Five times turnover forecasted

Article Translated to English

Connector Subsea Solutions has bought the largest in welding and joining of deep water pipelines. This year the goal is to double the turnover, in the long run it will bump 500 million.

By AndreA BærlAnd

andrea.baerland@finansavisen.no

BRITISH ACQUISITION: Connector Subsea Solutions has four owners who all work in the company. From left chairman and head of business development, Pål Magne Hisdal, technology manager Kristen Andrew Foshaug, CEO Ivar Kjærvik Hanson and operations manager Andre Kristiansen Midtun.

Over the past six months, Connector Subsea Solutions, headquartered in Kokstad outside Bergen, has made two acquisitions in the UK. As a result, they have become the largest company in the world for joining and welding of pipelines in subsea installations in the oil and gas industry. Last fall, Connector purchased a business unit that manufactures MORGRIP® connectors (connectors for subsea pipelines, ed. Note) from listed company Hydratight. It gave the company access to equipment and technology used in operations for a number of large oil companies, including Equinor.

Robotic Welding

Now they have bought the engineering company Isotek, which among other things has developed a robot that can remotely control the welding work on deep water pipelines. The robot was first used during the world’s first remote-controlled welding operation on the Johan Sverdrup field last year. “Over the past two years we have invested about NOK 100 million in people and technology that will further strengthen Connector’s position as a premium supplier of pipeline repairs down to a depth of 3,000 meters”, says CEO Ivar Kjærvik Hanson. The 100 million includes not only the two UK companies, but also acquisitions of local Fjell Subsea Products in 2018 and internal technology development.

Goal: 500 million in sales

Connector sells and rents outboard packages for the operating companies, and participates with personnel when parts of a pipeline are to be repaired or replaced. The goal is to enter into several fixed agreements to make the income base more predictable. In 2019, operating revenues were NOK 83.2 million and the annual result ended at NOK 25.5 million. The company’s preliminary peak year is 2016, when the company had sales of just over NOK 92 million.

– Our long-term goal is to reach annual sales of NOK 4 – 500 million and believes this is realistic in a growing subsea maintenance market, says Hanson.

So far, the company has mainly worked abroad, but they believe that there are also opportunities on the Norwegian continental shelf.

Increasing maintenance needs

“This year, the assignments have been queued, and the goal is to increase revenues to around NOK 160 million. At the end of the first quarter, we were well on track, and the corona eruption did not affect operations to any great extent”, says Hanson, adding: “We expect the fall in oil prices will affect the companies’ willingness to invest, and thus our revenues, in 2021 and into 2022. At the same time, we see that many subsea installations are starting to approach 15-20 years old, the age at which maintenance needs begin to sign up. Throughout the summer and autumn, Connector will, among other things, conduct offshore operations of both Angola and Trinidad for two of the world’s largest operators”.

“We believe this can provide valuable experience for subsequent operations against operators in both West Africa and the Gulf of Mexico, which because of the water depth are important markets for us,” says Hanson.