The latest issue of Breakbulk magazine, the industrial project supply chain trade publication, includes two articles featuring Independent Project Analysis, Inc. (IPA) experts.
In a piece titled “Moving Energy Parts,” IPA Energy Practice Director Neeraj Nandurdikar offers insights into how the breakbulk industry must adapt to a rapidly changing energy sector. As the sector transitions to cleaner and renewable energy sources, Nandurdikar says owners will be increasing their investments in lighter industrial-type projects and allocating less capital to the construction of heavy industrial onshore and offshore assets. “Operators of vessels capable of moving hundreds of tons may have to uncover efficiencies to compete” with owners of smaller ships, given the oil and gas Industry’s increased spending “on new energy projects requiring lighter equipment and more modular components,” Nandurdikar writes. IPA has previously reported on steps owners can take to improve the capital effectiveness of renewables and Carbon Capture, Use, and Storage (CCUS) project investments.
Breakbulk operators should also broaden their energy outlook, Nandurdikar writes in the article. “Vessel operators should weigh whether their fleets are prepared to support global markets and sectors powered by natural gas-driven electricity or liquid biofuels. Each may require different kinds of projects and different kinds of shipping needs. Hopefully, the project cargo and breakbulk industry can turn to meet the energy sector’s transport requirements more nimbly than the vessels they pilot.”
The second Breakbulk magazine article features IPA Senior Research Analyst Christos Lampris, who discusses IPA’s multi‑client research into the competitiveness of large capital projects in China. Interviewed by Thomas Timlen, a Singapore-based analyst, researcher, and writer, Lampris said the COVID-19 pandemic, supply chain disruptions, capital expenditure reductions, lower oil prices, and U.S.-China trade disputes have disrupted some planned investments. However, several owners, including multinationals and Chinese‑owned companies, are committed to moving forward with projects in China. “Capital projects take years to start production, and these sectors have determined that the long-term demand forecast post-COVID-19 supports expansion,” he said.
Lampris, the author of an IPA report published in June about capital projects in China, also discussed the issue of whether Western owners and manufactures can tap into the perceived benefits of the facilities construction supply chain in the country. “Undoubtedly construction quality has improved over the past decade, and Chinese contractors can mobilize resources to execute projects fast. However, according to project management theory, it is very difficult to have it all: a facility that is cheap, fast, works as expected, and that was built without injuring anyone in the process.”