Engineers Australia’s WA Division immediate past president Francis Norman said ahead of his address to the Australasian Oil & Gas Exhibition & Conference next month that the LNG sector still provides a major opportunity for Australian service companies.
Queensland’s three LNG mega-projects are all online and have sent their first cargoes, the latest being Australia Pacific LNG this week. Chevron expects the Gorgon project in WA’s far north to send its first cargo some time in the near future.
The US supermajor is planning to send Wheatstone’s first cargo before the end of 2016, but is working to mitigate “schedule pressures” from previous delays and module delivery issues to meet that deadline.
Woodside has already awarded a few contracts, including front end engineering and design, for its proposed Browse floating LNG development, though doubts persist as to its viability amid such low oil prices which have plumbed a 12-year low this week.
West Texas Intermediate settled down $US1.75, or 5.28%, at $31.41/barrel on Monday amid Chinese stock market woes and continued oversupply.
As for the projects already or about to go into production, Norman said there will be a “great need” for operations and maintenance personnel at both the engineering and trades levels to plan and undertake shut down work, both onsite and in design and supply offices as each of the new facilities come on line.
“Opportunities for individuals will span from operations and maintenance roles, as well as technical and logistics support through sub-contracting businesses and organisations,” Norman said.
The challenge now is for individuals to gain the appropriate skills required for whichever role they are seeking and may also need to be prepared to be flexible with work rosters, as many of these projects will require irregular hours, Norman warned.
Norman, who will present in the Service & Supply Opportunities in LNG Projects and Operations stream at AOG, said that the game-changing FLNG developments like Royal Dutch Shell’s Prelude also offered a plethora of new opportunities.
He believes the key for companies to get a piece of the action in FLNG will be to provide services to support the operations of new facilities at a cost and quality level that is competitive, while demonstrating a safety record that matches that of the operators.
“Most Australian businesses already have the necessary safety record and skill set needed; the challenge is for them to understand how best to access the overall FLNG supply chain,” he said.
Norman was part of the team that wrote the somewhat ground-breaking Engineers Australia report Our FLNG Future Engineering Opportunities and Challenges which, while obvious to industry professionals, seemed to be beyond the pale for the likes of a 2014 Senate inquiry into the economic implications of FLNG operations.
That inquiry focused on the economic impact on the difference between building an onshore LNG facility versus building an offshore floating LNG facility, but Norman believes it was too one-sided and short-sighted.
He says the opportunities available, with Prelude and, potentially, Browse, means Australia has a capability to be a world leader in providing support to the burgeoning FLNG sector.
“One of the findings of our research is that Australia has the skills and capability to pursue a world leading position in the support of the FLNG sector,” Norman said.
“Western Australia in particular has a long history of both offshore production from fixed and floating facilities, along with over 25 years of LNG experience. This depth gives the region a strong starting position to pursue a position of global leadership.
Yet it could all just pass Australia by so easily if this opportunity is taken for granted, he warned.
EA’s report found that the industry needs to build a strong, collaborative culture between organisations, to identify Australia’s own unique strengths, and to identify the global gaps in knowledge, skills and experience so we can focus on filling them.
Norman says this will need a robust relationship between academic institutions, operators and the broader support industry – and that there is no shortage of opportunities for government and industry to work in collaboration to ensure Australia stays at the forefront of the LNG business.
“Industry needs to take the time to understand the opportunities presented by the huge growth in the LNG industry, and how local support networks and individual businesses need to position themselves, through relationships and strategy, to best support the industry,” he said.
“The better they can demonstrate this support, the more likely it is they will get the opportunities to be involved.
“There is always a role for government in helping Australian businesses access emerging and growing markets. This may involve encouraging stronger relationships between research institutions and industry and ensuring the vocational and tertiary sectors continue to provide appropriate training for all types of roles needed to support the industry.”
He said providing access to support infrastructure in the best geographic locations will also go a long way to ensuring Australia maximises its FLNG opportunities, as would maintaining “an appropriate level of taxation” to allow Australian businesses to compete on an even playing field.
“Australian government could also help by supporting the export of Australian LNG expertise to other locations, taking the knowledge accumulated during the expansion of the industry in Australia and selling it to jurisdictions such as Canada where the next expansions are likely to take place,” he said.
However, he warned that the onus was on the local engineering sector to ensure it retained the skills and personnel to make the most of the opportunities the LNG business may bring.
“With the expansion boom now over, future opportunities in the resources sector are almost all in the areas of operations support and maintenance. It is critically important that Australia’s engineers recognise this change in the landscape and reconfigure their skill sets to best address this,” Norman said.
