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Interview

Paul Newbound – Executive Director & CEO, APTS, Australia

APTS has delivered quality pipeline and pressure testing services in Australia for over 13 years. Paul Newbound details how their microwave non-destructive testing technology for non-metallics will revolutionize the Australasian pipeline industry, and reveals the milestones on the path from a one-man consultancy to an award-winning company with international ambitions.

APTS recently introduced the cutting-edge microwave non-destructive testing (NDT) technology for non-metallics to the Australian market. How did APTS come across this groundbreaking technology and what are the benefits that the oil and gas industry can expect from it?

My primary objective has always been to make a difference, and this thinking is still moving our company forward 13 years later.

A few months ago, we set up our in-house NDT department distributing traditional and standard testing methods based on radiography and ultrasonic technologies. During a trip in Canada, our NDT manager met with Brian Gray, his counterpart at Spectrum NDT, the Canadian company that had developed this specific technology. At this time, it was only distributed in North America, and, acknowledging the huge potential impact this technology embodies, we finally acquired the exclusive license to distribute it in Australia, New-Zealand and Papua-New Guinea.

From a broader perspective, this game-changing NDT testing technology for non-metallic components aims at further reducing the risks that are still associated with our customers’ welding processes and that ultimately threaten our partners’ asset integrity. By utilizing highly sensitive electromagnetic inspection techniques instead of ultrasonic or radiographic processes, this technology surpasses the limited methods currently employed in Australia and can precisely assess the integrity and quality of non-metallic components- including high-density polyethylene (HDPE), rubber, fiberglass and composite materials located on both the exterior and interior surfaces of the weld. In this regard, this new technology can generate superior and more accurate weld monitoring, increasing the project success rate at the end of the day while significantly reducing operational and maintenance costs and liabilities.

Since we brought it onto the Australian market in February 2016, a large and still growing number of oil and gas customers using HDPE pipes have already displayed a deep interest in embracing this new testing technology. We thus adapted our capacities to ensure we can supply this growing demand, whether our customers want us to run the testing processes for them or they want us to train their own employees to use it.

Finally, our NDT technology for non-metallics is also available within an integrated offering of testing services, comprising both microwave and torsion testing. Beside the unique breadth of this offering, we also managed to decrease analysis turnaround of the testing from several days or weeks to a couple of hours, preventing our partners from laying in the sea kilometers of pipes that display unsatisfactory welds.

When you started APTS as a one-man consultancy in 2003, did you ever imagine to one day be in the position to push the technological boundaries of your industry?

Absolutely not! But to be perfectly honest, my primary objective has always been to make a difference, and this thinking is still moving our company forward 13 years later. At APTS, we do not focus on the money or on our margins, but on customers’ satisfaction, safety and quality – every time we are involved in a project, our main objective is to ensure our customers would be eager to work again with us as soon as our given mission will be successfully finished. In this regard, working at APTS doesn’t only mean having the requested expertise, but also being genuinely ready to exceed our customers’ expectations and continuously striving to have a positive impact on our partners’ business.

Retrospectively, what would stand as the company’s crucial turning point or milestone on its successful journey?

The crucial milestone that clearly made us transition from “just another company” to a trusted and respected industry partner was indisputably when we became involved in Woodside’s flagship LNG project, Pluto, in Western Australia. We were awarded all the onshore testing on this USD 15 bilion project, and our partners particularly praised our contribution, as we boasted a remarkably low rate of safety incidents all over the three years this project lasted.

Leveraging this successful experience, we were then awarded some works on INPEX’s Ichthys project, while we still have a substantial number of employees currently operating on Chevron’s Gorgon and Wheatstone projects, for which we were awarded a number of works. Multinationals like Woodside, Chevron, Bechtel, CBR, and other major EPCM companies are extremely strict on safety requirements, while they also expect the highest quality standards from their contractors. Beside the related revenues of these contracts, operating on these world-class projects clearly helped us to take our standards to the next level.

As these LNG projects are currently shifting from a construction to an operational phase, what kind of opportunities do you envision for APTS?

We have been targeting the maintenance phase of these LNG projects as the most promising growth driver for our company in Australia for the upcoming years. Fortunately, having been involved in the construction phase of these projects should stand as a real competitive advantage to expand our partnerships with these projects’ operators into the operational phase. For maintenance works, we are mostly dealing with the same partners and people as for the construction phase, and these people already know they can rely on APTS to deliver the required quality as well as guarantee the safety standards they expect.

So far, we have already been particularly successful as we were already awarded several of these strategic and long-term maintenance contracts, but we obviously look at being even more largely involved. In this regard, the recent launch of our NDT technology falls within our strategy to further broaden our testing offering, as we foresee that a larger and more integrated service portfolio would be more appealing to the engineering companies awarding maintenance contracts for these LNG projects.

We nevertheless recently realized that we have to more efficiently communicate what kind of services our company can concretely offer. A few months ago, we conducted a survey among 400 of our clients to evaluate their understanding of our offering, and we notably asked them what kind of services they would be keen to find within our service portfolio. It unfortunately turned out that 97 percent of our clients recommended us to provide NDT services and 83 percent of them chemical cleaning services, while we have been precisely offering these services over the last 13 years! To tackle this lack of awareness, we are also educating our technicians on the field to spread the message and ensure that they steer our customers toward our own offering as soon as they identify a need we can meet.

With offices in Perth and Queensland and a large involvement in Australian projects, APTS has successfully consolidated its presence on the Australian market. How would you like to see your international footprint evolving?

Singapore would stand as an interesting next step within our internationalization strategy, and we are thinking of opening an office there, which would sustain our effort to get a wider and more international recognition. We already have a substantial footprint outside Australia and New Zealand, as we have for instance conducted several works in Papua New Guinea for Clough, CBR or ExxonMobil. Nevertheless, our key market targets in the Southeast Asia region are Indonesia and Malaysia, while we have already bound a strategic and promising joint venture with a Malaysian company in order to jointly tender for some works on INPEX’s Ichthys project in Australia.

Beside Southeast Asia, we see that – although it stands as one of the most mature markets in the world – there is no company like APTS currently implanted in North America. In Canada and in the US, we already identified some potential clients that are currently underperforming and experiencing a high failure rate, nurturing a need for our services. In these two markets, a third party company that boasts our experience could indeed clearly make a difference and bring a lot of value to the different oil and gas projects and customers. We definitely have ambition to establish a footprint in North America on a mid-term perspective, and we want to benefit from the current industry downturn to make strategic moves. We are not afraid to make such decisions in a tough pricing context: after all, we started APTS in 2003, at the time when the industry was already experiencing a terrible downturn!

What do you want to achieve over the next five years?

Over the next five years, my vision is for APTS to truly become multinational. I am nevertheless looking at stepping back in the upcoming months, which means I could steadily leave the head of the company but remain present on the company’s board of advisors. As many other Australian success stories, we have been approached by a wide array of multinationals over the last years. We acknowledge that becoming part of a multinational would indisputably help APTS to grow, but whatever option we ultimately choose, our main and most important objective is to continue making a difference and bringing value to our customers. If we were acquired by a listed company, I nevertheless fear that listed-companies’ obligation to maximize shareholder value would eventually overtake APTS’ philosophy to favor customers’ satisfaction over our profits.

You have led APTS from a one-man consultancy to an award-winning industry leader company with international ambitions. What keeps you motivated?

First of all, we have been able to pull together a great team, which has become only better over the years. Furthermore, I am a challenge-driven person: when I, for instance, heard about the NDT technology, my first reaction was to find a way to bring this game-changing technology to the Australian market. I negotiated during weeks to obtain the required license agreement, while my main motivation was to eventually find a technology that would tremendously decrease our partners’ failure rates, and ultimately contribute to improve the industry’s standards.

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