How do you transform an idle power plant spanning three locations into a multi-million dollar windfall in just months? This was the challenge faced by one of Canada’s largest oil and gas companies, when they decided to divest a massive industrial asset in Alberta.
The scale of the undertaking was staggering: enormous components, some as large as houses and still in their original packaging, were being stored across three locations, amounting to over 200+ truckloads worth of equipment. Plus there was a very short timeline.
This case study examines how IronHub, a materials management partner, tackled the complex project of finding a buyer for and coordinating the removal of a 90 megawatt power plant and related materials. IronHub completed the process from initial equipment assessment to final sale and removal logistics in 9 months. The sale earned the customer well over asking, showing the untapped potential of dormant industrial equipment.
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Divesting a Massive, Multi-Site Asset Mix Against the Clock
The oil and gas company’s cogeneration power plant presented a complex and multifaceted challenge for IronHub.
Designed in 2008, but never operational, this massive industrial asset spanned three storage locations across Alberta, with the largest site occupying over 80 acres. The project’s scope was further complicated by the diverse nature of the assets, which included high-value turbine generator components intermingled with less desirable construction materials. This mix of equipment required a nuanced approach to valuation and marketing.
Time pressures and operational constraints added another layer of complexity to the project. The company urgently needed to clear their Fort McMurray space to allow for expansion, necessitating a swift sale and removal process before the snow fell in 2024. Meanwhile, they were incurring significant ongoing costs, including $30,000 to $40,000 monthly for third-party space leases to house the surplus plus costs for equipment preservation and maintenance. These financial burdens underscored the urgency of finding the right buyer for the complete equipment package in less than a year.
IronHub’s Turnkey Surplus Sale Approach
IronHub deployed its proven, comprehensive surplus equipment sales strategy to address the company’s needs.
The process began with a meticulous on-site inventory and documentation review. This crucial first step involved data capture, item verification, and thorough analysis to develop an effective sales strategy.
With a comprehensive inventory, IronHub’s team dug in to enrich the company’s data provided and prepare compelling and complete equipment listings of the power plant and related equipment for the IronHub marketplace. The effort required comparing photos and descriptions of actual physical assets to their spreadsheets, which was incredibly challenging given that 90% of the components and materials were wrapped or contained.
Our customer strongly preferred a package buyer who would acquire all assets rather than pursue piecemeal sales. Additionally, their strict safety policies for accessing and assessing the field inventory and contractor vetting for transport and delivery meant that a qualified buyer likely needed to already have relationships with their preferred vendors. These stipulations narrowed the pool of potential buyers and demanded a more sophisticated marketing strategy.
IronHub publicized the equipment package on its multiple marketplace and affiliate networks, then proactively reached out to qualified buyers in its global network to generate interest in the opportunity. Their relationships proved crucial in identifying several potential buyers. Working from the customer’s needs and objectives, IronHub analyzed and ranked competing offers and collaborated with them to ultimately vet down to one ideal buyer for the sale.
IronHub’s team facilitated negotiations between parties and coordinated the complex logistics of massive-scale equipment removal. No project of this size occurs without surprises. In this case, the challenge lay in obtaining proper customs documentation for decade-old machinery to move it across the Canada and US border. Original paperwork was scarce, but IronHub persevered, contacting original equipment manufacturers, collaborating with multiple departments of the company, and engaging customs stakeholders. By the deadline, all necessary documentation for the long inventory list was in place for smooth international transport.
Ultimately, over a nine-month process, with regular communication and status updates with all stakeholders, IronHub was able to fulfill the company’s power plant sales and divestment goals. Through thorough site logistics planning, they ensured on-time delivery of every asset to the American buyer and minimized disruption to the company’s field teams while maintaining safety standards.
A Masterclass in Asset Management – Optimal Price, Safe Removal, Perfect Timing
The outcome of the surplus sale exceeded the company’s expectations. The final multi-million dollar sale price surpassed their goal, providing the company with a substantial return on its dormant assets.
Operationally, the project was a resounding success. All locations were cleared by the fall deadline. Using vetted buyers and contractors ensured that the entire process adhered to strict safety standards, mitigating potential risks associated with large-scale equipment removal.
The customer’s overall assessment of project impact: “IronHub got us a return over our expectations,” stated Supply Chain Manager at one of Canada’s largest oil and gas companies. “And the benefits extended far beyond monetary gains. The overall process management includes crisp and clear timeframes, cross-functional meetings, and set schedules. That project management allowed our team to be hands-off and saved us considerable time.”
Perhaps most importantly, IronHub’s project management effectively mitigated risks for the company. The successful navigation of customs challenges, adherence to strict safety and environmental requirements, and holding the buyer accountable to move-out dates ensured a smooth and compliant process from start to finish.
“This wasn’t just about selling equipment. It was about delivering a comprehensive solution that addressed our financial, operational, and strategic needs. It showcases what’s possible when you combine industry expertise with innovative problem-solving
The Supply Chain Manager
“IronHub foresaw challenges on the horizon and prepped us on what to expect,” the Supply Chain Manager pointed out, underscoring IronHub’s proactive approach.
The project demonstrates IronHub’s ability to transform idle assets into significant revenue while efficiently managing complex, time-sensitive projects.
The Supply Chain Manager summed up the project’s significance: “This wasn’t just about selling equipment. It was about delivering a comprehensive solution that addressed our financial, operational, and strategic needs. It showcases what’s possible when you combine industry expertise with innovative problem-solving.”
The project posed significant logistical, financial, and time-sensitive hurdles. IronHub applied a proven surplus sale approach, completing the process from initial equipment assessment to final sale and removal logistics in 9 months. The sale earned our customer well over asking, showing the untapped potential of dormant industrial equipment.
Unlock the Hidden Value in Your Surplus Assets with IronHub
Are you sitting on untapped value in your surplus equipment? Don’t let assets go unused or sell for less than they’re worth.
IronHub is the energy industry’s most trusted materials management partner – combining technology, expert support, and turnkey services to maximize equipment reuse and capital recovery.
North America’s leading energy producers rely on us for:
- IronHub Materials Management provides expert guidance and an easy-to-use platform to track and reuse equipment internally and publish items to the marketplace for sale, all supported by turnkey services.
- IronHub Marketplace provides sellers with multi-marketplace reach, fair pricing, and turnkey sales management, while offering buyers the industry’s largest pool of quality equipment from trusted sellers.
“Many first discover IronHub through our marketplace — but that’s just the tip of the iceberg. We’re a fully integrated materials management partner. Whether you are seeking to unlock value from surplus equipment or streamline internal work, IronHub delivers the platform, process, and services to maximize recoverable value.”
Taylor Assaly, CEO of IronHub
