I believe that Canada (the whole of North America, to tell the truth) could be a very interesting market.
The size and stability of this geographical area, together with the environmental and climatic variety, could really allow a significant diversification of energy production and constitute a useful demand for the creation of the necessary infrastructure.
Canada offers room for the exploitation of multiple renewable sources, from the power of sea waves to solar energy (and yes, there is occasionally sunshine in Canada), to biomass. For this reason, I believe there is a lot of potential.
Based on these considerations, Bonatti Canada is exploring strategic alliances with a number of green companies in the hope of making a contribution in this area as well.
Don’t want to miss the updates of the Centro Studi Italia-Canada?
Sign up to our Newsletter