THE North West Shelf venture’s Guangdong LNG supply contract has remained a definitive talking point within business circles.
THE North West Shelf venture’s Guangdong LNG supply contract has remained a definitive talking point within business circles.
But the talk has moved on from the initial economic optimism. Flow-on benefits – and to whom – are being debated, as are other issues surrounding large-scale development for the region, and NWS LNG venture operator Woodside Energy has been damping down some of the project-specific job creation figures bandied about.
The fourth train is still under construction, on schedule for a mid-2004 start-up, and engineering design, construction and major manufacturing work will likely roll on to the project’s expected additional fifth train, rather than winding down.
Tied in with the fourth LNG processing facility is a second pipeline to deliver double the current volume of gas to shore.
None of this is expected to create a shortage of supply, however.
Even if projects such as Burrup Fertilisers’ ammonia plant and the Methanex methanol plant were to embark on construction phases overlapping with an onshore NWS project expansion, the number of construction workers required would be less than the 4,000 on the Burrup Peninsula at peak period for the first two phases of the NWS project.
Woodside says an investment decision by the partners on a fifth processing facility would not eventuate before late 2003.
The six equal partners are yet to agree on a new upstream joint venture incorporating Chinese National Offshore Oil Corporation and to decide on their individual commitment to such an expansion.
Not all partners yet consider the fifth train a necessity to supply the Guangdong contract, though most acknowledge it could simplify arrangements.
However, agreement does exist for the fast tracking of upstream activity to supply all commitments.
This, and an eventual increase in total operations, both offshore and onshore, will mean new employment and increased service and maintenance demand.
But Clough Limited general manager corporate affairs Peter Collins said the figures for new employment opportunities had not yet been accurately determined.
Although the NWS venture is regarded as having underpinned some continuity for the past two decades, WA has been seen as a boom-bust State for development.
Hence, Chamber of Commerce and Industry of WA director industry policy Bill Sashegyi said the most important general outcome from the China contract was the continuity of work now offered.
Plenty of businesses across a variety of sectors have wondered about supply and support opportunities, if not to the project itself, which has taken on a new life, then to the region, which is preparing for irreversible change on the back of a number of potential developments.
Historically the NWS joint venture has maximised Australian expertise and supply for the project, and the securities of a number of WA companies rose significantly on China’s choice of supply for its first LNG terminal.
But a group of companies with enviable reputations is already well established within the local industry and the region, and Clough’s Peter Collins has described the market as very competitive.
Clough is one of the partners in the Kellogg joint venture, managing contractor for the NWS project’s phase four expansion.
The Kellogg joint venture partners expect the engineering and project management work to transfer directly to phase five.
The engineering for phase four was completed entirely within WA, a first for such a project.
Mr Collins, also director group business development for Clough Engineering, said construction work would include an expansion of the marine terminal, but there was no guarantee for anyone on construction contracts.
The Clough group is also likely to benefit from other projects planned for the region, which would be needing desalination plants and export facilities out of Dampier Port.
Mermaid Marine chief executive officer Mark Bradley said while most of Mermaid’s opportunities came from marine services to other regional activity and developments, the spin-off benefits for a company such as Mermaid would be in its supply base services.
Monadelphous, a local engineering group benefiting from heightened investor interest since the China contract announcement, has a joint contract with Brambles for general services for the phase four expansion of the NWS LNG project.
The company, which has 400 employees and 35 cranes in the North West, and is the largest private holder of cranage in Australia, is keen to bid for what could be on offer for the proposed fifth phase, group business development manager Roger Collins said.
Monadelphous is supplying cranage, warehousing, general maintenance rubbish removal and assembly services to the fourth phase expansion, and is talking with other major reg-ional project developers, such as BHP Billiton.
It also holds the Chevron Texaco general maintenance services contract for Barrow and Thevenard Islands and a maintenance and modifications contract with Woodside for the Laminaria development.
The company, which announced a 40.8 per cent jump in annual profit to June 30 2002, also recently completed $35 million worth of contracts for the West Angelas iron ore project.
Fleetwood Corporation subsidiary Fleetwood Portables has won two contracts to supply accommodation and common-use facilities to the Mining Area C project, and anticipates using the buildings after October 2003 to supply increased demand in Karratha.
The 2004-2005 construction schedule for the Burrup methanol project would not conflict with any fifth phase expansion for the NWS LNG project, Methanex senior-vice president Asia Pacific Bruce Aitken said.
Methanex is planning to commence production in 2005, and the LNG supply to Guangdong is scheduled to commence by 2006, but Mr Aitken said Methanex would work closely with Woodside so as not to be engaging in the same type of work simultaneously.
Methanex signed a gas sales and purchase agreement with the North West Shelf joint venture late last year, but is yet to make a final investment decision.
Mr Aitken said Native Title concerns were still an issue for Methanex, but it was still hoping for financial closure on its planned $1 billion Burrup Peninsula project in the fourth quarter of this year.
“But we will need certainty [on land access]. Our bankers will want that,” he said.
Projects that may or may not go ahead are not new in WA, which has a history of major project deferrals.
What is new, now, is the sophistication of the wider community and its readiness to act on uncertainties and concerns.
Perhaps the greatest challenge for the WA Government is to achieve a successful blend of policy and regulation that protects environments, delivers good social outcomes, and yet also promotes investment and assists development.
Some firming up on the Methanex and Burrup developments, both relying on significant local gas supplies, is anticipated to speed up government plans for transport infrastructure and other services.
This is what is expected to create the earliest regional momentum and employment opportunities.
But the talk has moved on from the initial economic optimism. Flow-on benefits – and to whom – are being debated, as are other issues surrounding large-scale development for the region, and NWS LNG venture operator Woodside Energy has been damping down some of the project-specific job creation figures bandied about.
The fourth train is still under construction, on schedule for a mid-2004 start-up, and engineering design, construction and major manufacturing work will likely roll on to the project’s expected additional fifth train, rather than winding down.
Tied in with the fourth LNG processing facility is a second pipeline to deliver double the current volume of gas to shore.
None of this is expected to create a shortage of supply, however.
Even if projects such as Burrup Fertilisers’ ammonia plant and the Methanex methanol plant were to embark on construction phases overlapping with an onshore NWS project expansion, the number of construction workers required would be less than the 4,000 on the Burrup Peninsula at peak period for the first two phases of the NWS project.
Woodside says an investment decision by the partners on a fifth processing facility would not eventuate before late 2003.
The six equal partners are yet to agree on a new upstream joint venture incorporating Chinese National Offshore Oil Corporation and to decide on their individual commitment to such an expansion.
Not all partners yet consider the fifth train a necessity to supply the Guangdong contract, though most acknowledge it could simplify arrangements.
However, agreement does exist for the fast tracking of upstream activity to supply all commitments.
This, and an eventual increase in total operations, both offshore and onshore, will mean new employment and increased service and maintenance demand.
But Clough Limited general manager corporate affairs Peter Collins said the figures for new employment opportunities had not yet been accurately determined.
Although the NWS venture is regarded as having underpinned some continuity for the past two decades, WA has been seen as a boom-bust State for development.
Hence, Chamber of Commerce and Industry of WA director industry policy Bill Sashegyi said the most important general outcome from the China contract was the continuity of work now offered.
Plenty of businesses across a variety of sectors have wondered about supply and support opportunities, if not to the project itself, which has taken on a new life, then to the region, which is preparing for irreversible change on the back of a number of potential developments.
Historically the NWS joint venture has maximised Australian expertise and supply for the project, and the securities of a number of WA companies rose significantly on China’s choice of supply for its first LNG terminal.
But a group of companies with enviable reputations is already well established within the local industry and the region, and Clough’s Peter Collins has described the market as very competitive.
Clough is one of the partners in the Kellogg joint venture, managing contractor for the NWS project’s phase four expansion.
The Kellogg joint venture partners expect the engineering and project management work to transfer directly to phase five.
The engineering for phase four was completed entirely within WA, a first for such a project.
Mr Collins, also director group business development for Clough Engineering, said construction work would include an expansion of the marine terminal, but there was no guarantee for anyone on construction contracts.
The Clough group is also likely to benefit from other projects planned for the region, which would be needing desalination plants and export facilities out of Dampier Port.
Mermaid Marine chief executive officer Mark Bradley said while most of Mermaid’s opportunities came from marine services to other regional activity and developments, the spin-off benefits for a company such as Mermaid would be in its supply base services.
Monadelphous, a local engineering group benefiting from heightened investor interest since the China contract announcement, has a joint contract with Brambles for general services for the phase four expansion of the NWS LNG project.
The company, which has 400 employees and 35 cranes in the North West, and is the largest private holder of cranage in Australia, is keen to bid for what could be on offer for the proposed fifth phase, group business development manager Roger Collins said.
Monadelphous is supplying cranage, warehousing, general maintenance rubbish removal and assembly services to the fourth phase expansion, and is talking with other major reg-ional project developers, such as BHP Billiton.
It also holds the Chevron Texaco general maintenance services contract for Barrow and Thevenard Islands and a maintenance and modifications contract with Woodside for the Laminaria development.
The company, which announced a 40.8 per cent jump in annual profit to June 30 2002, also recently completed $35 million worth of contracts for the West Angelas iron ore project.
Fleetwood Corporation subsidiary Fleetwood Portables has won two contracts to supply accommodation and common-use facilities to the Mining Area C project, and anticipates using the buildings after October 2003 to supply increased demand in Karratha.
The 2004-2005 construction schedule for the Burrup methanol project would not conflict with any fifth phase expansion for the NWS LNG project, Methanex senior-vice president Asia Pacific Bruce Aitken said.
Methanex is planning to commence production in 2005, and the LNG supply to Guangdong is scheduled to commence by 2006, but Mr Aitken said Methanex would work closely with Woodside so as not to be engaging in the same type of work simultaneously.
Methanex signed a gas sales and purchase agreement with the North West Shelf joint venture late last year, but is yet to make a final investment decision.
Mr Aitken said Native Title concerns were still an issue for Methanex, but it was still hoping for financial closure on its planned $1 billion Burrup Peninsula project in the fourth quarter of this year.
“But we will need certainty [on land access]. Our bankers will want that,” he said.
Projects that may or may not go ahead are not new in WA, which has a history of major project deferrals.
What is new, now, is the sophistication of the wider community and its readiness to act on uncertainties and concerns.
Perhaps the greatest challenge for the WA Government is to achieve a successful blend of policy and regulation that protects environments, delivers good social outcomes, and yet also promotes investment and assists development.
Some firming up on the Methanex and Burrup developments, both relying on significant local gas supplies, is anticipated to speed up government plans for transport infrastructure and other services.
This is what is expected to create the earliest regional momentum and employment opportunities.
