In announcing its second-quarter financial results, heavy haulage and crane solutions provider, Entrec, said the outlook for its business in the USA continues to be positive, but warns that a more cautious approach is needed in Canada.
In the USA, demand for the company’s services “continues to grow” in the markets that it serves, said John M. Stevens, Entrec’s president and ceo.
He added: “We plan to continue to invest in growing our US business through both capital investment in new equipment and through geographic expansion.”
In the second quarter of 2019, Entrec expanded into the state of Wyoming. The company also plans to diversify its business beyond the oil and gas sector and “into other industries including wind power, refinery and petrochemical, and construction,” explained Stevens.
The outlook for Canada, however, is significantly more cautious. According to Entrec, this is due to macroeconomic factors impacting the oil and natural gas industry in the country’s western regions.
Pipeline constraints have contributed to significant discounts in the market price for the oil produced in Western Canada compared with other jurisdictions, said Entrec. Rising carbon taxes and increasing regulatory requirements to achieve government approvals for large industrial projects are also having a negative impact.
Looking ahead to the remainder of 2019 and 2020, the company believes it will take time for the oil and gas producers to begin increasing their capital spending levels.
On a more positive note, Entrec said that it continues to be optimistic about the impact that LNG Canada’s USD40 billion liquefied natural gas (LNG) project in Kitimat will have on the industry, as well as the natural gas sector in northwest Alberta and northeast British Columbia.