U.S.-based construction company Civeo has pulled out of a joint venture partnership with Bird Construction to build LNG Canada鈥檚 massive worker accommodation camp in Kitimat.
The announcement of the dissolution of the partnership between Civeo and Mississauga-based Bird Construction was made on Monday, December 3, at 6 p.m Eastern Time.
In its place, and also announced Dec. 3, is a new partnership between Bird and Calgary-based ATCO Structures to complete the construction of the 4,500-bed Cedar Valley Lodge, situated on Rio Tinto land adjacent to its smelter.
Civeo investor relations manager Regan Nielsen said the decision by the Texas-based company to dissolve its partnership with Bird partly came about as a result of the delayed LNG Canada Final Investment Decision in 2016 and 鈥渁 changing market backdrop鈥�, coupled with a strategic decision by Civeo to begin outsourcing the manufacturing of accommodation units.
鈥淎s a result, Civeo felt it was in its best commercial interest, as well as the best interest of LNG Canada and its partner, to no longer participate in the Bird-Civeo Joint Venture,鈥� said Nielsen. 鈥淭his decision aligns with Civeo鈥檚 sourcing strategy in its U.S. and Australian operations.鈥�
Nielsen said the outsourcing of the construction of its accommodation units ties in with Civeo鈥檚 decision to close its manufacturing plant in Alberta.
鈥淐iveo has since, with the consent of Bird, LNG Canada and [Fluor], elected to exit its participation in Bird-Civeo JV,鈥� said Nielsen.
鈥淏ird, the managing partner of the Bird-Civeo JV, continues to lead the design and construction of the Cedar Valley Lodge and has entered into a joint venture with ATCO Structures LNG Limited Partnership, which is now a party to the novated contract.鈥�
Novation, in contract law and business law, is the act of 鈥渞eplacing an obligation to perform with another obligation, or adding an obligation to perform, or replacing a party to an agreement with a new party.鈥�
https://www.northernsentinel.com/news/kitimat-gets-first-look-at-lng-canada-timeline/
Nielsen said Civeo was primarily focused on the modular aspect of the build and Bird on the site construction.
鈥淲e have no remaining contractual or financial obligations to Bird. There was no financial impact to Civeo related to winding up the [joint venture],鈥� said Nielsen.
Bird and Civeo formed the Bird-Civeo Joint Venture in 2015 to bid for the Cedar Valley Lodge project. In May 2016 LNG Canada announced the Bird-Civeo partnership would be responsible for the Lodge鈥檚 engineering, procurement and construction (EPC).
They were handed a limited notice to proceed pending the LNG Canada FID announcement.
ATCO鈥檚 chair and CEO Nancy Southern said in a statement released late on Monday that the Bird-ATCO Joint Venture would supply the 4,500 rooms for the lodge through an existing joint venture between ATCO and the Haisla Nation.
鈥淭he project is one of the largest accommodation facilities ever built in Canada and will provide high-quality amenities for the LNG Canada workforce,鈥� reads the statement.
Southern said ATCO has executed several operational support services contracts and modular site accommodation projects within the Kitimat region.
鈥淪ince 2011, the company has operated a successful joint-venture partnership with the Haisla Nation, which will also benefit from the Cedar Valley Lodge project.
鈥淥ur long history of delivering major workforce housing projects throughout the world continues to position us well to support landmark infrastructure development in the years ahead,鈥� said Southern.
In 2016, ATCO completed construction of a 1,600 person workforce housing facility for BC Hydro鈥檚 Site C project. The company has also delivered major workforce accommodations for customers throughout the world, including Canada, the U.S., South America, the Middle East and Africa.
https://www.northernsentinel.com/news/camp-contract-awarded-by-lng-canada/
Civeo CEO and director Bradley Dodson said the company was proud of the work that the Bird-Civeo joint venture had completed on the lodge.
鈥淲e look forward to continuing to be a partner to LNG Canada through our Sitka Lodge [in Kitimat] and our mobile camps supporting the Coastal GasLink Pipeline Project,鈥� said Dodson.
Early last month Civeo announced it was expanding its 646-room Sitka Lodge to approximately 1,100 rooms to provide housing for an initial LNG Canada construction workforce and for workers building the western-most section of the Coastal GasLink pipeline.
