Case Studies

Carl Smith Pipeline

Reinventing a family tradition of service and expertise

Carl Smith Pipeline (CSP) has roots dating back more than 75 years, as namesake Carl Smith entered the industry originally in the 1930s. The family company, Carl E. Smith Inc., grew even after his passing, but disagreement between heirs led to its dissolution. Several years later, in 2009, Beth Ann Smith, Carl’s granddaughter, determined to reignite the family business. Working alongside Leif Torkelsen, CFO of CSP, Beth Ann continued to grow the business, applying three generations of expertise to the new challenges faced by the energy industry.

“One of the things we are very proud of,” Leif explains, “Is that we have been able to build something from virtually nothing. When I started working with Beth Ann, this company was little more than a box in her living room. Trained as a lawyer, I worked in the fields of finance and venture capital. I brought legal and financial experience to the table, and the Smith family brought their extraordinary technical skills and industry expertise.”

Now five years along, CSP has developed a reputation for specialty pipeline contracting. The team typically works for mid-stream and utility natural gas companies to build the pipelines that move product around the country. As a union contractor, CSP employs as many as 600 people at the height of the work season. The company is headquartered in Franklin, Tenn., with regional offices near major projects. The company’s geographic range varies, but Leif says most projects serve the Marcellus and Utica Shale regions.

A growing portfolio

CSP has built a reputation on the team’s ability to perform pipeline construction in rugged terrain. “Our work is already challenging and it is much more so on the side of the mountain,” Leif explains. “We self-perform nearly everything, but we do subcontract a few tasks such as directional drilling.”

Between union affiliation and the company’s membership in the Pipe Line Contractors Association, the team has made some lasting contacts in the industry. The crew is slowly building up a network of reliable strategic partners, although the mobile nature of the business often means CSP is seeking out new sources for locally-sourced materials.

The team constructs pipeline all over the eastern U.S. ranging from small-diameter feeder lines to very large trunk lines. “Over the last two years, we have had jobs in West Virginia, western Pennsylvania and eastern Ohio,” Leif details. “Typically we operate satellite offices wherever our spreads are based. Wherever our next big job is, we will get to work quickly to set up temporary offices at the site.”

According to Leif, the technical challenges of building in CSP’s region are numerous, but the most difficult is building pipeline along the steep slopes of the mountainside; Beth Ann agrees.

“This positioning creates a considerable risk for slippage, whereby the soil around the buried pipeline gives way to the combined effects of weather and gravity,” she adds. “Considerable damage to the pipeline, and to the environment, can often be the result. Frequently, such situations require the use of a very difficult procedure known as a side-cut. A side-cut involves cutting a deep groove into the mountainside. The side-cut must be stabilized and sloped at the proper degree in order to maintain stability. It is of the utmost importance that the side-cut ditch row follows the natural contour of the mountainside. The procedure is a mix of both art and science. Our team has the experienced personnel to accomplish this.”

Mark West Energy Partners is one of the company’s largest customers. Recently, the CSP team completed Middle Point for MarkWest, a series of projects named after the various compressor stations, including the Tichenal segment that included 18,500 feet of 16-inch pipe. “With the growing need for pipelines in the Marcellus Shale region, many of our projects have been in the mountains of West Virginia,” Beth Ann continues. “Each project in the mountains poses its own considerable, and often unique, engineering challenges.”

Continued growth

A combination of large and small projects has promoted the company’s growth in recent years. While CSP got a start in one of the worst economic times for construction, Beth Ann says her sector of the industry is strong. “We spent the first year doing the regulatory work and getting the company ready to go, especially in terms of our safety program,” she explains. “We started doing smaller jobs in 2010 and worked our way into the larger projects in 2011. Energy companies take a long view in terms of capital expenditure. If there was pressure on the industry, it was from Wall Street, not the economy.”

Focused preparation has set the business up for long-term success. As of 2014, the company has been in business steadily for five years. “We aren’t celebrating any anniversaries, but we are very pleased with our progress,” says Leif. “We have grown so fast that building corporate infrastructure to keep pace has been challenging. We have recently installed a new and very sophisticated management information system that will allow us to track all of our projects in great detail.”

The success of CSP is based primarily on the depth of experience possessed by its field personnel. “Our senior superintendents have decades of experience in the field, almost all of which has been in mountainous terrain,” Beth Ann explains. “Moreover, our superintendents are given a great deal of latitude in terms of how they run their operations. Our pay structure also reflects this; using incentives that take into account both the profitability and safety record on each job. In order to groom younger superintendents, we also reward senior personnel for mentoring and promoting suitable candidates.”

Furthermore, CSP has a well-honed safety program. The program has allowed the company’s superintendents to be recognized by the Pipe Line Contractors’ Association for excellent safety records.

In the coming years, Beth Ann foresees steady growth for her team. “We’re really looking to expand our geographical range, coming down from the mountains into the surrounding hill country,” she notes. “More liquid natural gas terminals are going to be opening and we’d like to be part of that process. Our outlook is good and gas has picked up a lot of slack for people who lost their jobs in the coal industry.”

In the coming years, Beth Ann hopes her and her team can continue to contribute to the growth of the industry, as Carl Smith Pipeline expands into new regions with quality, reliable pipeline construction services.

Published on: August 22, 2014

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