The doors of a Regina-based energy industry business that first opened in 1961 will soon be shuttered.
Canadian-based Shawcor has announced that Shaw Pipe, which offers pipe coating solutions out of its north-Regina facility, is closing down amid a low project backlog.
“We saw that energy demand in the short term was reduced because of the COVID-19 pandemic. Producers are reducing their capital expenditures by about 40 to 50 per cent.” said Paul Pierroz, Shawcor senior vice president of corporate and investor relations. “We expect that demand to strengthen over the back half of the year. But overall we’re seeing an overcapacity of pipe coating capacity in the on-shore business for North America.”
“We felt that future work for the site was going to decrease. The industry is built for a certain level of demand and it’s dropped below that so now the supply is coming off the market.”
Pierroz said that in Saskatchewan, there are currently seven oil rigs and 14 natural gas rigs operating in Canada with just two of those located in Saskatchewan. He said that as recently as February there were 257 operating countrywide.
“Saskatchewan went from 72 drill rigs down to two. That really shows you the extent of the decline.”
Pierroz said that there were around 30 full-time employees working at Shaw Pipe at the time of the announcement but at its peak operations employed around 230 — a number the facility last saw in 2017.
“It was a multi-generational workforce, so some people’s parents were employed there as well,” Pierroz said, “so that made it a particularly tough decision and one that we didn’t take very lightly.”
Shaw Pipe’s main customer was the Evraz steel making mill.
Pierroz says a small team of employees will remain on-site to close out existing work projects.
He added Shawcor has intentions to market the site on which Shaw Pipe sits. Shawcor currently owns over 100 acres of land in the area.
He says Shawcor will continue operating pipe coating solutions out of its facilities in Alberta.