Oilfield Pipeline Experts
Business View Magazine interviews Justin and Chad Peter of JP Services, as part of our focus on suppliers to the oil and gas industry.
JP Services, headquartered in The Woodlands, Texas, provides pressure testing and pipeline maintenance services for the oil and gas industry. The company was founded in 2011 by Justin Peter, who saw the need for hydrostatic, or pressure, testing on the pipelines in the Eagle Ford Shale, a hydrocarbon-producing geological formation that lies under 26 southeast Texas counties. “He took out a small loan, bought a truck, and built out what we call a test trailer, or a mobile testing unit, and formed his company,” explains Chad Peter, Justin’s brother and Company Vice President since 2013. “His main marketing tactic was to drive through the Eagle Ford Shale until people asked him to hydrotest some their pipelines and fittings.”
The company soon thrived on the booming business in the Eagle Ford. “At that time, they were aggressively building out the infrastructure there, which meant there was more work than we could even remotely dream of handling,” Chad recounts. “So, we continued to build out the customer base, strictly by word of mouth, and continued to grow.” Soon, there was an expansion into the greater Houston area, a merger with an equity group, and a restructuring of the company’s customer base from one of general contractors and pipeline builders to actual asset owners and operators.
“Pipelines are required to be recertified for certain periods – some lines every five years, some every seven,” Chad explains. “That sector of the market is known as the ‘integrity division’ within these operators. So, we started honing in on working with the integrity divisions of the larger asset owners to attain consistent work; not relying so much on new construction, but relying on the regulations that the government has placed on companies to keep their pipelines in compliance.”
This past year, JP Services earned $44 million in revenue, up from $25 million the year before. The company has 126 employees and offers pipeline cleaning, both chemical and mechanical, in addition to its pipeline integrity and maintenance services, and, just recently, it added three new service lines – the most prominent being a water management component. “The water solution is a great differentiator. It has a great impact on how the industry uses water,” says Justin. “We can safely and environmentally-friendly source, transfer, and treat water around oil and gas and industrial projects. So, for instance, if a project is going to take 10 million gallons of water and there’s three projects that are going to be happening in the same region, we can take that same 10 million gallons and store it, treat it, and use it again and again. That’s not only environmentally impactful; it’s a good cost impact to the industry.”
“Obviously a lot of the majors are going to try to be a little bit more environmentally friendly and we see an opportunity to, not only, increase the efficiency of our operation with the water aspect but also to be a little bit more environmentally conscious in the methods that we employ around our water management, storage, and disposal assets,” Chad adds. “So, we call it water management to be all-encompassing and we can handle it from Point A to Point B and everything in between. The reduction of the environmental impact is significant.”
The other two new additions to the company’s portfolio include a nitrogen service with trucks that transport and pump nitrogen to the industrial and midstream space, and a flaring service that provides temporary flares for burnout of unwanted gas or condensate in pipelines. Together, the three new units have added 50 jobs to the company’s roster. “And all of them increase our footprint in making the midstream space a safer, more environmentally-friendly place,” says Justin. “And we’re leading that change in the industry, right now.”
Chad maintains that JP Services has always looked for opportunities to offer services whenever it has discovered a new industry need. Currently, that means moving from vendor status to advisor status. Chad explains, “The research we’ve done in the B2B marketing and sales space – we’ve realized that a lot of our customers have transitioned from wanting to have quality vendors to having quality partners or advisors who can help with solutions around the services that we offer. Our customers are looking for people that are going to provide solutions that are equitable and efficient and reduce risk around the services that we are rendering to them. It’s not just ‘Can you do this for cheap?’ but ‘Can you do it at less risk and provide a more efficient solution to reduce our scope from a timeline standpoint?’ And we’re seeing that across the industry.”
Justin elaborates: “The concept from vendor to advisor status is, if you’re a vendor, they’re calling you and saying ‘We need you to provide us this’ and they go with whoever is the cheapest. Advisor status is they call us and say ‘We’re trying to solve this problem. How do you think we should do it?’ And then they’re listening to us. They might go out to the market and still get quotes, but they’re a lot more likely to select our services because now they trust us. We’ve doubled our market share in the last year under the premise of going from a vendor to an advisor status. We’ve reduced the number of safety and environmental problems. We’re providing more solutions.”
Going forward, Justin says that the company is planning to set up satellite offices soon in Louisiana and Pennsylvania, while Chad says, “We want to provide the industry with more efficient and safer methods of delivering various services based on key research and data. We want to be leaders on the deployment of technology and digital integration. Our goal is to deploy technology and to see how we can utilize the data that we’ve got to touch more of the value chain of our customers and to diversify. That’s a win for us – knowing that we can step back and be satisfied with what type of organization we are and being an all-solutions provider to our customers. And the market is speaking for our niche. It has shown a bend towards us.”
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AT A GLANCE
WHO: JP Services
WHAT: Provider of pressure testing and pipeline maintenance services for the oil and gas industry
WHERE: The Woodlands, Texas