WA’s great gas rush is gathering steam, as contractors fight for a slice of the billions of dollars in planned oil and gas developments.
WITH $200 billion in major oil and gas projects planned or under way in Western Australia over the next decade, competition for contracts is intensifying as new entrants from overseas and other sectors battle it out with established players.
Leighton Holdings-controlled construction giant John Holland Group this week became the latest player to formalise its strategy of targeting oil and gas work by rebranding its core resources-focused arm.
John Holland’s rebranded Energy & Resources division, which previously operated under the Structural Mechanical Process moniker, is an unabashed ploy to raise the visibility of John Holland’s presence in the gas and mining sector.
The move comes three months after the division launched its assault on WA’s energy sector by securing a $160 million contract to deliver Apache Energy’s Devil Creek domestic gas plant in the Pilbara.
Divisional general manager Brendan Petersen said the rebranding was “all about growth and all about opportunities”, particularly in WA’s oil and gas sector.
Mr Petersen said John Holland aimed to double oil and gas work to 40 per cent of the renamed division’s turnover by 2012, largely on the back of opportunities in WA and Queensland.
The division was already on the hunt for 500-600 new employees in WA to work on its existing projects here, he said.
Despite the growing competition, Mr Petersen said John Holland’s scale, balance sheet strength, and proven record in onshore construction would give it the edge.
“There are not that many who can bring a large balance sheet, operational capability and large project teams to actually deliver large downstream oil and gas projects,” he said. “So while there are a lot of people looking to get on board the new gas rush ... at the end of the day you need to have a certain size, strength and capability.”
Devil Creek itself has become a bellwether of the intensifying competition in WA for oil and gas work, with Apache last month awarding a joint venture between Norway’s Acergy and Malaysian offshore specialist Sapura Crest Petroleum a $170 million contract for associated offshore work.
Ironically, Perth engineering icon Clough – which has deliberately narrowed its focus to oil and gas opportunities in the past two years – was originally selected as lead contractor for both onshore and offshore work on the Devil Creek development last year before the global financial crisis temporarily put the project on hold.
While Clough did not retender for the onshore component won by John Holland, it was beaten by the Acergy-Sapura joint venture for the offshore component.
Nonetheless, it has secured several major oil and gas contracts in recent months, including at the Gorgon and Pluto LNG developments, and BHP Billiton’s planned Macedon domestic gas development.
Meanwhile, French giant GDF Suez is working on Santos’ proposed floating LNG development off Wyndham, US-based Bechtel has returned to the WA gas sector at Chevron’s planned Wheatstone LNG project, and Irish group Kentz is in a Thiess-led consortium building the accommodation camp at Gorgon.
Similarly, a number of local firms have branched out from their traditional bases to capitalise on oil and gas opportunities during the past two years, including Southern Cross Electrical Engineering, Monadelphous, and Forge Group.
