Mexico’s gas pipeline boom creates O&M engineers gap
Mexico’s mid-stream gas expansion will require a new wave of specialized professionals in the coming years to guarantee long-term maintenance and security of operations as the national energy reform progresses, according to industry consultants.
While Mexico's expanding mid-stream pipeline sector is currently flush with heavy construction workers, significant training programs will be required for them to apply their skill base to Mexico’s gas infrastructure boom.
Mexico currently has 19 pipeline projects, both domestic and trans-border, under construction or in some stage of bidding, accounting for more than US$ 10 billion in investment projected through 2018, according to the country's Federal Electricity Commission.
Besides ramping up its domestic gas production, Mexico plans to import 9 billion cubic feet per day (Bcf/d) of natural gas via pipelines from the US under a five-year plan (2015-2019) announced by Mexico’s energy minister in mid-October, up from 2.7 Bcf/d on average in 2015.
Construction of Mexico's planned pipelines will drive demand for trained labor in the mid-stream sector to a peak of 7,745 in 2016, compared to about 5,830 in 2015 and 4,830 in 2017, according to a recent study prepared by Deloitte Consulting Group for Mexico's Ministry of Energy (Sener).
Overall workforce demand will decline once pipelines start operating in 2017 and 2018 if plans for more pipelines aren't announced in the meantime. But this transition will spark new demand for a highly specialized workforce to support long-term operations and maintenance.
In the next decade, Mexico's mid-stream sector will need more specialists like pipeline engineers, electrical engineers, electrical technicians, process engineers and terminal operators able to implement guidelines for security and maintenance, according to Deloitte.
Preparing for growth
While the Mexican mid-stream industry is meeting most of its current manpower needs, simultaneous projects in other energy sectors as the country’s reform ramps up could create a more heated labor market, prompting companies to find new approaches for attracting and training workers.
João Nunes, executive director with recruitment company Michael Page in Mexico, said the oil and gas sector doesn't currently face a big workforce shortage. He said pipeline construction workers can be recruited from other infrastructure sectors and trained by engineering firms leading the projects.
"We cannot speak of a talent shortage (in the current market) because there is also no big demand for work," he said, referring to the impact lower oil prices have had in reducing the pace of new project investment.
Beatriz C. Maney, managing director at OFSCap LLC, an energy sector investment bank based in Houston, said Mexico has highly qualified engineers, and that an eventual lack of expertise by Mexican companies in the mid-stream sector is being solved through partnerships with international companies already working in pipeline construction.
“They are bringing experience and money. This is a win-win situation,” she said.
The vast majority of construction workers hired for new pipeline projects in Mexico have been sourced domestically within the past year. For example, about 96% of the workforce on Los Ramones II-Norte is Mexican.
But tight deadlines on that project have forced Odebrecht to source some laborers from abroad, Gordilho told FC Gas Intelligence.
Welders experienced in automatic welding, heavy equipment operators that know mountainous terrain and some supervisory positions on Los Ramones II-Norte were filled by foreigners from 15 different countries, Gordilho said. Specializations like side boom operators and some industrial assembly functions for the pipeline's two compressor stations were notably difficult to fill in Mexico, he added.
“The Mexican workforce is skilled and experienced,” said Luiz Gordilho, contract director for Brazil’s Odebrecht Infrastructure, which is building the Los Ramones II-Norte pipeline together with Mexico's Arendal and Italian-Argentine engineers the Techint Group. “(But) to meet current demand with simultaneous projects from the energy reform, the country will need to extend and strengthen training of skilled [craft construction] workers.”
Odebrecht has provided ongoing training for workers during the construction of Los Ramones II-Norte, especially welders and heavy equipment operators. Seventy occupational safety technicians had to take outside training at a local university, through a partnership the company formed.
Oil and gas companies developing projects in Mexico have already begun taking workers across the border to learn operations in Texas, according to Thomas Tunstall, research director at the University of Texas at San Antonio's Institute for Economic Development.
“With the development of oil and gas projects, I really think the US and Mexico are going to need to look for ways to streamline the border-crossing process,” said Tunstall.
Typical bureaucracy from Homeland Security is slowing the approval process for border crossing by energy company employees, delaying meetings and making it difficult to rely on Texas as a base for advanced training.
Tunstall defended a streamlining of the border-crossing process for energy sector workers during a July 2015 hearing with the US House Committee on Foreign Affairs.
While hard data on how many Mexican energy sector workers are currently crossing the border daily isn't readily available, Tunstall believes the flow of energy sector specialists will increase as Mexico's energy reform progresses.
Manuel Acuña Zepeda, a professor of Energy Law at Universidad Autonoma de Nuevo Leon, said companies, Mexico's government and universities are working together to prepare training programs that focus on the technical skills needed for mid-stream construction, and develop energy-related skills in existing professionals.
“There's an opportunity to develop skills in the professionals that already exist in the country,” said Juan Vargas, Deloitte's senior manager specialized in human capital in the Mexican energy sector.
Mexico's higher education is already well-situated to meet much of the demand. The country ranks eighth out of 124 worldwide in churning out graduates for engineering, manufacturing and construction careers, according to the Human Capital Report 2015, released by the World Economic Forum in May.
Mexican universities produced 113,944 graduates in engineering, manufacturing and construction in 2014, and have another 822,038 currently pursuing such degrees.
However, low enrollment in energy-related higher education programs and weak industry-academia ties mean not enough graduates are trained yet to work in the energy sector. Overall, Mexico has no shortage of skilled workers but needs to better align the qualifications of its graduates with the needs of the energy sector.
Arturo García Bello, Deloitte's director and lead consultant for Energy and Natural Resources in Mexico, said the country will be able to equip more engineers to fill future high-skilled jobs that will be created in the mid-stream sector.
“What the country needs is more specialization for critical positions, which will probably require a closer tie between university and industry,” he said, adding the government is already addressing this issue through studies to identify workforce gaps.
By Anna Flávia Rochas