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Article from the Newspaper Novoe Russkoe Slovo (September 22, 2008)

Our Business is Natural Gas 22.09 18:09 | Vladimir CHERNOMORSKII NRS.com

In the last days of July, Vladimir Gokun, the President of BSI Industries, Inc. wasn’t at his company’s office in Gahanna, Ohio.  He couldn't come to Columbus, the state capital, for the ceremony for the Ohio Governor’s Excellence in Exporting Award. However, the organizers of the event – Ohio Governor Ted Strickland, the Department of International Trade and the Association of Ohio Commodores – accepted his excuse; Mr. Gokun was at this time thousands of miles away from Ohio leading negotiations for the development of a gas field in Central Asia, engaged in what his company was being recognized for.  In 2003, Mr. Gokun was not able to attend the awards ceremony either.  Business is the priority. “Awards are awards, but our business comes first," said Mr. Gokun. 

Pipe, flanges, valves, connectors…in professional English – piping.  Each natural gas facility looks like a spool of thread and from it pipelines expand outward.  Inside this “spool” are systems for gathering, cleaning and treatment for the "blue fuel",  compressor equipment, metering units, distribution stations…and as well underground gas storages and electric power plants so that everything comes to life. And there are other things big and small that enable the facility to send gas to the consumer: feasability studies, design, procurment of equipment and materials, logistics to the job site…then  construction supervision and oversight of the assembly processes to make sure that all design requirments are met.  Then, the facility can be put into operation. This is what BSI Industries, Inc. does – a company with multi-million dollar revenue that employs a few dozen highly-qualified engineers.

 

Ukraine, Kazakhstan, Uzbekistan – in these post-Soviet nations, and in a number of other Eastern European countries, BSI was among the first to develop and rebuild facilities for gas processing and transportation, especially if the operation of these facilities requires the latest technology.  For example, the development of the Khauzak and Shady Gas Fields on the Dengizkul Gas Deposit in Uzbekistan, was completed just as the company received the 2008 Ohio Governor’s Award.  There the wells produce gas with high sulfur content, an aggressive contaminant for piping and equipment.  The gas simply has to be cleaned.  The “piping” must operate in these conditions for years at a time.  If not, it simply wouldn’t be profitable to develop these gas deposits.  Everything is based on a feasibility study and then everything described above, as is said, up to the “Turn of a Key.”

A question comes to mind.  Why would the Governor of Ohio honor this company that serves the economy of other nations that at the moment do not have the best relationships with the U.S.  The reason is that BSI has fulfilled contracts worth over 200 million dollars since the 1990s, and all of it, every dollar, comes back to the U.S.А. Part of it, a bit more than 10% covers the firm’s income and salaries, from which taxes are paid.  The rest goes to American manufacturers, the equipment of which is used in the company’s projects.  BSI’s endeavors support around 5,000 American jobs. 

All of this became possible for the firm founded in 1959 when in 1990 Vladimir Gokun, newly arrived in America, came to BSI.  Already not particularly young at 45 and barely able to speak English, Gokun all the same knew the ins and outs of the gas industry.  He is a graduate of Moscow’s Gubkin Institute of Oil and Gas and made his way through all levels of the industry – from an assembler on the Bukhara – Ural pipeline in his student years all the way to vice president of gas production of the large Soviet government-owned company Glavinterneftgasstroi. Along the way, working as a foreman, construction manager and chief of a construction company, he built compressor stations on the largest pipelines at that time: Central Asia Center, Soyuz, and Progress.  He oversaw the most vital gas processing and transportation facilities in the USSR. Vladimir Gokun was high up in the structure of Minneftegazstroi and then Mingasprom, where he managed the construction of a pipeline to Europe.

 
“Why did you leave the USSR?” I asked Vladimir Gokun.  “Today you could very well be a real player in the industry there. You didn’t want this?”

 
“No, I didn’t want this.  It was a tough time.  Who knew how it would all turn out.  So, life gave me the opportunity to take several steps ahead in my career – to master the latest technology and production methods.  As well, and this was particularly important to me, I was able to undertake a most important project – the reconstruction of my own life in my own way. I hope it was successful."

"A huge role in this was played by Jack Youngs, the former owner of BSI Industries, Inc.  Before I arrived in the U.S., I tested the waters to see where my skills and knowledge would be most useful. Jack responded to my inquiry.   He understood that I wasn’t ready to work in the local business.  I couldn’t use a computer well enough to do calculations and estimates. I couldn’t use AutoCAD.  I didn’t know the specifications for equipment made and used in the U.S. or the current technology.  But Jack, 64 years old then, was a man of action with ideas. For a company focused primarily on small projects (major projects had been completed many years before), for a company engaged in gas production and transportation in the eastern U.S. with companies like Consolidated Natural Gas, Columbia Gas, National Fuel, Jack Youngs was searching for a way to break into emerging markets, and I had just arrived from just such a market.”

“We began by inviting specialists from the U.S.S.R for internships, primarily from Kiev and Donetsk.  At that time, there were a number of major design institutes for the natural gas production industry like VNIPItransgaz concentrated in Ukraine. It was assumed on our part that when they went back home the interns would become believers in American engineering approaches and technology, and in turn could promote the interests of BSI Industries, Inc.  This is what happened, but not just in regard to American technology; they became accustomed to the American way of life, too.  The interns came in pairs.  They worked, studied.  Around ten pairs went through the internships.  The majority stayed in the U.S. and some are still working for our company: Vice-Presidents Vladimir Primachenko and Michael Mereminsky and lead engineers Stanislav Pavlichenko and Vitali Kostuchenko, process engineer Yuriy Zemskyy…They knew the Russian language, the local conditions, and they had connecitons in the industry.  By 1992 we had begun to work in Ukraine, Russia, Estonia, and Poland.  Beginning in 1996, we entered Central Asia (Uzbekistan and Kazakhstan) and the Caucuses.”

 
“The first major contract was signed for the reconstruction of the Shebelinka Gas Processing Plant in Ukraine, the work for which was completed in 1996.  New American-made catalytic reforming units and hydro-treatment units for feed stock were installed there.  From 1997 to 1999 BSI Industries, Inc. was engaged in the design and construction of the Khodzhaabad Underground Gas Storage (Republic of Uzbekistan) – the largest facility of its type in all of Central Asia.  And as in the Shebelinka project, the Khodzhaabad project utilized American equipment.  In 2000, BSI undertook the development of a feasibility study for a gas pipeline to Astana – the new capital of the Republic of Kazakhstan. In those same years, BSI was engaged in the development of the Lokachi Gas Field in Ukraine, and the company designed a gas-metering stations in Georgia. 

"The company had established itself in the market. And now we can list a number of facilities in these regions developed with Russian engineers... But what is important is something else: they gave new life to the company, made it a force and gave it high qualifications." 

"With a sense of satisfaction, Jack Youngs retired and his heirs understood that BSI Industries, Inc., in its export incarnation, should be transferred to those who made this happen. At a cost, of course.”

“And how is it working in the former USSR?  Of course, probably not easy…disorder, bureaucracy, corruption…”

 
“Well, thank God we’ve avoided those problems for the most part.  Of course we’re not selling household goods.  All of our projects are of national importance; all contracts are on a high level.  There is a total commitment to fulfill these projects as soon as possible,” Mr. Gokun said.  “There were, of course, some difficulties early on, especially with logistics, when equipment could get stuck in customs for months.  But these problems disappeared…now the Customer there is looking out for its own property.”

 
“What about payment for your services?"

 

"Very simple – letters of credit through first-class U.S. or European banks, including guarantees from the U.S. Export-Import Bank.  You can’t do it any other way.  Big problems could occur otherwise."

There you have in the suburbs of Columbus, Ohio a “Russian” company, engaged in the devolvement of its former homeland, but this time on truly equal footing.  As has become popular to say – life worked out.

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