Top executives at a Girard-based industrial construction company admit they didn’t fully appreciate how big the Utica Shale Play was going to be when they made a move several years ago to expand into the oil and gas industry.
But after receiving word in recent weeks that VEC Inc. landed the contract for post-drilling work at four new BP Utica Shale wells in Trumbull County, company executives are getting a taste of what’s about to come.
“They weren’t asking us if we can do the work. It was, ‘Where are you going to find the labor to do the amount of work we are going to do,’ ” said Jeff Barber, VEC vice president of the systems integrator division and one of the company’s three principals.
He expressed his excitement about the BP contract last week as he walked through one of several company facilities, a Hubbard fabrication plant.
“This is the first four wells (contracts) they are handing out, and they are thinking there will be 2,000 of them. They are all in Trumbull County. It’s going to be huge.”
Since VEC Inc. – formerly Valley Electrical Consolidated – acquired Evets Oil and Gas Construction Services in 2003 and then J.L. Allen Oil and Gas Fabrication Services in 2010, the company’s oil and gas revenue has grown from zero to more than $90 million last year.
Valley Electrical, founded in 1975, was purchased by current owner Rex Ferry in 1990, and became known as VEC Inc. in 2011.
BP’s projects are just a few of the oil and gas industry projects VEC has handled. The company also has contracted for large local projects like construction of Vallourec’s new Youngstown pipe mill and for Houston-based industry manufacturers like Exterran and Valerus that recently began operations in Youngstown.
The company doesn’t work solely in the Mahoning Valley, though. VEC also has done work, for example, in North Dakota’s Bakken Shale Play and government contract work on a U.S. aircraft fueling system at Guantanamo Bay Naval Base in Cuba.
The new BP contract will involve site development after the wells have been drilled and hydraulically fractured. The work includes setup for things like cleaning and filtering systems, separating the product into different hydrocarbons, compressing it and transporting it.
“It takes so much more than just drilling the well,” said Chris Jaskiewicz, VEC’s chief operating officer and newly named president. “That is just the beginning component to getting it to someone’s home.”
All that processing, construction and setup means jobs, and lots of them.
Since the early 2000s, internal employment at VEC alone has grown from about 20 to about 115 this year, not including skilled trade workers numbering from 300 to more than 700 depending on the status of projects.
First-year pipefitter apprentice Josh Chaney, a 2008 Hubbard High School graduate, took a few minutes away from welding pipes inside the company’s Hubbard facility last week to talk about his plans for the future.
“I knew there was a big demand for it right now,” Chaney said. So big, in fact, that it helped sway his decision to leave classes at Youngstown State University where he had been studying business management.
“I was more of a hands-on person,” Chaney said, realizing that college isn’t for everyone. Now he is hoping to work toward becoming a welding inspector.
Jaskiewicz described the work as high-skill and good paying.
“They are high-paying jobs with great benefits, but also highly skilled,” he said. “Internally, we continue to grow.”
Jason Paisley of Howland, shop foreman at the Hubbard facility, said the company and the work has been good for the area.
“I do know that everyone who works here likes it,” he said. “The oil and gas business has been great for us.”
Work in VEC’s Hubbard facility where Chaney and Paisley work focuses heavily on pipeline fabrication for mineral transport. VEC purchased the 16,000-square-foot run-down structure that had stood empty on Erie Street in Hubbard since the 1980s with plans to use it for fabrication of pipelines and other gas industry machinery.
“As soon as we announced we were going to be a mechanical contractor, we had no problem getting work,” Jaskiewicz said.
In fact, the idea was so successful, that plans already are being laid for a $1.5 million, 20,000-square-foot addition to the building expected to be in operation within six months, Barber said. He noted that the new building is being positioned to accommodate the possibility of more additions.
“We are a company of faith, and the stars have aligned for us,” Jaskiewicz said.