Nfld. & Labrador

Labour unions close to an agreement for major oil project at Argentia

The wages will be 'somewhat' lower and 'complicated jurisdictional issues' appear to have been removed as three unions inch closer to a formal labour agreement on construction of a concrete gravity structure at Argentia.

3 trade unions have signed MOU with contractors building concrete gravity structure

This field schematic for the wellhead platform shows the concrete base that will be constructed at Argentia. (Husky Energy)

The wages will be "somewhat" lower and what some industry insiders call "complicated jurisdictional issues" appear to have been removed as trade unions inch closer to a formal labour agreement on construction of a concrete gravity structure (CGS) at Argentia.

Leaders in the union movement confirmed Wednesday that a memorandum of understanding has been reached between the contractors building the CGS for Husky and its partners and the three trades unions that will provide the core skill-set for the large project.

Above is the Argentia drydock where the concrete gravity structure will be built. (Husky Energy)

A formal collective agreement that will create much-needed work for hundreds of union members over the next several years could be inked as early as next week, said Tom Woodford, business manager with Ironworkers Local 764.

"We've got a job. It's not an ideal situation, but all across Canada is dead," Woodford told CBC News.

A simplified work environment

The labour arrangement is also a departure from previous agreements on projects such as Hebron and Vale's nickel processing plant in Long Harbour.

Those agreements were negotiated with all 16 trade unions, and created what one insider said were productivity-sucking jurisdictional issues, with "up to four or five groups of workers required to do something very simple."

Husky is doing things differently, with just three trades — ironworkers, carpenters and labourers — at the negotiating table. 

These unions will do about 90 per cent of the work, since the CGS is essentially a "concrete jacket" with five drilling tubes and very little mechanical work.

Any worker can be asked to do anything they are reasonably competent to do.- Oil industry insider

This labour model is similar to what happens in western Canada and elsewhere around the world.

"Any worker can be asked to do anything they are reasonably competent to do," said a source with intimate knowledge of the industry.

Woodford would not go into detail, saying there's still a "moving target" on some issues, but acknowledged that wages will be lower than what workers earned on recent major projects, including Hebron, but will be above the wages rates for commercial and industrial work in the province.

The CGS is a major component of the $2.2-billion West White Rose extension construction project.

Husky Energy is the lead partner on the project, and announced last month that the CGS will be constructed inside a purpose-built graving dock at the former U.S. naval station in Placentia Bay over the next four years.

At peak, some 800 workers will be employed at the site.

The wellhead platform will also include a drilling topside that will be constructed in Texas, while it's expected that the smaller accommodations module will be built in Marystown.

The purpose built graving dock at the Port of Argentia is a sophisticated and expensive - an estimated $100 million - hole in the ground where a concrete gravity structure for the West White Rose extension project will be constructed over the next four years. (Courtesy of the Port of Argentia)

The project couldn't come at a better time for the construction industry. The province is on the downside of what's been record investment in major projects, and thousands of jobs have been shed in the last year or more.

Only 600 of the 1,300 ironworkers with Local 764 are currently employed, said Woodford.

The unions are not happy that so much of the topside work is being done outside of the province, but Woodford said there's only so much pressure that can be exerted on the companies.


Terry Roberts is a journalist with CBC's bureau in St. John's.