Case Study
$65B Canadian Energy Delivery Company Achieves $180M in Cost Reductions Necessary to Maintain Market Position and Take Advantage of Industry Growth Opportunities
$180M
Cost Reductions Achieved in Eight Months
Strategic Imperative
To maximize total resource utilization in the Pipeline Integrity (Maintenance) Program and reduce operating costs by at least 20% within one year of plan implementation, resulting in $120M in annualized cost reductions
Client Background
- Major North American energy infrastructure company operating the continent’s longest crude oil and liquids transportation system
- Liquids pipeline operations extend across more than 18,000 miles of active crude pipeline in North America
- Pipeline Integrity (Maintenance) Program supported safe, reliable asset performance across the company’s energy transportation network
- Rapidly accelerating industry change and surging North American oil and gas production created significant growth opportunities
- Outsourcing demand expanded faster than internal infrastructure capabilities, increasing complexity in vendor and field execution
- Unacceptable asset maintenance expense levels created urgency to improve resource utilization and reduce operating costs
Key Issues & Barriers
- Leadership team and organization were not aligned around common goals, weakening program governance and execution
- Outsourced vendors maintained broad control over pricing, limiting internal cost discipline and commercial leverage
- Internal bidding and execution control infrastructure severely lagged rapidly escalating maintenance and outsourcing demands
- Reactive maintenance relied minimally on planning and scheduling, creating avoidable inefficiencies in resource utilization
- Pipeline integrity processes required stronger best-practice standardization and structured reporting to support consistent execution
Key Implementation Components
- Organized the leadership team around full consensus on pipeline integrity goals, cost targets, and program priorities
- Established a standards- and projected-cost-based bidding process to strengthen contractor pricing control and cost discipline
- Developed and implemented field project management tools and techniques to improve planning, execution, and resource utilization
- Enhanced field project management skills to strengthen accountability and execution consistency across integrity work
- Implemented core process upgrades incorporating pipeline integrity best practices across maintenance activities
- Established structured reporting to improve visibility, performance control, and follow-through across the Pipeline Integrity Program
Benefits & Results
$180M
Cost Reductions Achieved in 8 Months
157%
Cost-Reduction Commitment Achieved