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Next generationAre we doing enough to attract new talent?Page 26
Autumn 2016 / issue 35
LNG’S
Official LNG 18 edition
Looming reformCOAG, COP 21 and an election: What’s next?Page 10
Booming beetalooAustralia unleashes new E&P frontierPage 47
NEW AGE
FP ad 1Page one
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AUTUMN 2016 / ISSUE 35
16
Contents2
This magazine is available to interested parties throughout Australia and overseas. The magazine is also available by subscription. The publisher welcomes editorial contributions from interested parties. However, the publisher accepts no responsibility for the content of these contributions and the views contained therein are not necessarily those of the publisher. The publisher does not accept responsibility for any claims made by advertisers.
Next generationAre we doing enough to attract new talent?Page 26
Autumn 2016 / issue 35
LNG’S
Official LNG 18 edition
Looming reformCOAG, COP 21 and an election:What’s next?Page 10
Booming beetalooAustralia unleashes new E&P frontierPage 47
NEW AGE
ON THE COVERINPEX’s Ichthys LNG Project, located near Darwin in the Northern Territory, is due to export first gas in 2016.
Proud member of
gastoday.com.au | AUTUMN 2016
49
Gas Today is the National Media Partner for the LNG 18
Conference & Exhibition
47
ContentsREGULARSFrom the Editor 4
Contributors 6
Calendar of events 60
Advertisers’ index 60
POLICY IN REVIEWEnergy solution so close, yet so far away 10
What does COP21 mean for the natural gas industry? 12
2016 federal election: what can natural gas expect? 16
LEGAL ISSUESArbitrate today: trends in international arbitration 18
INTERVIEWLighting up the north 20
Australia’s land access new frontier 22
A new age for contractors 24
Graduating in gas 26
MARKETSNew market trends for 2016 28
INDUSTRY NEWSGPA Engineering wins NEGI contract 32
AWS scores top marks with Achilles 33
OFFICIAL LNG 18 FEATUREMinister's welcome to LNG 18 Conference 34
At a glance: Australia's LNG industry 36
PNG to host new LNG export project 42
INNOVATION AND NEW TECHNOLOGYGermany’s gas and renewables integration: what can we learn? 44
EXPLORATION AND PRODUCTIONAustralia’s gas exploration and production opportunities 47
QGC’s Charlie: a vote of confidence in Queensland 49
Commercialising Arrow's mammoth CSG reserves 52
PROJECTSLessons to be learned from project cost overruns 53
McConnell Dowell completes NT pipeline and facilities work 55
Good things come in small packages: Wadeye Power Station 56
EVENTSAPPEA 2016: a catalyst for innovation and new partnerships 57
How training is helping one Australian oil and gas player save millions 58
How Australia’s energy sector is responding to rapid change 59
34
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gastoday.com.au | AUTUMN 2016
4
WELCOME TO Gas Today’s official LNG 18
Conference and Exhibition edition.
We are proud to be the National Media
Partner of this important event, which will
attract thousands of LNG professionals
from all over the world to Perth, Western
Australia.
While the plummeting oil price has sent
shock waves through Australia’s natural
gas industry, its LNG sector will continue to
strengthen in coming years.
The International Energy Agency has
predicted global gas demand to increase by
around 50 per cent to 2040. In China, total
gas consumption is expected to more than
double by 2030. India’s LNG demand is also
expected to nearly double by 2019–20, as it
seeks to provide power to more than
300 million people for the first time.
Australia’s reputation as a stable and
reliable supplier of LNG and our proximity
to these emerging markets provide us
with a competitive advantage to meet
this demand, which is expected to result
in Australia providing 40 per cent of both
Japan and China’s LNG requirement.
LNG is also going to provide the strongest
growth in resource export earnings,
increasing to AU$45 billion by 2019-20
when Australia is expected to become the
world’s largest LNG exporter.
However, the question of commercialising
new LNG projects in order to sustain this
growth is a big question for the industry
and government.
Reform of industrial relations and
energy policy, which will (hopefully) be
meaningfully addressed in the upcoming
federal election, coupled with the
development of a national gas supply
strategy through the COAG Energy Council,
will assist decision-makers charged with this
difficult task.
We hope you enjoy this edition, in which
we provide our visiting international readers
a comprehensive overview of the LNG state
of play in Australia; analysis of COP21 and
its impact on natural gas; and provide
insight into an exciting innovation in the
interplay of natural gas and renewable
power storage, through the pilot of power
to gas technology throughout the European
Union.
Sally Commins
Editor
EDITORIAL
From the Editor
SALLY COMMINS EDITOR
Join our 9,400+ communityFollow us on Twitter @GasToday
KEITH ORCHISON AM is the publisher of
the Coolibah Commentary monthly
newsletter and the associated This
is Power blog, the editor of the
OnPower website and yearbook, and
a commentator on energy issues for
Business Spectator. Keith served as
Chief Executive of APPEA and the ESAA
between 1980 and 2003.
BARBARA JINKS HAS over 30 years of
international gas pipelines and gas
field development experience across
construction, design, environmental, social,
legal and commercial issues. She is currently
Executive Director for LNG18, and consults
to gas companies assisting with business
development and developing corporate
client account management.
PAUL BALFE IS a director of ACIL
Allen Consulting, Australia’s largest
independent economic consultancy
company. He has worked for 35 years
in the Australian energy and resources
sectors, advising government and
corporate sector clients on commercial
and regulatory matters relating to the
gas industry.
THE GAS TODAY editorial board
KEITH ORCHISON PRINCIPAL, COOLIBAH CONSULTING
BARBARA JINKS GAS INDUSTRY ADVISOR, EXECUTIVE DIRECTOR LNG18
PAUL BALFE EXECUTIVE DIRECTOR, ACIL ALLEN CONSULTING
Contra 1Informa corporate
learning
6
EDITORIAL
EditorSally [email protected]
JournalistsSonia Nair, Tim Fitzpatrick
advertising
sales managerDavid Marsh [email protected]
DESIGN
Design ManagersKatrina Rolfe, Bianca Botter
director – pipelines and gasLyndsie [email protected]
data manager/analystGareth Weaver
PublisherZelda Tupicoff
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JOHN COTTER
DR GERALD LINKE
SCOTT CUMMINS
JOHN STEEN
MR COTTER IS the Chairman of Queensland’s
Gas Fields Commission. He works with
his fellow commissioners to manage and
improve sustainable coexistence among
rural landholders, regional communities and
the onshore gas industry in Queensland.
He is a former AgForce President and has
successfully negotiated the rights of rural
property owners in challenging times.
Mr Cotter speaks to Gas Today about rolling
out best practice landholder engagement in
Australia.
DR GERALD LINKE is the senior managing
director at the Deutscher Verein des Gas
und Wasserfaches (DVG) association,
Germany’s peak gas and water association.
Dr Linke, who has a doctorate in physics,
has more than 20 years of management
experience in the energy industry and in
particular at E.ON. Since 2013, he has been
Senior Vice President Mid-Sized Projects
of E.ON Technologies GmbH and technical
managing director of Netzgesellschaft
Kokereigasnetz Ruhr GmbH. Dr Linke
speaks to Gas Today about ‘power to gas’
technology, how it’s changing the energy
landscape in the European Union and how
this technology could revolutionise energy
policy in Australia.
SCOTT CUMMINS IS international contractor
McConnell Dowell’s newly minted CEO, and
in an exclusive interview with Gas Today
discusses how he believes a contractor
needs to adjust in a difficult market, such
as what the industry is experiencing today.
Born and bred in Melbourne, Mr Cummins
has travelled the world for the past 30 years
as an executive for world leading offshore
services provider, McDermott International.
You can read Mr Cummins's thoughts on
page 24.
JOHN STEEN IS an Associate Professor in
Strategy at the University of Queensland
Business School in Brisbane, Australia. John
is currently leading major international
research studies on the subject of
innovation and productivity in the resources
sector and in developing economies. This
includes the transition to new digital
business models and performance in
megacapital ($1 billion-plus) projects,
particularly in the oil and gas sector. Current
partners in these projects include University
College London, Cambridge University,
Government of Vietnam, Queensland
Government, UQ Sustainable Minerals
Institute, APPEA and EY. John writes about
the findings of his research in this edition’s
‘Projects’ feature.
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gastoday.com.au | AUTUMN 2016
98
gastoday.com.au | AUTUMN 2016
Old warriors departTWO FORMER RESOURCES ministers, the
Hon. Ian Macfarlane and the Hon.
Gary Gray, have announced their
resignations from politics.
Mr Macfarlane held the rural seat of
Groom for 18 years, nine of which
were spent as a resources and
energy focused minister.
Mr Gray, elected to the seat of
Brand in 2007, served as special
minister of state and resources
minister under the former Rudd
and Gillard governments, after
working as national secretary of
the ALP from 1993 to 2000.
APPEA saluted both former
ministers for their outstanding
service to the industry, and
commended their often bipartisan
support of gas industry policy.
Jemena opens new pipeline capacity JEMENA HAS OFFICIALLY opened its 797 km Eastern Gas Pipeline (EGP) expansion, which has increased capacity
on the pipeline by 20 per cent to meet growing demand for natural gas on Australia’s east coast.
Connecting Victoria’s Gippsland Basin to the east coast market, the EGP can now transport at least 22
PJ more gas each year into New South Wales.
The project, valued at approximately AU$150 million, involved the installation of two new midline
compressor stations at East Gippsland and Michelago, plus additional delivery facilities at Wilton.
Jemena Managing Director Paul Adams said demand for gas in NSW remained strong, despite a
challenging outlook in the short term driven by tighter domestic supply.
He added that Jemena had committed to invest nearly AU$1 billion in its pipeline assets over the
last few years, increasing capacity and establishing new delivery points to offer customers even
more competitive and reliable transport and storage options.
Jemena is currently preparing to build the AU$800 million Northern Gas Pipeline, which will link
the gas reserves of the Northern Territory with markets on the east coast through Mt Isa.
Work on this new pipeline is progressing, with first gas scheduled to flow to customers in 2018.
News in BriefNews in Brief
New growth centre for Australia THE FEDERAL GOVERNMENT’S new energy resources growth
centre comes at a critical time as Australia looks to build
on a period of unprecedented growth in the oil and gas
sector.
APPEA Chief Executive Dr Malcolm Roberts said the
National Energy Resources Australia (NERA) initiative
had an important role to play supporting innovation,
collaboration and productivity across the industry.
NERA is located in Perth with nodes in Brisbane and
Adelaide to open later this year.
“The investment of more than $200 billion in new gas
projects will see Australia emerge as the world’s largest
exporter of liquefied natural gas by 2018,” Dr Roberts said.
“NERA’s focus on innovation, collaboration and
productivity in order to reduce costs and improve
Australia’s global competitiveness is welcome.
“This is absolutely essential if Australia is to maximise
the benefits of the current wave of new LNG projects
and position itself as a low-cost destination for future
investment.”
Dr Roberts congratulated former APPEA Director –
Safety & Environment Miranda Taylor on her appointment
as NERA CEO.
8
Ichthys flowlines installation completeOVER 140 KM of rigid subsea flowlines have successfully been installed for the INPEX-operated Ichthys LNG Project at the Ichthys Field
in the Browse Basin, offshore Western Australia.
The infield flowlines were installed in a water depth of up to 275 m to carry reservoir fluids from 20 subsea wells to the project’s two
floating processing facilities – a central processing facility and floating production, storage and offloading facility.
All flowlines were installed with in-line structures, weighing up to 220 t, requiring a total of more than 11,000 onshore and offshore
flowline welds to be executed.
Ichthys Project Managing Director Louis Bon said the safe completion of the complex subsea network was a major accomplishment.
“We are very proud the infield pipelay was successfully completed without a single lost injury time or any harm to the environment,”
Mr Bon said.
“This achievement has marked the end of a 16 month offshore campaign to install 47 km of 6 inch and 8 inch mono-ethylene glycol
flowlines, 7 km of 12 inch transfer condensate flowlines, and 85 km of 18 inch production flowlines.”
In addition to the infield flowlines, the project’s offshore installation campaign has completed the installation of 49 foundation
piles, five production manifolds and a 6,500 t riser support structure.
The infield flowlines work was led by Heerema Marine Contractors Australia, under subcontract to the lead contractor McDermott
Australia, using the deepwater construction vessel DCV Aegir.
The Ichthys LNG Project is scheduled for start-up in the third calendar quarter of 2017.
Future bright for oil and gas apprentices THE FUTURE OF the oil and gas sector in Western
Australia is in good hands, with the first intake
of apprentices starting an innovative nation-first
training program in February.
The first 16 Process Operator apprentices to
be trained by the Energy Apprenticeships Group
(EAG) start their four-year training today in Perth.
In partnership with industry leaders Quadrant
Energy, Shell, Vermilion and Woodside, EAG will
facilitate a new standardised education and
training program to increase the supply of safe,
skilled workers.
The training will involve two years based in Perth
at the Challenger Institute of Technology’s Australian
Centre for Energy and Process Training (ACEPT)
followed by two years of real-world experience as a
fly-in-fly-out operator at various onshore and offshore
oil and gas facilities across Australia.
Renewable risk in SAA NEW REPORT has highlighted the growing challenge of providing
a reliable and affordable electricity system in Australia as we
continue to increase supply from renewable sources.
The report by the Australian Energy Market Operator and
ElectraNet found there was increased risk of reliability issues in
South Australia as a result of its high levels of wind and solar
energy, potentially requiring further investment in the future to
ensure adequate supply.
A 2015 report by Deloitte Access Economics warned South
Australia faced higher electricity prices and also highlighted
the increased reliability risk from being at the leading edge of
integrating intermittent renewable energy into the grid.
South Australia is now sourcing around 41 per cent of its
electricity from intermittent sources, like wind and solar.
“South Australia has become an accidental experiment in
integrating wind and solar at scale,” Australian Energy Council
Chief Executive Mr Warren said.
“Wind and solar are reducing the state’s greenhouse emissions
by pushing conventional power stations out of the market. By
2017 four of South Australia’s largest power stations will have
been either partially or fully withdrawn.
“As a result, South Australians are increasingly reliant on a
narrower range of generation sources to meet their needs when
the wind isn’t blowing and the sun isn’t shining. We can manage
this in a number of ways, but it will require significant extra
investment and careful consideration.”
Getting Real in the CooperCOOPER BASIN FOCUSED oil and gas development company Real Energy has commenced field operations
in preparation for the fracture stimulation program at Tamarama-1 well, located in the Windorah Gas
Project in ATP 927P, Cooper Basin, Queensland.
Workover operations have commenced to re-complete the well with downhole fracture stimulation
completion assembly. Real Energy expects to commence the five-stage fracture stimulation program
in the Toolachee-Patchawarra formation sections at depth below 2,300 m in Tamarama-1 in mid-March
2016.
Real Energy Managing Director Scott Brown said “This is an important step for Real Energy as we
move towards commercialising our Windorah Gas Project in the Cooper Basin.
“Results from the multi-staged fracture stimulation being undertaken at our maiden basin
centred gas well, Tamarama-1, will provide us with significant technical, operational and commercial
information which will form the basis for further development of the project.”
10
gastoday.com.au | AUTUMN 2016
Keith Orchison has been involved in resources and energy industry policy issues for more than 35 years, of which he spent 24 as Chief Executive of national industry associations dealing with upstream petroleum and electricity. He publishes the This is Power blog and a monthly newsletter on his Coolibah website, read by members of the energy industry, analysts, politicians and public servants.
Read more of Keith’s commentary at coolibahconsulting.com.au
BY KEITH ORCHISON, PRINCIPAL, COOLIBAH CONSULTING.
GAS TODAY EDITORIAL BOARD MEMBER
THE ACADEMY OF Technology & Engineering
has made a useful recent contribution by
urging pursuit of sound policy and public
acceptance based on fact, not fear.
Its bi-monthly publication has focused
strongly on this issue – which has seen
coal seam gas and fracking become
fighting words, says Professor Craig
Simmons, a South Australian groundwater
scientist – and has presented the case for
environmentally responsible development
leading to significant societal benefits.
How far Australia’s nine jurisdictions, the
upstream petroleum industry, regulators,
scientists and engineers can go in 2016 to
resolve the “myriad complex social, economic
and environmental factors at play” (Simmons
again) is not a small question.
It is significant not least for more than
four million gas customers in eastern
Australia, including some 100,000
commercial and industrial businesses,
and most importantly in economic terms
for manufacturers who employ many of a
million Australians working in factories.
That we should be at the present pass in
the most populous states (New South Wales
and Victoria) – whose ability to manage the
issue could at best be described as dispiriting
– says very little good about government
skills. That some governments overseas also
have a miserable record is no comfort.
While acknowledging legitimate public
concerns about the impact CSG and
fracking could have on human health and
the environment, Simmons points out that
the long list anti-development activists have
produced about things that could go wrong
is “both unhelpful and unscientific”.
He adds that the list articulates many
possibilities, but says nothing about
probabilities. “We need to be much more
quantitative and scientific about this
contentious discussion,” he declares.
The key point made by ATSE – that,
provided best practice is followed,
unconventional gas can be produced
safely – should be the guiding principle
for governments and should be used to
fast-track resolution of the present impasse,
but it is hard to see immediate grounds for
optimism that this will occur.
This situation is the more vexing when
it is considered against the parallel debate
about a roadmap for closing down older,
emissions-intensive power generation
on the east coast (where 90 per cent of
electricity needs are sited) and replacing it
with efficient, affordable, reliable and
low-emitting new plant, including
renewable energy such as wind farms and
utility-scale solar.
The trio of national upstream petroleum
industry associations – the Energy Networks
Association, Australian Pipelines and Gas
Association and Australian Petroleum
Production and Exploration Association –
rightly point out that combining large-scale
solar and gas generation is among the
more practical and cost-effective ways of
pursuing carbon abatement in this country.
(This approach is not, of course, a silver
bullet one of a range of energy options,
which also, for example, include new high
efficiency, low emissions coal technology,
carbon capture and storage and enhanced
energy productivity, together making up
the “silver buckshot” of a renewed approach
to integrating carbon and energy policies,
something to which the CoAG ministerial
Energy Council declares it is committed.)
We can expect the Australian Competition
and Consumer Commission, at present
pursuing a federal government task to
investigate east coast gas supply, to
present some trenchant comments in the
near future; is it too much to hope that
this, taken with the good advice of ATSE
and others, can move our governments
expeditiously, even in a federal election
year, to bring this sorry saga to a close?
An approach that eschews fear for fact
and trustworthy oversight will go a long way
towards overcoming bombardment of the
community with misinformation and can
help underpin the twin imperatives of good
energy management and durable, effective
carbon abatement that must be among the
highest issues on our national agenda.
To quote the ATSE publication, the
potential for further unconventional
gas development here and overseas
is “enormous”. Wasting it would be
disgraceful.
One the conundrums of eastern Australia’s energy story this decade is how a major new gas export industry has been developed at the same time that domestic gas supply is being undermined by vehement opposition.
Policy in review
Energy solution so close, yet so far away
Contra 3APPEA 2016
gastoday.com.au | AUTUMN 2016gastoday.com.au | AUTUMN 2016
What the experts sayDeloitte’s National Director of Oil and
Gas Geoffrey Cann says the fossil fuel
industry is lining up to try and understand
the implications of COP21 on their business.
“This means there will be questions
attached to the value of resources
companies now have on their books.
Direction of travel means value of resources
will be different to what the value is today.
To understand the implications, you have to
go country by country, asset by asset and
project by project.”
Josh Frydenberg, Federal Minister for
Resources, Energy and Northern Australia,
observes that the natural gas industry
has welcomed the clarity that COP21 has
brought to the sector.
“Now the industry can move forward
in planning and committing to long-term
energy investment.”
Energy Policy Institute Executive
Director Robert Pritchard expects current
business models in the gas industry to
remain sound for “at least another decade”.
“The industry accepts the COP21
agreement as a welcome recognition of
the importance of low carbon technologies
as the way ahead and the important
immediate role of natural gas.
“It is widely recognised as a reliable and
affordable fuel source for power generation,
both for baseload and as standby
generation,” says Mr Pritchard.
Market dynamics and technology to play a role
Natural gas’s increasingly prominent role
in the future energy mix is likely to hinge on
its cleaner emissions profile than the likes
of coal and diesel fuel. The reality isn’t quite
as straightforward as it seems; however,
with market dynamics extremely sensitive
to slight price movements and technological
innovations potentially giving coal an edge
over natural gas.
Mr Cann says the falling price of oil
makes natural gas an attractive fuel in the
transportation sector because this allows it
to displace diesel fuel in many applications.
“Low gas prices can trigger a conversion
in the liquids market, but it won’t happen
until there is typically a very large variance
between diesel and natural gas. Gas has a
high tax and diesel has a low tax and that
keeps the spread wide.”
Low oil prices could also trigger a
conversion from coal to gas – although this
is not as clear-cut as it may first appear. The
problem, Mr Cann explains, is that if you
have widespread conversion from coal to
gas, coal prices fall and that will make the
conversion uneconomical.
Mr Cann says many gas companies are
rallying for a carbon price because that
would keep the price of coal higher than
the price of natural gas. Further, coal
technology may see innovations that reduce
its high-emissions profile.
“Very high yield furnaces which burn
coal at super high temperatures can reduce
coal’s carbon footprint. These furnaces can
remove the greenhouse gas (GHG) effect,
which will make the differences between
coal and gas imperceptible,” Cann says.
Industry commentator and director
of Coolibah Consulting, Keith Orchison,
echoes Mr Cann’s sentiments and says there
is continuing research and development in
many fossil fuel sectors.
“What technology advances can be
achieved in highly efficient, low-emissions
coal generation – pursued vigorously by
the Chinese, Japanese and South Koreans –
should not be lightly dismissed.”
Mr Frydenberg says natural gas’s growing
prominence in the energy mix will happen
over time.
“A transition is already underway in
both Australia and around the world as
countries adopt more renewable sources
of electricity generation. This does not
mean that demand for coal will end. As
the International Energy Agency notes, by
2040, more than 30 per cent of the world’s
electricity will still be sourced from coal.”
However, in the same time frame, the
global demand for gas is predicted to
increase by 50 per cent.
“With gas-fired power station emissions
around half that of a typical coal-fired
power station, the gas industry has a strong
role to play going forward.”
Increased uptake of carbon capture and storage
Dr Fatih Birol, the Executive Director
of the International Energy Agency (IEA),
forecast carbon capture and storage (CCS)
technology to play a crucial role in future
gas production – a sentiment that has
been mirrored by many in the local gas
industry in their efforts to adhere to COP21’s
target to limit global warming to below two
degrees.
CCS prevents large amounts of CO2
from being released into the atmosphere.
The technology involves capturing CO2
produced by large industrial plants,
compressing it for transportation, and then
1312
BOTH STATISTICAL AND anecdotal evidence
suggest that the consumption growth for
natural gas will continue for some time
yet – even with the recent promise of a
decarbonised world outlined in the Paris
Agreement.
Shortly after the Paris Agreement was
reached, ExxonMobil released the 2016
edition of The Outlook of Energy, where it
predicted natural gas would meet
40 per cent of the growth in global energy
demands and that demand for the fuel
would increase by 50 per cent.
Similarly, the latest BP Energy Outlook
report has revealed that natural gas is the
fastest growing fossil fuel and forecasts that
natural gas consumption will increase by 1.8
per cent each year to 2035. The majority of
the increase in demand is projected to come
from emerging economies, with China and
India together accounting for around
30 per cent of the increase and the Middle
East over 20 per cent.
“Gas looks set to become the fastest
growing fossil fuel, spurred on by ample
supplies and supportive environmental
policies. In contrast, the growth of global
coal consumption is likely to slow sharply as
the Chinese economy rebalances,” BP Group
Chief Executive Bob Dudley commented on
the release.
COP21 has been and gone, but the ramifications of the freshly minted Paris Agreement are being felt in the broader energy sphere – no less so in the natural gas industry. Gas Today speaks to industry experts to gauge what the turn of the tide means for the continued advancement of the gas industry.
Policy in reviewPolicy in review
What does COP21 mean for the natural gas industry?
Key facts about United Nations Climate Change Conference (COP21)When: 30 November 2015 to 12 December 2015
Where: Paris, France
Key people who attended: President Barack Obama (US), Prime Minister Narendra Modi (India), President Xi Jinping (China) and Prime Minister Malcolm Turnbull (Australia)
Final consensus: 196 countries around the world have agreed to limit warming to 1.5 degrees above pre-industrial levels by reducing their carbon output as soon as possible and doing their best to keep global warming to well below two degrees
© Frederic Legrand - COMEO / Shutterstock
Above: (Left to right) President of COP21 Laurent Fabius, French President Francois Hollande and Secretary General of the United Nations at Ban Ki-moon at the Paris COP21 (Image: ©Shutterstock/Frederic Legrand - COMEO).
According to Geoffrey Cann, many natural gas companies are rallying for a carbon price.
Robert Pritchard expects current business models in the gas industry will remain sound for at least another decade.
Keith Orchison expects there to be a point in the future when carbon capture and storage becomes mainstream.
In Josh Frydenberg’s view, natural gas’s growing prominence in the energy mix will happen over time.
gastoday.com.au | AUTUMN 2016
14
injecting it deep into a rock formation at a
carefully selected and safe site, where it is
permanently stored.
“I see a great increase in re-injection of
CO2 as an enhanced production technique
in gas production. With gas-fired power
generation, the viability of CCS will mainly
depend on proximity of suitable storage
reservoirs,” says Mr Pritchard.
“The challenge for gas is to decrease
emissions by more efficient gas-fired power
generation.”
Mr Frydenberg says CCS is set to play a
key role in reducing the emissions of LNG
projects, including Chevron’s Gorgon LNG
project.
“With the Gorgon commercial-scale
capture project, we have the potential to
reduce the emissions from this project by
around 40 per cent. This is a promising
development and provides the foundations
to progress this technology further in
Australia.”
However, Mr Cann says the gas
industry hasn’t yet implemented CCS on
a widespread basis because there is no
effective market to prop it up.
“The idea that we should do this [CCS]
as a business requires carbon pricing,
carbon markets and fair prices for capturing
carbon.”
Prior to Paris, Mr Cann says CCS was
sidelined – with the gas industry watching
on curiously – but he expects the industry
to take it more seriously once proper
mechanisms are fully in place.
Keith Orchison concurs: “We are in a
period where it is harder for both the
energy industry and governments to find
the necessary funds to support further
breakthroughs in CCS, but I expect the work
to continue and for a point to be reached
where CCS will start to be mainstream.”
The way forward Most commentators believe that
post-COP21, there is a great opportunity
for gas to move further into power
generation.
Mr Orchison notes that the plans the
195 governments took to Paris allow
for growth in annual gas-fuelled power
production globally of some 77 per cent
between 2013 and 2040.
“It is worth noting that, even in the
scenario the International Energy Agency
has modelled for a revved-up pursuit of
limiting global warming to two degrees, it
sees gas contributing slightly more to power
generation in 2040 than it did in 2013 –
even in an environment where it envisages
power demand slashed back via energy
efficiency,” Orchison says.
Mr Cann also foresees business models
changing, with gas companies set to
compete for transport fuels.
“After you remove coal from the power
generation equation, the biggest source
of micro-particle pollution in cities is diesel
fuel. Gas is cleaner – natural gas companies
will get into the transport market and
compete with power companies.”
And with widespread adoption of
renewables set to only increase, it is a
matter of importance that natural gas
and renewables collaborate in fresh and
inventive ways.
“It is important that this [renewables]
transition takes place in a smooth and
cost effective way, without interruption to
electricity supply,” says Mr Frydenberg.
“With this in mind, it is important that the
two streams of production operate closely
together to ensure stable energy supply
during this transition.”
While Mr Frydenberg says it is promising
to see many energy companies diversifying
into renewables, he says it is paramount
that stable supply is maintained.
Mr Cann foresees gas and renewables
co-existing and complementing each other
to maintain grid and electricity market
performance.
“Gas overcomes intermittency issues with
a low GHG footprint, while renewables of
course have a zero GHG footprint. It results
in a better outcome than coal-fired power
generation.”
Mr Orchison concurs, saying the greater
the share of variable generation in any
market, the greater the need for reliable
back-up generation like open-cycle gas
turbines.
The advent of battery storage complicates
the situation slightly, as it itself functions
to overcome intermittency issues and could
potentially displace the role of gas moving
forward.
However, until battery storage becomes
commercially viable, Mr Cann foresees
coal – as opposed to gas – being
the industry principally displaced by
renewables.
“The post-COP21 direction of travel
globally is to halt the further development
and adoption of coal. It’s already on
the trajectory, as we see ourselves
moving closer to the renewables and gas
combination.”
Crucially, Mr Cann says it is important to
remember that energy supply is a “long-
term game”.
“The world assumes that energy
transitions can happen far quicker than
they actually can. We’ve seen a strong
emphasis on renewables in Europe, but it
still only accounts for a small fraction of
energy generation.
“It is going to take a long time. It’s a
marathon, not a sprint.”
Policy in review
Mr Cann says the falling price of oil makes natural gas an attractive fuel in the transportation sector because this allows it to displace diesel fuel in many applications.
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“Australia’s domestic gas security
and economic growth will depend on
governments removing unnecessary
moratoria and regulatory barriers to the
development of these resources.”
Cheryl Cartwright, Chief Executive of the
Australian Pipelines and Gas Association,
concurs with Mr Bradley; governments must
urgently address the critical issue of supply.
“[Federal Energy Minister] Frydenberg
rightly points out that current challenges
facing Australian producers are putting a
strain on the domestic market, and that the
eastern market does require more supply,”
Ms Cartwright said.
“Governments have a key policy role to
play in ensuring supply. Most policy effort
to date has focused on reforming markets
to improve liquidity, but market reform does
little to influence supply.
“It is also important that governments at
both state and federal levels look beyond
lifting the current moratoria that apply to
natural gas exploration in Victoria and NSW.
While these should certainly be removed
as soon as possible, it remains to be seen
whether that alone will increase supply.
“If politicians need to be reminded of
the significance of natural gas to ordinary
Australians, they can look to recent figures
issued by the Australian Bureau of Statistics
that show that natural gas supplies almost
the same amount of energy to households
as electricity.
“Importantly, natural gas costs
householders less than half the amount
they pay for the equivalent energy in
electricity, and using gas directly in the
home produces about a quarter of the
carbon emissions of coal-fired electricity
from the grid.
“Ensuring that there is enough natural
gas to meet both our export and domestic
markets should be a crucial policy focus for
both our federal and state governments.”
ACCC calls for pipeline reformAustralian Competition and Consumer
Commission Chairman Rod Sims has added
to the fray, calling for regulatory reform in
order to address the difficulties faced by
the upstream gas sector in supply key
industrial users.
“The key point is that the effect of the level
of LNG netback prices on domestic gas prices
depends more than is realised on the level of
competition in the market,” Mr Sims said.
“With many gas suppliers competing for
business, their (seller) alternative is to send
gas to Queensland for export. With few gas
suppliers competing for business you need
to ask why would they sell their gas for less
than the buyer’s alternative of buying gas
from Queensland?”
“The difference in the domestic price
of gas, therefore, depends on the level
of competition to supply gas, and can be
double the transport cost to Queensland,
which is a large amount,” Mr Sims said.
However, in the same speech to the
Australian Domestic Gas Outlook conference
in Sydney, Mr Sims raised eyebrows by
calling for further regulation of Australia’s
pipeline industry.
“Second, therefore, we also have to
ensure that regulation, or the threat of
regulation, is effective as it applies to
natural monopolies like gas transmission
pipelines. This currently does not seem to be
the case.”
“Likely ineffective regulation of gas
transmission pipelines is of particular
concern because monopoly pricing can
lead to inefficient downstream investment
decisions and can limit investment in
upstream exploration,” Mr Sims said.
The pipeline industry issued a strong
rebuke to Mr Sims’s statement, saying
the current National Gas Law provides
insufficient constraint on potential pipeline
monopoly power. Both the APGA and
operator APA Group, the latter being in
the ACCC’s cross hairs, both issued strong
warnings against further reform.
“The existing regime has been highly
effective in delivering timely investment,
something both the Productivity
Commission and the Harper Review have
acknowledged,” APGA Chief Executive
Cheryl Cartwright said.
Counting on COAG Another pressing item that industry will
want to see from election policy will be
a follow-up to the key initiatives agreed
to by the COAG Energy Council, which
last met in December 2015. At the time
the council progressed key initiatives to
improve the adaptability and resilience
of energy markets in order to respond
to environmental and technological
change. Ministers agreed to a national
cooperative effort to better integrate
energy and climate policy, with a clear
focus on ensuring that consumers and
industry have access to low-cost, reliable
energy as Australia moves towards a
lower-emissions economy.
Ministers also agreed that,
fundamental to solving Australia’s energy
challenges, is increasing the amount of
supply, the number of suppliers, and
removing obstacles towards this end.
The council also agreed to modernise
regulatory frameworks and consumer
protections so consumers can engage
with increasingly dynamic and
decentralised energy markets driven
by the need to accommodate emerging
technologies.
Finally, the council has released a Gas
Supply Strategy, which signals a stronger
level of cooperation on onshore gas
social, scientific and regulatory issues
and promoting industry best practice.
The council urged that the challenges
and opportunities arising from the
change sweeping energy markets require
“agile and strategic leadership”, and
noted with eagerness the federal election
as a chance to display this leadership.
Continuing energy bipartisanship Bipartisan support for these policies will
be critical. Historically, Australia has been
fortunate in the mostly collegiate relationship
between Labor and Liberal energy ministers
– Labor’s Martin Ferguson and Gary Gray
and the Liberals’ Ian Macfarlane generally
supported each other’s policies.
Following the departure of My Gray
from politics in February this year,
Labor's new energy minister is yet to be
appointed, and so it remains to be seen
what the relationship will be between
Mr Gray’s successor and John Frydenberg,
who currently holds the portfolio for the
government.
COUPLED WITH THESE pressures will be a
renewed focus on carbon abatement policy,
with the election arriving not long after the
historic COP21 accord in Paris at the end of
2015. The Paris agreement was voraciously
covered – and tweeted – by both the
media and Australian public, and it can be
expected that this coverage will permeate
the rhetoric and policy proposals of both
parties.
So, with these pressures in mind, what
can the natural gas sector expect from
politicians in the lead-up to the election?
Speaking to Gas Today, John Bradley,
Chief Executive Officer of the Energy
Networks Association, says that government
policies are absolutely critical to whether a
golden age of gas emerges.
“While Australia will be the world’s
largest LNG exporter by 2020, Australia’s
domestic gas use could fall by 23 per cent
by 2024 due to increasing wholesale
prices, a declining manufacturing sector
and government policy settings which
undermine the competitiveness of gas,”
Mr Bradley says.
The government’s recent Gas Market
Report 2015 found that demand for gas in
the residential and commercial sector would
grow by 7 per cent over the period to 2024,
despite increasing wholesale prices. This is
because the wholesale price is only a small
proportion of the final selling price.
Carbon-neutral abatement policy criticalMr Bradley says the outdated Small-scale
Renewable Energy Scheme still distorts
appliance markets by subsidising
abatement from solar hot water and heat
pump technologies, but not abatement
from gas appliances.
“The scheme is outdated since the
technologies it supports are readily
recognised as being commercially attractive
without the subsidy,” Mr Bradley said.
“Australia also needs a level playing field
in electricity generation markets and to
remove unnecessary regulatory barriers to
developing unconventional gas resources.
“Low emission, responsive gas-fired
generation is vital to supporting the ups
and downs of renewable generation.
Instead, we see it being squeezed out by
carbon abatement policies that are not
technology neutral.”
Opening new channels of supplyUnlocking new avenues of gas supply
must be on the policy agenda, Mr Bradley
has argued, citing the Gas Market Report
2015 finding that southern gas markets
in Victoria, New South Wales, Tasmania
and South Australia will have insufficient
reserves to meet long-term supply
requirements without developing new NSW
CSG reserves, further discoveries in Victoria
or imports from the north.
While a date has not yet been set, the latter half of 2016 will inevitably see a federal election for Australia. Energy and climate policy are likely to be key election issues as the country struggles to deal with falling commodity prices, rising unemployment and higher than anticipated deficit levels.
Policy in reviewPolicy in review
2016 federal election: what can natural gas expect?
© 360b / Shutterstock
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Australia has real weight as a choice of
arbitration seat when these factors are
considered.
Amendments to the International
Arbitration Act 1974 (Cth), passed in 2010
by the Australian Parliament, facilitate
the conduct of international arbitration
in Australia and the enforcement and
recognition of arbitral awards made outside
Australia.
Australian courts have shown deference
to arbitration and there are now a number
of specialist arbitration judges in some
jurisdictions ensuring the speedy aid of
arbitrations and the enforcement of arbitral
awards.
As in the gas industry, Australia has a
real competitive advantage in terms of
people. Australia has a number of specialist
arbitration lawyers and pre-eminent
international arbitrators.
The resources boom has seen the depth
of Australia’s arbitration experience expand
with the number of arbitrations taking place
in Australia at records levels.
All of this suggests that Australia will
increasingly be a country of choice for
international arbitrations.
WHILE SINGAPORE AND Hong Kong
remain the regional leaders for hosting
international arbitrations, the world of
international arbitration does not stand
still. Increasingly Australia is demonstrating
it competitiveness in this area. This article
considers these trends.
Recent trendsThe 2015 International Arbitration Survey
undertaken by Queen Mary College of the
University of London found that 90 per cent
of corporations prefer to use international
arbitration to resolve their cross-border
disputes rather than transnational litigation.
Only 4 per cent of corporations prefer to use
transnational litigation.
International arbitration remains the
dispute resolution method of choice for
a number of reasons. Most lawyers and
in-house counsel value the confidentiality
and privacy afforded by international
arbitration. However, the 2015 International
Arbitration Survey found that corporations
most value enforceability of awards and
avoiding specific legal systems/national
courts.
The fact that corporations prefer
international arbitration because of the
ease with which awards can be enforced
is not surprising; an award of an arbitral
tribunal is enforceable (in theory at least) in
146 countries which are signatories to the
New York Convention. The enforceability
overseas of domestic court judgments is far,
far less certain.
Selecting the arbitration seatThe choice of arbitral seat, or venue, is
often a vexed issue.
London remains the global venue of
choice. However, in recent years, following
the rise of Asia as an economic power
house, Singapore and Hong Kong have
eroded the dominance of London (and other
European venues).
The 2015 International Arbitration Survey
found that 41 per cent of corporations
had used Singapore or Hong Kong as the
seat of arbitrations in the last five years.
Corporations also said that Singapore and
Hong Kong were the seats of arbitration
that had most improved in the last five
years.
The selection of a seat of arbitration
is one of the most important decisions
a corporation can make when selecting
arbitration as its choice for dispute
resolution. A variety of factors drive that
decision.
When asked why certain arbitral seats
were used corporations indicated that the
reputation and recognition of the seat and
the law governing the substance of the
dispute were the predominant factors.
Australia’s competitive advantageAustralia’s competitive advantage as a
venue for international arbitrations can be
seen when regard is had to a corporation’s
most important reasons for preferring
certain arbitral seats.
The 2015 International Arbitration Survey
found that the top reasons for choosing
particular arbitral seats were:
1. neutrality and impartiality of the
local legal system
2. a track record of enforcing
agreements to arbitrate and arbitral
awards
3. availability of quality arbitrators
4. availability of specialised lawyers at
the seat.
International arbitration remains the preferred method of dispute resolution for cross-border disputes rather than transnational litigation. In the gas industry arbitration has been the first choice for international dispute resolution for many years.
CO-AUTHOR: ANDREW MCCORMACK, PARTNER, CORRS CHAMBERS WESTGARTH
CO-AUTHOR: MATTHEW MUIR, PARTNER, CORRS CHAMBERS WESTGARTH
Arbitrate today: trends in international arbitration
Legal issuesLegal Issues
International arbitration
Mediation
Cross-border litigation together with ADR
Cross-border litigation
International arbitration together with (other) ADR
56%
5%
2%
2%
34%
56%
5%
2%2%
34%
Neutrality and impartiality of the local legal system
National arbitration law
Track record for enforcing agreements to arbitrate and arbitral awards
Availability of quality arbitrators who are familiar with the seat
Cultural familiarity
Efficiency of local court proceedings
Availability of specialised lawyers at the seat
Cost
Language
0 5 10 15 20
Transport connections
Other
Location and quality of hearing facilities
Location of the arbitral institution chosen for the arbitration
Location of people (eg. your organisation or client’s employees,legal and other advisors, experts, accountants, secretaries and hearing staff)
Percentage of respondents
1
2
3
4
Enforceability of awards
Flexibility
Selection of arbitrators
Confidentiality and privacy
Neutrality
Percentage of respondents
Finality
Speed
Cost
Other
65%
64%
38%
38%
33%
25%
18%
10%
2%
2%
Avoiding specific legalsystems/national courts
0 10 20 30 40 50 60 70 80
Preferred method of dispute resolution for corporations
Influences on the seat of arbitration
Influences on choosing arbitration over litigation
HP ad 1Thermo Fisher
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this is the first big chance where we could
see a chance to interconnect to the east
coast pipeline grid really well.
“The NGP is the initial link, then we plan
to connect from Mount Isa through to
Wallumbilla. It will then connect with the
hub at Wallumbilla, then potentially go
up one of the LNG pipelines, or go via the
Queensland Gas Pipeline.
“It is all about trying to interconnect that
grid and to create a market reliability and a
national grid approach but with options for
producers and shippers too. There's a bigger
picture at play, which is also why we are
trying to get this 18 inch line going; it makes
the next step much easier.”
McConnell Dowell to constructThe project’s construction contract
was awarded to McConnell Dowell who,
according to Mr Spink, were heavily
involved in the bid process.
“During the bid phase we ran an
expression of interest very early to pick a
constructor which we could work with under
an early contractor involvement model.
Having never worked with McConnell
Dowell, Mr Spink said that Jemena was very
pleased with the results of the two groups’
early work together.
“One of the other winning factors for
us was the strong integration of Jemena's
team and McConnell Dowell's team.
Jemena’s approvals and design ended up
being based out of McConnell Dowell’s
office. It made it a fairly seamless process
with a good sense of team.”
Land access keyThe new land access regulations in
the Northern Territory and new best
practice models in Queensland meant that
having strong land access credentials was
absolutely critical to Jemena’s success as
the winning bidder.
Jemena worked with environmental
subcontractor Maloney Field Services to
ensure the way the bid was approached
was consistent with these new rules, and
rolling out the latest strategy for land owner
engagement.
“During the last phase [Jemena] met
multiple times with all of the land owners
and developed a landowner line list, so it's
really about upfront engagement. There's
a lot of cattle properties in the area so it's
really important that we work within their
requirements on their land,” Mr Spink said.
“I'm pretty happy with the practices we
have adopted, I'm comfortable they align
with the new report.”
“That's something that has been
reinforced to us by a lot of the government
departments and land owners in the
Northern Territory – just how good our
stakeholder engagement was. We put a
lot of the work into our engagement with
local business and local industry; we really
put a lot of effort to making sure this was
a Territory project and that the its people
benefit from it.”
Mr Spink predicts employment of around
900 people – 600 of which will come from
the local area.
People and employmentIn terms of accommodation, Mr Spink has
advised that workers will be accommodated
in town at Tennant Creek and Mount Isa,
close to the compressor stations at either
end of the pipeline.
The pipeline will also have five camp
locations, with three camps that will
leapfrog to house staff along the line.
Jemena has identified locations for the
camps and is currently going through
approval processes for those camps.
For employment and subcontractor
opportunities, Mr Spink says that people can
register interest on the Industry Capability
Network or by contacting Jemena.
“[Jemena] is trying to involve local
businesses as much as possible, particularly
around Tennant Creek. We are going to do
a lot of work around that area and set up
some good initiatives to give the locals a
hand to make sure they can tender to the
quality required for a big project like this.
“We are doing a few special things with
‘work ready camps’, trying to upskill some of
the locals who might not have the skills for
these sorts of things so we do leave a legacy
in the Territory. We will work with some of
the Aboriginal groups in the area as well.
Hopefully the Jemena name will be one
people think of fondly.”
Next stepsThe company has predicted construction to
begin in the dry season of 2017, having already
begun sending out permission requests for the
Environmental Impact Statement to develop
terms of reference and the pipeline licence
application. The Environmental Protection
Authority has already approved the project.
Once construction is completed in 2017,
the compressor stations will start and should
operate for a full year, and from there Jemena
expects to be operational in around July 2018.
The value of construction work is expected to
exceed AU$300 million.
THE PIPELINE FORMERLY known as the North
East Gas Interconnector, or NEGI, will open
up the Northern Territory’s southern gas
basins for development and greatly aid
in the economic expansion of Australia’s
northern state.
Jemena, which is owned by State Grid
Corporation of China and Singapore
Power, beat operators APA Group, DDG
Operations (DUET Group) and Pipeline
Consortia Partners Australia (China National
Petroleum Corporation),
The shortlist of proposals was split
between a southern line, which would have
run between Alice Springs and Moomba,
and a northern route, running from Tennant
Creek to Mt Isa, with two companies
pitching for each.
After much consideration the Tennant
Creek to Mt Isa route was selected, although
the decision was not without its critics,
though, which included government
and gas companies in southern states,
particularly South Australia.
According to Project Director Jonathan
Spink, the selection of the northern route
was because of its greater feasibility and
lower cost and risk profile. “It’s the shortest
distance being 622 km, and in terms of
risk you've got good road access the whole
way, you've got access to both rail heads on
either end, you don't have sand dunes, you
don't have national parks, and you don't
have wetlands.”
Having easy access allowed Jemena
to get a head start on surveying and
inspections, which were required during the
bid phase.
“[Jemena] staff and the surveying
subcontractor staff were all out there on the
ground and able to do survey work and to
put forward our environmental applications
very early. The southern [route] proponents
hadn't been able to do that.
“It meant we were able to quantify the
risk a lot more than the southern route;
there's no way that those projects could have
been delivered in the timeframes that were
required for the project. The risk around it
meant it was going to be harder to deliver it.”
Big plansWhile the pipeline is very early on in the
development phase, Mr Spink has said that
demand has been extremely high.
“A lot of people are interested putting
gas into the pipeline. We have got a 14 inch
pipeline at the moment, but the plan is to get
it bigger; we have put a hold on the line pipe
production starting until after April 2016.
“We are giving producers a few more
months to tell us how much gas they
actually want to put into the pipeline. At
the moment the 14 inch line should be
comfortably filled; however if we can put in
an 18 inch line, it means we are not going to
have to loop in a couple of years’ time, and
it means everyone should get a reduction in
tariff which benefits everyone.”
In terms of connectivity and how the
Northern Gas Pipeline (NGP) will enhance
competition in the market, Mr Spink says
that by being awarded the operatorship of
the NGP, Jemena will bring some welcome
competition to the market.
“APA Group has been the biggest gas
company in Australia, and I think having
someone else win this pipeline is good for
the market. It means we are a competitor
up here in the Territory now. Producers and
shippers have an option as to where they
want their gas to go.”
Another driving force behind Jemena’s
successful bid has been its new owners
in the State Grid Corporation of China,
according to Mr Spink.
“Our owners really want to invest in
Australia. The market is a little bit quiet at
the moment after the oil price slump, and so
Jemena needed to expand. We have been
wanting to expand for a couple of years but
Gas operator Jemena closed 2015 with a bang, cinching the coveted operator contract for the 626 km Northern Gas Pipeline, one of the biggest gas infrastructure projects in recent history. Gas Today spoke to Project Director Jonathan Spink about how Jemena won the bid and how the pipeline will open up Australia’s northern gas export market.
Above: Jemena Project Director Jonathan Spink.
Interview
Lighting up the north
Interview
ADELAIDE
DARWIN
PERTH
MELBOURNE
HOBART
SYDNEY
BRISBANEMoomba
Gladstone
Mt. IsaTennant Creek
Alice Springs
Otway Bass
Gippsland
Gunnedah
Surat/Bowen Clarence-Morton
Galilee
CooperWarburtonOfficer
CanningCarnarvon
Browse
Bonaparte
Amadeus
Georgina
Wiso
McArthur
Existing pipelines
Gas basin
Above: The Northern Gas Pipeline map will connect the Northern Territory with the East Coast gas network.
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that meaningful engagement to happen.
“I take great pride in saying that we
have changed the culture, not only in the
onshore gas industry but in the way a whole
range of other subsidiaries and authorities
interact with landholders to get the best
win-win result.”
Mr Cotter said that the bottom line for the
pipeline industry is that there are enormous
economic gains to be had by getting
communication and engagement with
landholders right in the first place.
“[The Commission] analysed issues
like fencing the pipeline easement, and
the upfront cost of that compared with
the remedial costs and the angst and
time consumed in dealing with issues on
unfenced easements.
“They are the sort of things that have
given us some food for thought on how best
to progress these pieces of infrastructure for
the best benefit of everyone.
“The pipeline industry and broader
resources industry is all about cost
effectiveness, so there are some serious
economic benefits from taking on board
some of the learnings that we have
gathered.”
Communicating learnings Mr Cotter said that while pipeline industry
owners have been briefed on the stocktake,
he is keen to get out to more industry
events and promote these learnings and the
stocktake as a tool to guide best practice.
“[The stocktake] is now one of the tools
that we have in the kit to better work with
pipeline industry operators and assist them
when it comes to land access, using local
content and so on. It’s a pretty good tool to
provide some data and fact-based evidence
as to why they should do this or that.
“We have always been in the business
of being factual, so undertaking and
developing the stocktake has enabled us to
speak with authority now.”
Mr Cotter said the pipeline stocktake also
contains important information for other
Australian states and industries.
“I am always open to working with
other jurisdictions and happy to consider
an opportunity in which I can help other
landholders, regional communities and
industries gain from what we have learnt in
the last five years in Queensland.
“I think it would be selfish of us not
to share these findings. I would not
wish anyone to go through what some
communities in Queensland have been
through. So if the commission can help
guide others through this process in a much
more amicable and beneficial way, we
would be happy to do that.”
To assist with applying these learnings
on a national level, Mr Cotter says there are
workers in Queensland who now have a
high degree of skill in land access.
“There are skillsets in Queensland that
are available to the rest of the Australian
industry and they should take every
opportunity to make use of it.”
On a final note, Mr Cotter said he believed
that the pipeline industry is similar to the
resources industry a few years ago: “It
needs to look outside the square; it needs to
look at who it can partner with to get better
at communication and move forward in a
better, more engaged manner.”
MR COTTER AND his team looked at 64
locations in Queensland that had been
traversed by pipeline construction.
It enabled them to gather a unique
cross-section of the three different export
pipelines covering properties of different
sizes and geographical locations.
“The stocktake has been completed and
we’ve come up with some key learnings.
The rehabilitation of the three pipelines is
still in progress but the stocktake has been
very useful,” Mr Cotter said.
“It is also valuable to companies working
on other pipeline projects so they can
avoid some of the challenges faced in
building a new pipeline. There are still some
issues on the ground in Queensland, like
rehabilitation, weeds and subsidence, and
they need to be managed carefully within
prevailing seasonal conditions.”
Biggest learningMr Cotter said that, unsurprisingly,
the key learning that stood out from the
stocktake was the importance of consistent
and open communication, which he
said is without doubt is the key to good
negotiations and relationships.
“The number of landholders who don’t
know when a particular issue is going to be
dealt with, or who the person they are going
to deal with during the construction or
rehabilitation of a pipeline, really stood out
as a big issue.
“To give an example, a pipeline was
recently sold in Queensland. The level of
knowledge and information provided to
landholders about the new owner was quite
poor, and that had significant implications
for those landholders who had the pipeline
traversing their properties.”
Mr Cotter said that the new owner is now
working with the Gas Fields Commission
to address the situation and to build
relationships with landholders.
He said that if one looks at Texas in
the US, Australia has a long way to go in
building the sort of extensive pipeline
network that exists there, and so the
industry and the community needs to be in
a good space to be able to do that.
“It’s also not just about communication,
but it’s about relationship building and
effective engagement. We live and breathe
engagement, and in Queensland we have
tried to create an environment to encourage
Queensland GasFields Commissioner John Cotter has recently completed a stocktake of the construction of the three export pipelines in Queensland, and has gathered some key lessons about oil and gas land access best practice.
InterviewInterview
Australia’s land access new frontier
For more information visit the GasFields Commission Queensland website at gasfieldscommissionqld.org.au
Right: John Cotter (on left) looking at a pipeline map on a pipeline easement with Brett DeHayr former Landcare national facilitator who assisted the Commission with the stocktake.
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opportunities – particularly in South East
Asia, New Zealand, and the Middle East.
Mr Cummins says that when it came to
taking up the role at McConnell Dowell,
he was attracted to its multi-disciplinary
capability and international track record,
particularly given his familiarity with those
markets.
“I was familiar with Australia, but
particularly familiar with South East Asia
and the Middle East where I have spent
most of my working career.
“All countries in those regions are very
different in the way business is executed.
But if you know the business environment,
it makes it that much easier to establish
the business approach and the appropriate
strategy to take the company forward in
those markets.
“McConnell Dowell is fortunate in its
diversity, both geographically and capability
wise. From major cross country pipelines
like the QCLNG and APLNG pipelines in
Australia as part of the MCJV, to the remote
Komo airport in PNG for ExxonMobil and
developing Thailand’s pipeline projects for
PTT, McConnell Dowell has an exceptional,
long history in these areas.
“I particularly look at South East Asia as a
very robust market with significant growth
potential for McConnell Dowell. We have
had a real presence and strong local staff
resources from executing projects in South
East Asia the past four decades and our
fabrication and plant yards in Thailand and
Batam, Indonesia.”
Mr Cummins is emphatic that a
contracting business gains most value from
having a diversity of geographies.
“If one market is good, and another is
suffering, having geographical diversity
enables us to spread our risk; it allows you
to retain a good resource base.
“It is very easy if you have a project in
South East Asia, Australians are very mobile
and willing to go work on a project in, say,
Thailand. Our operations in these regions
are also well placed to support specific
Australian project requirements.
“Overall, it makes so much sense for an
Australian organisation to be a part of the
South East Asian and Middle East markets;
it is one flight away, time zones are not
problematic – it makes a lot of sense in
terms of making all that that synergy work
across all of those geographies.”
Papua New Guinea is also a key area of
focus for the company.
“PNG is certainly a country of interest. It’s
great having the knowledge that McConnell
Dowell has a long history of delivering
projects in PNG, such as the recent Komo
Airfield for the PNG LNG project. There is
also going to be continuing significant
investment in PNG which we are well placed
to support.
“There are obviously issues [working
in PNG] that need to be addressed, but
if you partner and work collaboratively
with your client, you would work out what
the problems are and work through them
together.”
And on that, herein lies Mr Cummins’s
third business objective: early, collaborative
client relationships.
Change and progress“I have seen a lot of change for
contractors over my 30 years in the
industry, but also for the clients," says
Mr Cummins.
“The first change is that the size and
the complexity of the projects are much
bigger than what they were 30 years ago.
I used to get excited when we had won a
$100 million contract; now it’s $1 billion
or $2 billion contracts, or even greater
than that.
“Due to this size and complexity, effective
project planning and coordination is critical.
McConnell Dowell has demonstrated
the success of early development of
collaborative relationships with clients and
stakeholders on many major projects.“
A focus on quality and safety has
also been a big change for clients and
contractors.
“The oil and gas industry has become
a lot bigger – the projects are bigger, the
water depths they’re operating in are
greater, and the focus on quality has just
been tremendous. It is well acknowledged
that the reliability of oil and gas facilities is
very high in terms of industry standards, so
having that has been a big change.
“I also think the business has progressed
significantly in terms of safety, and I think it
needs to continue progressing. I think that
the oil and gas industry has been exemplary
in leading the path in the engineering and
construction world – it has set the bar.
“It’s great to have that bar there, and
I know I will use that in McConnell Dowell.
I know what safety execution is at the
highest level, and we need to be striving to
that in all of our industries.”
New relationshipsFinally, Mr Cummins believes developing
early solution focused strategies for project
development is not only critical to the future
of client-contractor relationships, but in
getting projects going in Australia full stop.
“I think that as a consequence of all
of the above – project complexity and
longevity, the need to drive safety and have
an excellent standard of quality – is the
recognition and effectiveness of customers,
contractors and governments working in a
more collaborative, solution-finding mode.
“I think the challenges we are seeing in
the industry today are potentially going to
bring that into sharper focus.
“The process of ‘here’s a project, here’s
a contract, you sign it and deliver’ is not
necessarily the most cost-effective way to
do things. I think now the industry is being
asked that, given the challenges we’ve got
and the emphasis put on cost-effective
solutions, it’s going to drive the contracting
and client organisations closer together
to work out how to more cost-effectively
execute and reliably deliver projects.
“I’m a real believer in having the right
relationships and involvement early on.
That’s one of the biggest things I’ll be
driving with McConnell Dowell – yes the
oil and gas industry is a bit pressed at the
moment, but let’s make sure we have the
right relationships with people, and are at
the solutions table early on.
“Because of the size of projects, not
all of them have gone as well as what
people would have liked. When you have
a market that we’re in now, none of us can
afford to take on a project and for it to end
up costing twice as much as everybody
thought.
“We have got to get that reliability
around schedule and cost, so that as
an industry we can proceed ahead with
developments in confidence.”
Mr Cummins concludes: “If you can’t
proceed with confidence, the project won’t
proceed – or it won’t proceed in Australia.
And it is certainly in Australia’s interest
that we reach these common goals and get
these projects up and running.”
AFTER A BRIEF stint as a graduate with Esso
Australia, Mr Cummins joined McDermott
International in Perth during the boom
period of the North West Shelf. His
enjoyment of the contracting side of the
business – plus a yearning to see the world
– led to his international postings working
on projects in South East Asia, the Middle
East and eventually to the UK.
Mr Cummins’s impressive 30-year career
has involved many different roles, including
project and fabrication management,
commercial, business development, and
finally general management. His career
at McDermott ended as Executive Vice
President in charge of offshore operations
and commercial business on a global basis,
based in London.
Throughout this career at McDermott,
Mr Cummins’s clients included Chevron,
Shell, BP, INPEX, Woodside, and Esso
Australia. While the work undertaken for
these clients has primarily been in an
offshore environment, he has extensive
experience in fabrication for onshore
projects – including the fabrication of LNG
modules for Chevron’s mammoth Gorgon
LNG Project out of Batam, Indonesia.
Speaking to Gas Today at the company’s
headquarters in Hawthorn, Melbourne,
Mr Cummins is confident his experience will
hold him in good stead to lead McConnell
Dowell, where he formally commenced
employment in September 2015.
“I bring a strong understanding of the
challenges and opportunities faced by
clients within the oil and gas industry and
a collaborative approach to partner with
these project teams to deliver cost effective
solutions.”
And while Mr Cummins’s first six
months at the company has been
spent understanding the organisation’s
capabilities, markets, and customers, he
is now looking to embark on a strategic
planning process that will set the contractor
on a new, and even more international,
path for the future.
The business objectives So what business objectives will Mr
Cummins pursue over the next few years?
First up is a focus on developing the
business’s infrastructure focus, and
diversifying its market spread.
“Market conditions have obviously
changed significantly in Australia over the
course of the last year, and everyone is
familiar with the decline in mining and oil
and gas investment in Australia.
“I think equally people are well versed
on the need for civil infrastructure
development, and whether it be in Australia
or internationally, the public only has to
have a look at population growth that is
being experienced and is being forecast
and the corresponding need for new
infrastructure.
“So I think it’s very important that
McConnell Dowell has the right strategy for
the prevailing market, and for us to adjust
our organisation’s focus accordingly.”
The second priority is further developing
the company’s international growth
Born and bred in Melbourne, Scott Cummins has travelled the world for the past 30 years as an executive for a world-leading offshore services provider. Now, he has returned to his home town to lead international contractor McConnell Dowell in his new Melbourne-based role as Chief Executive Officer.
Above: New McConnell Dowell CEO Scott Cummins.
A new age for contractors
InterviewInterview
gastoday.com.au | AUTUMN 2016
26
gastoday.com.au | AUTUMN 2016
27
experienced, and taught me a lot that
I was able to take back to university for
my final year.
» The desire of the people coordinating
the vacation program to show me
career progression options and help me
grow as an engineer also made me feel
welcome and valued.
Tell us more about your newly acquired permanent position at Woodside.
I recently accepted a position as a
graduate safety and risk engineer at
Woodside and began working for the
company in February 2016. At Woodside,
safety and risk engineers are sourced
from all disciplines of engineering and
are responsible for in-depth consideration
of safety during the entire life-cycle of
Woodside's assets.
Day-to-day activities may range from
quantitative modelling of fires and
explosions through to risk assessments,
design of safety systems and development
of safety cases. I have no doubt the position
will be an interesting one that will allow
me to apply my knowledge of chemical
engineering to the important role of
keeping Woodside's staff safe.
Was oil and gas perceived as a popular career pathway for the other students in your course?
It definitely was within my cohort. Oil
and gas is often portrayed as one of the
quintessential chemical engineering
industries – where chemical engineers get
to utilise their knowledge of temperatures,
pressures, fluid mechanics, chemical
reactions, process safety and equipment
design. The industry is also associated with
travel and attractive remuneration.
A combination of all these factors is what
made the oil and gas industry so attractive
to my classmates.
Did you have a role model who you wanted to follow in the footsteps of when you decided to work in the oil and gas industry?
My father is a chemical engineer who
has worked in the mining industry for all
of his career; he progressed through the
ranks and ran a platinum mining company
for almost 15 years. I always found what he
did quite interesting and I'm sure his career
is what sparked my interest in chemical
engineering. However, my interest in the
oil and gas industry is entirely of my own
making.
The gas industry has gone through some tumultuous times in the past few years. How do you feel entering the industry during such challenging times?
On the one hand, entering the industry
now makes me nervous. I would obviously
like to have a long and successful career,
and the cuts that have been seen of late –
even among the bigger firms – are always
at the back of my mind.
On the other hand, tough conditions
require creative and efficient solutions,
which will give me the chance to prove
my worth as an engineer. On the whole, I
believe the challenges facing the industry
– both economic and with respect to climate
change and the environmental image
of the industry – mean that the people
working within the industry will have to
produce cleaner, cheaper and more efficient
technologies and business practices. I am
excited to be a part of that new chapter.
What do you think the oil and gas industry can do more of to attract the best graduates to the industry?
The oil and gas industry is already a
highly attractive industry to graduates, at
least in my experience at university.
What I believe could be improved is
how proactive firms are about hiring
international students. Very few of the
major companies that have vacation or
graduate programs in Australia offer these
to international students. In my view, this
is mostly because of the hassle associated
with visa sponsorship and relocation.
However, by doing this, these companies
are actively excluding some of the top
candidates that come out of Australian
universities from consideration.
It is also worth noting that this is not a
practice unique to oil and gas firms, but
is the norm among many big companies.
Many international oil and gas graduates
wish to remain in Australia and want to use
the skills they learnt here for the benefit
of their adopted country. Allowing them
that opportunity will give the oil and gas
industry access to a group of high-quality,
hardworking graduates who have
previously never been part of the talent
pool.
What is the educational pathway that led you to your current role?
I studied a Bachelor of Science with a
major in chemical systems at the University
of Melbourne from February 2011 until
November 2013. I followed that with a
Master of Engineering (Chemical) from
February 2014 until November 2015.
What prompted you to embark on a career in the natural gas industry?
From a young age, I have found the
methods people use to produce energy very
interesting – whether it be for stationary
energy or transport purposes. Once I began
gaining an interest in chemical engineering, it
became apparent that the oil and gas industry
offered a good blend of these two interests.
The allure of being able to work in many
interesting places around the world as
well as working on facilities that are truly
marvels of engineering – such as gas
processing plants or rigs – only increased
my interest in the industry. I had no
particular preference for either the oil or
natural gas industry, and when Woodside
offered me the vacation position for the
summer of 2014, it seemed like an ideal job
and I was quick to accept.
What were your lasting impressions from your fieldwork with Woodside in 2014/15?
The work I did was very interesting and
was centred around finding the most (and
least) efficient units on the North West Shelf
Gas Plant in terms of fuel gas consumption
per product produced. This was followed
by assessing where fuel gas was being
unnecessarily consumed and proposing
solutions to reduce that consumption.
What was unexpected about the work
was that I was stationed in the Perth office,
while my line manager and graduate buddy
were onsite in Karratha and all the work
I did was related to the Karratha Gas Plant
(KGP).
What this taught me was how to work
independently and autonomously and be
accountable to my own deadlines. I had to
efficiently make use of my line manager's
precious time during phone calls. I got
to work with the staff at the head office;
they were all friendly and helpful and this
gave me the opportunity to source my own
contacts within the company.
During the vacation program, I also made
two trips to the site – spending almost
two weeks at KGP where I had firsthand
experience of how the facility is run and had
the chance to present my findings to the
people who would best be able to use them.
I had several lasting impressions from my
fieldwork with Woodside:
» Woodside's focus on safety in daily
operations (both at KGP and head
office) impressed me and made me feel
safe while working.
» The people working within the
company were extremely friendly and
helpful, which made doing my work
very pleasant. The people who helped
me were also extremely capable and
What is it like to graduate as a gas industry professional in 2016? Gas Today speaks to fresh engineering graduate Robert Murray on the opportunities the natural gas industry offers incoming industry professionals and why it remains a viable career trajectory for many.
Graduating in gas
InterviewInterview
Left: Robert Murray.
Above: Universities across Australia, including the University of Melbourne, are rolling out specialised programs to attract graduate talent to the oil and gas industry. © Nils Versemann / Shutterstock
gastoday.com.au | AUTUMN 2016
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Figure 1 shows the movements in average monthly gas prices in each of the domestic spot and short-term trading markets in eastern
Australia (the Victorian wholesale gas market; the short-term trading markets in Sydney, Adelaide and Brisbane; and the Wallumbilla
gas supply hub) from January 2014 to January 2016.
Through much of 2014 spot gas prices in eastern Australia fell, with the Brisbane and Wallumbilla markets in particular dropping to
very low levels as CSG production began to ramp up in advance of the start-up of LNG production.
December and January saw a sharp rebound coinciding with the commencement of LNG shipments from QCLNG. Again the Brisbane
STTM and Wallumbilla Hub prices showed the sharpest responses, reflecting their proximity to the Gladstone facilities.
From January through May prices in Queensland retreated while in the southern states they remained on an upward trend. Prices in all
eastern Australian markets rose strongly in mid-2015 with a colder-than-average winter boosting demand. The Adelaide spot market, in
particular, showed high spot prices through winter.
After the winter peak, prices again softened to range between $3/GJ and $4/GJ in October 2015 before rising again in the lead up to the
first shipment from APLNG. Adelaide spot prices were particularly strong, reflecting the diversion of Cooper Basin gas into Gladstone as
well as strong demand for gas-fired generation in South Australia.
By the end of the year spot prices were ranging between $3.50/GJ and $6.00/GJ. Notably, prices at Brisbane and Wallumbilla were
toward the lower end of this range which suggests that there was no shortage of supply into the Gladstone LNG plants.
This is borne out by the data on ramp-up of coal seam gas (CSG) production volumes.
WE ALSO RECAP on trends in the global energy markets following the dramatic collapse of
global oil prices through the second half of 2014, and the flow-through to US Henry Hub gas
prices, LNG prices and US drilling and production activity.
In this edition ACIL Allen reviews the ongoing response of gas prices in eastern Australia and the build-up of CSG production through the period of start-up of the three LNG plants on Curtis Island, commencing with QCLNG in January 2015, followed by GLNG in September 2015 and APLNG in January 2016.
BY PAUL BALFE, EXECUTIVE DIRECTOR, ACIL ALLEN CONSULTING
New Market trends for 2016
MarketsMarkets
Data published by the Australian Energy Market Operator on
the National Gas Market Bulletin Board (Figure 2) shows the strong
ramp-up of Queensland CSG production.
By September 2015 production reached an annualised rate
of around 660 PJ/a, at which level Queensland CSG for the first
time accounted for the entire domestic gas demand of eastern
Australia. By the end of 2015 Queensland CSG production had
risen to 85 PJ—an annualised rate of more than 1,000 PJ/a – this
puts to rest any concerns that CSG production rates might not
be able to keep up with the rapid demand increase from the LNG
plants. The raw feed gas requirements for the six Gladstone LNG
trains at full production will be about 1,500 PJ/a.
Production levels therefore appear to be well on track, despite
the adverse oil price environment in which start-up has occurred.
By the end of the year 21 CSG production and processing facilities
were contributing to the supply mix.
The results from the Wallumbilla Gas Trading are shown
in Figure 3. The Wallumbilla Hub provides a market in which
buyers and sellers can trade gas on a short term basis across
three transmission pipeline systems: the Roma–Brisbane
Pipeline (RBP), the South West Queensland Pipeline (SWQP)
and the Queensland Gas Pipeline (Wallumbilla to Gladstone
and Rockhampton, QGP). The RBP continues to be the most
actively traded location at the Wallumbilla Hub.
As shown in Figure 3 prices at Wallumbilla (RBP) fell to less
than $1.00/GJ in November and early December 2014 before
rising sharply, reaching $8.00/GJ at the beginning of January.
Over the course of 2015, the Wallumbilla (RBP) price was very
volatile, trading in a range from less than $1.00 to almost
$8.00/GJ, with repeated rapid fluctuations. From November 2015
through to the end of January 2016 prices trended upwards as
the third LNG project (APLNG) came on line. Trading volumes
have also increased significantly, particularly since mid-2015,
with trades of more than 20 TJ/d now relatively common. The
data confirms our earlier expectations of increased short-term
price and volume volatility reflecting fluctuations in the
supply-demand balance as LNG production at Gladstone ramps up.
BY PAUL BALFE, EXECUTIVE DIRECTOR, ACIL ALLEN CONSULTING
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
AU$/GJ
Jan
14
Feb
14
Mar
14
Ap
r 14
May
14
Jun
e 14
July
14
Au
g 1
4
Sep
t 14
Oct
14
Nov
14
Dec
14
Jan
15
Feb
15
Mar
15
Ap
r 15
May
15
Jun
e 15
July
15
Au
g 1
5
Sep
t 15
Oct
15
Nov
15
Dec
15
Sydney MelbourneAdelaide Brisbane Wallumbilla
GLNG FirstShipment
APLNG FirstShipment
90
80
70
60
50
40
30
20
0
PJ/month
Bellevue
Jan 14 Mar 14 May 14 July 14 Sept 14 Nov 14 Jan 15 Mar 15 May 15 July 15 Sept 15 Nov 15 Jan 16
Condabri NorthJordan Peat
ScotiaTaloona
Berwyndale SouthCondabri SouthKenya Gas Plant
RollestonSpring GullyWoleebee Creek
CombabulaEurombah CreekKogan North
Roma Compressor StationStrathblane
Condabri CentralFairview
Ruby JoTallinga Gas Plant
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1 M
ar 1
4
1 A
pr
14
1 M
ay 1
4
1 Ju
n 1
4
1 Ju
l 14
1 A
ug
14
1 Se
p 1
4
1 O
ct 1
4
1 N
ov 1
4
1 D
ec 1
4
1 Ja
n 1
5
1 Fe
b 1
5
1 M
ar 1
5
1 A
pr
15
1 M
ay 1
5
1 Ju
n 1
5
1 Ju
l 15
1 A
ug
15
1 Se
p 1
5
1 O
ct 1
5
1 N
ov 1
5
1 D
ec 1
5
1 Ja
n 1
6
Quantity (GJ)Price (AU$/GJ)
Quantity Traded Average Price (RBP)
Source: ACIL Allen analysis of data published by the Australian Energy Market Operator.
Source: ACIL Allen analysis of National Gas Market Bulletin Board data.
Source: ACIL Allen analysis of data published by the Australian Energy Market Operator.
Figure 1: Eastern Australia spot gas prices
Figure 2: Queensland coal seam gas production
Figure 3: Wallumbilla Hub price and volume QPV ad 1AMS
www.�uidcomponents.com
www.ams-ic.com.au
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MARKETSMarkets
International trendsAfter dropping sharply through the second half of 2014,
global oil prices stabilised to some extent over the course of
2015. However, continuing price softness is evident with Brent
crude having retreated from a high of almost US$65 per barrel
in May to less than US$40 per barrel in December. There still
seems to be little prospect of a sustained oil price recovery in
the short term.
As shown in Figure 4, US Henry Hub gas prices have
continued to drift lower and now stand at around US$2.00/
MMBtu, a level last seen in March 2012. Japan LNG prices under
oil-linked long-term contracts slumped sharply in April and May
2015, following oil prices down (with a lag) to less than US$9/
MMBtu and have continued to trade at around this level. Spot
LNG prices have remained depressed, with data published by
the Japanese Ministry of Economy, Trade and Industry showing
prices for spot LNG cargoes contracted for delivery to Japan in
December 2015 standing at US$7.4/ MMBtu.
The fall in oil prices continues to drive a dramatic collapse
in drilling activity across all of the major US shale oil and
gas plays. Data published by the US Energy Information
Administration shows that the number of active drilling rigs has
slumped by 68 per cent from a peak of 1,308 in October 2014
to 419 in January 2016.
US oil and gas production continued to
rise for several months after the rig count
collapsed, reflecting lags in completing and
tying in production wells after drilling.
However, both oil and gas production have
now peaked, with oil production in January
2016 some 8 per cent below the April 2015
peak of 5.54 million barrels per day
(see Figure 6).
For gas, the corresponding data shows
that production is down 1.9 per cent since
peaking in June at 45.9 billion cubic feet
per day. With the sharp cutback in drilling
activity, these production rates can be
expected to continue to fall over the
coming months. Nevertheless, at this stage
US production rates have proven to be
remarkably resilient, with improvements in
production efficiency largely offsetting the
rapid fall in drilling activity.
Jan
-12
Mar
-12
May
-12
Jul-1
2
Sep
-12
Nov
-12
Jan
-13
Mar
-13
May
-13
Jul-1
3
Sep
-13
Nov
-13
Jan
-14
Mar
-14
May
-14
Jul-1
4
Sep
-14
Nov
-14
Jan
-15
Mar
-15
May
-15
Jul-1
5
Sep
-15
Nov
-15
Jan
-16
0
4,000,000
3,000,000
2,000,000
1,000,000
5,000,000
6,000,000
Oil Production
Pro
du
ctio
n (
bb
l/d
ay)
Bakken Eagle Ford Haynesville Marcellus Niobrara Permian Utica
Jan
-12
Mar
-12
May
-12
Jul-1
2
Sep
-12
Nov
-12
Jan
-13
Mar
-13
May
-13
Jul-1
3
Sep
-13
Nov
-13
Jan
-14
Mar
-14
May
-14
Jul-1
4
Sep
-14
Nov
-14
Jan
-15
Mar
-15
May
-15
Jul-1
5
Sep
-15
Nov
-15
Jan
-16
0
600
400
200
800
1000
1200
1400
Rig count
Nu
mb
er o
f A
ctiv
e R
igs
Bakken Eagle Ford Haynesville Marcellus Niobrara Permian Utica
Source: ACIL Allen analysis of data published by the Australian Energy Market Operator.
Source: US Energy Information Administration data.
Source: US Energy Information Administration data.
Figure 4: US spot gas prices (Henry Hub) compared to oil and LNG
Figure 6 US shale oil production
Figure 5: US active rig count
ABOUT ACIL ALLENACIL Allen Consulting is the largest Australian owned, independent, economic, public policy, and public affairs management
consulting firm in Australia. ACIL Allen advises companies, institutions and governments on economics, policy and corporate public
affairs management, bringing unparalleled strategic thinking and real world experience to bear on problem solving and strategy
formulation. For more information, visit acilallen.com.au
0.00
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4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
Jan
-12
Mar
-12
May
-12
Jul-1
2
Sep
-12
Nov
-12
Jan
-13
Mar
-13
May
-13
Jul-1
3
Sep
-13
Nov
-13
Jan
-14
Mar
-14
May
-14
Jul-1
4
Sep
-14
Nov
-14
Jan
-15
Mar
-15
May
-15
Jul-1
5
Sep
-15
Nov
-15
US$/barrelUS$/mmbtu
Henry Hub Gas Japan LNG Brent Crude (RHS)
HPV ad 1Pressure & Safety Systems
HP ad 4OSD Limited
gastoday.com.au | AUTUMN 2016
3332
gastoday.com.au | AUTUMN 2016
THE GAS PIPELINE is expected to meet energy
demands on the eastern seaboard and
contribute to national energy security. The
14 inch diameter pipeline will connect the
Territory’s gas networks to the east coast
network by linking up with the Carpentaria
Pipeline.
Expected to cost around $800 million to
construct, Jemena contracted McConnell
Dowell to build the pipeline. Additional
contracts have also been awarded to KBR
(facility design), EcOz (environmental
consultation), Circle Advisory (Indigenous
and local business participation
consultation) and Maloney Field Services
(lands consultation).
“The NGP announcement is a significant
development for the gas industry, supplying
the east coast from the Territory, and with
the potential to unlock gas developments
in the Territory where GPA has extensive
experience,” said Alf Sanzo, Managing
Director of GPA Engineering.
“For GPA to be selected to support
Jemena over the next three years in
delivering this major pipeline highlights
the company’s expertise in the oil and
gas sector and specifically pipeline
engineering,” Mr Sanzo added.
GPA has previously provided engineering
services to many of the major gas and oil
pipelines throughout SA, NT and the east
coast.
“GPA was selected as the designers
for the NGP pipeline, following a hotly
contested competitive tender process where
GPA demonstrated that they were the
right consultant to join the Jemena NEGI
team,” said Jonathan Spink, Jemena Project
Director.
Construction is expected to finish in
2017, the compressor stations will start
and should operate for a full year, and
from there Jemena expects NEGI to be
operational from around July 2018.
AWS GENERAL MANAGER Doug Henderson said
Achilles’ tick of approval for the systems
and procedures guiding the use of AWS’
fleet of revolutionary well servicing rigs,
was another key step to instilling industry
confidence in the company’s service
offering.
“We are new to the industry and bringing
fresh well servicing solutions to the arena,
but with anything new, it’s important
we can also demonstrate that our very
unique service is backed by comprehensive
procedures of the highest calibre,”
Mr Henderson said.
“Achieving this tick of approval from
Achilles will reinforce to the industry that
AWS is a company that can successfully
manage and deliver safe, effective and very
efficient project outcomes.
“This high-level endorsement is critical in
the industry sector that we work in, as well
servicing and the associated risks that come
with the task, is well documented.
“We operate in a high risk environment,
and with assets that are key to continued
optimum production output, so being able
to carry out well servicing, while at the same
time providing peace of mind for our clients, is
an important part of AWS’ business model.”
Mr Henderson said with the audit
now complete, and AWS elevated to
a platform of consideration by major
resource developers, he looked forward
to the company building solid working
relationships with those stakeholders in the
future.
For more information visit
wellservicing.com.au
GPA Engineering has been selected by Jemena to design the 623 km, $800 million Northern Gas Pipeline from Tennant Creek in the Northern Territory to Mt Isa in Queensland.
Australian Well Servicing (AWS) achieved a major milestone in March 2016, with the industry newcomer receiving an impressive result from global industry auditor Achilles.
GPA Engineering wins NEGI contract AWS scores top marks with Achilles
Industry NewsIndustry News
GPA Engineering, established in 1987 in Adelaide and with a branch office in Brisbane, is a highly experienced multidisciplinary engineering group operating in the heavy industrial sectors. GPA provides the full range of engineering design services from concepts and detailed design through to commissioning for developments across Australia in the oil and gas, mining/minerals, power and water industries.
Below: Workers servicing one of AWS’s well servicing rigs.
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34 35
Australia’s LNG export capacity is
rapidly expanding, so we can capitalise on
these opportunities. Three LNG projects
in Queensland and the Gorgon project
in Western Australia have commenced
production, and the Wheatstone and
Prelude facilities in Western Australia and
the Ichthys facility in Darwin are under
construction. This will see Australia triple its
LNG exports by 2020.
While these challenging times remain, we
must focus on decreasing the cost of doing
business as a means of boosting Australia’s
competitiveness. This must include
streamlined regulatory processes, greater
labour market flexibility and productivity-
enhancing infrastructure projects.
Innovation, automation, big data analytics
and the provision of government-generated
geological mapping will also be important.
This work has already begun, with the
government implementing a number of
important initiatives to ensure these sectors
remain strong, including:
» removing $4.5 billion of red tape,
including $546 million each
year through one-stop shops for
environmental approvals to minimise
project delays and costs
» opening new and expanding existing
market opportunities through our
free trade agreements with China,
Japan and Korea, and the Trans Pacific
Partnership
» implementing a $100 million
Exploration Development Incentive to
encourage new exploration by junior
miners by providing investor tax offsets
» opening a Major Projects Approval
Agency in Darwin to provide a single
entry point for advice on regulatory
approvals, and facilitating investment
in essential economic infrastructure
through a $5 billion Northern Australia
Infrastructure Facility, and
» establishing two Industry Growth
Centres to expand Australia’s
excellence in mining equipment,
technology and services, and improve
the productivity of our oil, gas, coal and
uranium industries.
With large gas reserves, significant
experience in large-scale LNG development,
a highly skilled workforce and close
proximity to Asian markets, Australia is well
placed to face the present challenges and
capitalise on the enormous opportunities
that lie ahead.
I look forward to continuing the
discussion about the future development of
the gas sector with you at LNG 18.
Josh Frydenberg is the Minister for
Resources, Energy and Northern Australia.
WITH AUSTRALIA EXPECTED to become the
world’s largest exporter of LNG by 2020,
there is no better time to host this event
and to highlight the strength of Australia’s
energy and resources sectors, which
accounts for around 10 per cent of our
economy and employ more than 300,000
Australians.
Australia’s LNG sector has come a long
way since 1989 when our first shipment left
the Karratha Gas Plant in the Pilbara, bound
for Japan. Since then, global demand for
natural gas has increased dramatically,
new LNG exporters such as the US have
entered the market, and transformative
technologies, like floating LNG are
revolutionising the development of these
vital resources.
However, a rapid increase in supply,
including through the US shale gas
revolution, has put downward pressure
on LNG prices, and in turn, considerable
strain on the industry. Throughout these
challenging times, we must not forget
that the long term prospects for the sector
remain strong. Notably, the International
Energy Agency forecasts that the global
demand for gas will increase by around
50 per cent between now and 2040.
Further, a 23 per cent increase in the world’s
population between 2010 and 2030 and a
more than doubling of the world’s middle
class during the same period will only fuel
this growth as economies develop.
China remains hungry for energy to
power its economic transformation and
with its per capita energy consumption
still a third of that in the United States,
the opportunities for the LNG industry are
immense.
Likewise, by 2040, the Indian economy
will be five times larger than it is today,
while emerging economies such as
Indonesia, Malaysia and Pakistan are also
looking for solutions to satisfy their growing
energy needs. Such economic growth will
require reliable energy supplies such as LNG
to support this development.
The 18th International Conference and Exhibition on liquefied natural gas will see industry leaders, 5,000 participants and over 250 exhibitors from 60 countries descend upon Perth.
Left: Josh Frydenberg, Federal Minister for Resources, Energy and Northern Australia.
BY JOSH FRYDENBERG, FEDERAL MINISTER FOR RESOURCES, ENERGY AND NORTHERN AUSTRALIA
Minister's welcome to LNG 18 Conference
Official LNG 18 Feature Official LNG 18 Feature
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QCLNG Project
Location: Curtis Island
Capacity: 8 MMt/a
Joint venture participants: BG Group, CNOOC and Tokyo Gas
The QCLNG plant has delivered 71 cargoes
since first LNG production in December
2014. The company expects the project to
reach plateau production by mid-2016.
But the latest phase of the QCLNG plant
is the $1.7 billion Charlie Development
– which will focus on the continuous
development of QGC’s tenements in
the Surat Basin. Charlie Development
will sustain natural gas supply to both
domestic customers and QCLNG’s two-train
plant, which began exporting LNG in
January 2015.
The two-year development will take place
between November 2015 and the third
quarter of 2017. Up to 1,600 contractor
jobs are expected to be created at the peak
of construction in mid-2016, while major
contractors have made commitments to
employ local contractors.
GLNG Project
Location: Curtis Island
Capacity: 7.8 MMt/a
Joint venture participants: Santos, PETRONAS, Total, KOGAS
GLNG commenced LNG export in October
2015, with the ramp-up of train 1 progressing
well after having produced well above
nameplate capacity. Six LNG cargoes have
since been shipped to the plant’s customers.
Commissioning work on GLNG’s second
train has commenced, with a number of its
subsystems now operational. First LNG from
train 2 is on track for the second quarter of
2016.
In January 2016, Santos finalised an
agreement with AGL Energy for the
purchase of 254 PJ of gas for the project.
The gas will be delivered to Wallumbilla
over a period of 11 years, commencing in
January 2017.
Further, in December 2015, Senex Energy
and the GLNG plant completed a transaction
for the development of the Western Surat
Gas Project in Queensland. Under the
transaction, Senex will supply up to
50 TJ/d of sales gas from its Western Surat
Gas Project to the project under a binding
20-year gas sales agreement.
AUSTRALIA IS COMING to the end of its
$200 billion LNG construction phase, which
has driven unparalleled levels of investment
and economic benefits to both the country
and neighbouring trading partners.
Turn back the clock to the nation’s
flagship LNG plant – the North West Shelf
Venture – and the ensuing 27 years have
seen the plant grow from one production
train to five, a progression mirrored by the
mushrooming of numerous LNG plants
around the country.
LNG projects in Australia Many LNG projects are currently in the
midst of coming online, while some existing
projects are adding more production
trains. Below is a snapshot of the latest
developments with Australia’s primary LNG
projects.
North West Shelf LNG Project
Location: North West Shelf
Capacity: 12,000 t/d of domestic gas, 52,000 t/d of LNG, 4,200 t/d of LPG, and 165,000 bbl/a of gas condensate
Joint venture participants: BHP Billiton Petroleum, BP Developments Australia, Chevron Australia, Japan Australia LNG, Shell Development Australia, Woodside
The history of the North West Shelf project
is a long and rich one, having started with the
1970s discovery of vast qualifies of natural
gas and condensate off the northwest coast
of Australia. The project continues to grow,
with the six participants providing sustained
investment in the development of the
project’s upstream facilities.
Last December, the shelf’s Greater Western
Flank Phase 2 Project was approved. It is the
fourth major gas development for the NWS
LNG Project in the past seven years and will
extract 1.6 Tcf of raw gas.
Phase 2 represents the next phase
in gas supply to the existing project’s
Goodwyn Alpha platform, and will involve
the development of the Keast, Dockrell,
Sculptor-Rankin, Lady Nora and Pemberton
fields via a subsea tie-back.
Deliveries are expected to begin in 2016
and continue through 2018.
Darwin LNG Project
Location: Wickham Point in Darwin Harbour
Capacity: 3.24 MMt/a
Joint venture participants: ConocoPhillips, Santos, INPEX, Eni and Tokyo Gas
The Darwin LNG project is another
veteran of the LNG scene, having been
commissioned in January 2006.
However, the plant is geared for new
gas developments in the Timor Sea,
with planning approvals in place for an
expansion of up to 10 MMt/a of LNG. In
2015, Wood Group Kenny won a new,
multi-year contract with ConocoPhillips
for brownfield engineering services at the
Darwin LNG Plant.
Pluto LNG Project
Location: Burrup Peninsula
Capacity: 4.3 MMt/a
Joint venture participants: Woodside, Kansai Electric and Tokyo Gas
The Pluto LNG Project processes gas from
the Pluto and Xena gas fields, located in the
offshore Carnarvon Basin.
In April 2015, Woodside successfully
restarted production at its Pluto LNG Project,
after a submersible drilling rig drifted near
Pluto’s subsea infrastructure and caused a
temporary shut-in.
The formal commissioning of numerous LNG projects has kickstarted a year of positive developments for the sector, so despite strong headwinds being felt throughout the international industry, what does 2016 hold in store for LNG?
At a glance: Australia's LNG Industry
Through the ages 1989: Australia had one operating LNG project – the North West Shelf Venture – producing 2.5 MMt of LNG per year.
2015: Australia exported 30.4 MMt of LNG with a value of $16.53 billion. Q2 2015 quarter production was 48 per cent higher than the Q4 2014 production.
2018: Australia to overtake Qatar to become the world’s largest LNG exporter.
2020: 10 Australian projects are projected to collectively produce more than 85 MMt of LNG a year.
Source: APPEA’s LNG in Australia: Prosperity, Innovation and Legacy
Clockwise from top: An aerial view of the QCLNG Project as of February 2016; earlier this year, Ichthys LNG completed the reinforced concrete roofs for both of its onshore LNG storage tanks; a shot taken last year of Wheatstone LNG’s loading platform.
36 37Official LNG 18 Feature Official LNG 18 Feature
gastoday.com.au | AUTUMN 2016gastoday.com.au | AUTUMN 2016
Ichthys LNG Project
Location: Darwin
Capacity: 8.4 MMt/a of LNG, 1.6 MMT/
Joint venture participants: INPEX, Total, CPC, Tokyo Gas, Osaka Gas, Chubu Electric and Toho Gas
The Ichthys field was the largest discovery
of hydrocarbon liquids in Australia in
40 years, making the Ichthys LNG Project
a significant local energy project. It is
scheduled for start-up in the third quarter of
2017, after it completed the offshore pipelay
for its gas export pipeline late last year.
The project reached another major
milestone in February 2016 when 140 km
of rigid subsea infield flowlines were
successfully installed after a 16-month
offshore campaign. In addition to the infield
flowlines, the project’s offshore campaign
completed the installation of 49 foundation
piles, 5 production manifolds and a 6,500 t
riser support structure. Additionally, the
project completed construction of its
reinforced concrete roofs for both of its
onshore LNG storage tanks.
Just a month prior, the project safely
erected all its 26 modules and made
significant progress on its inlet facilities.
Proposed Projects
Bonaparte FLNG Project
Location: Bonaparte Basin
Capacity: 2 MMt/a
Joint venture participants: Santos and Engie
Santos and Engie are contemplating a
barge-based design, which could make
FLNG competitive again for the Bonaparte
venture, even after the two proponents
abandoned the original FLNG plan almost
two years ago.
Browse FLNG Project
Location: North of Broome
Capacity: 16 Tcf of dry gas and 466 MMbbl of condensate
Joint venture participants: Woodside, Shell Development Australia, BP Developments Australia, Japan Australia LNG and PetroChina
Woodside plans to develop the Brecknock,
Calliance and Torosa gas fields, with a final
investment decision expected in 2016. The
APLNG Project
Location: Curtis Island
Capacity: 9 MMt/a after second train is completed
Joint venture participants: Origin Energy, ConocoPhillips and Sinopec
APLNG exported its first cargo of LNG in
January 2016, completing over four years
of planning and construction. The project
is expected to enter full production later
this year with the construction of its second
train.
Gas is supplied to the facility from
APLNG’s gas fields in the Surat and Bowen
basins.
Gorgon LNG Project
Location: Barrow Island
Capacity: 300 TJ/d
Joint venture participants: Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo Gas and Chubu Electric Power
While industrial issues and cost
blowouts have hampered the project since
construction commenced in 2009, Gorgon
LNG recently shipped its first LNG export
after cooldown operations commenced for
the project’s LNG export system.
Chevron Australia has entered into an
agreement with a subsidiary of one of
China’s largest natural gas distribution
companies, ENN Energy Holdings, to supply
0.5 MMt/a for 10 years from the Gorgon
project. ENN is expected to receive its first
delivery of LNG in 2018 or the first half of
2019.
The project is the largest single-resource
development in Australia’s history.
Shell Prelude FLNG Project
Location: Browse Basin, Western Australia
Capacity: 3.6 MMt/a of LNG; 0.4 MMt/a of LPG and 1.3 MMt/a of gas condensate
Joint venture participants: Shell, INPEX, KOGAS and OPIC
The world’s first large floating LNG
platform and the largest offshore facility
to be ever constructed, Prelude will begin
operations in 2017. The vessel is scheduled
to arrive in the Browse Basin in late 2016.
A string of contracts were awarded for
work on the project early in 2016 and late
2015:
» John Crane – after-market seals and
seal management services
» Wood Group Kenny – specialist
consultancy services for flexible riser
integrity management prior to and
during operation of the project
» Wiltrading Stace – inspection,
maintenance, testing and certification
of all firefighting and lifesaving
appliances onboard the facility
» POSH Terasea – towage and
positioning services
» Monadelphous – maintenance,
brownfield modifications and
turnaround services to the facility.
Following start-up, the FLNG vessel is
expected to remain over the Prelude field
for 25 years.
Wheatstone LNG Project
Location: Ashburton North, Pilbara coast
Capacity: 8.9 MMt/a
Joint venture participants: Chevron, Kuwait Foreign Petroleum Exploration Company, Woodside Petroleum, Kyushu Electric Power Company, TEPCO
One of Australia’s largest resource
projects, Wheatstone’s first LNG cargo will
be delayed by six months until mid-2017.
Chevron cited a delay on the initial module
fabrication in Malaysia, adding that the
company has been successful in mitigating
any further delays.
Meanwhile the Julimar Project, which will
supply gas to the onshore plant, remains on
schedule and on budget.
Chevron also signed a non-binding
agreement with China Huadian Green
Energy to supply up to 1 MMT/a of LNG over
10 years starting in 2020.
At the time of writing, the project was
more than 65 per cent complete, while all
subsea infrastructure and over 100 km of
flow lines have been installed. Hook-up and
commissioning of the offshore platform
continues on plan.
38 39
recent award of the FEED contract to Wood
Group Kenny was a significant development
for the project.
Under the contract, Wood Group will
progress the configuration design of the
flexible risers and umbilicals for the asset’s
offshore gas condensate fields.
Sunrise LNG Project
Location: Southeast of Timor-Leste and northwest of Darwin
Capacity: 5.13 Tcf of LNG and 226 MMbbl of condensate
Joint venture participants: Woodside, ConocoPhillips, Shell Development Australia, Osaka Gas Australia
Fresh uncertainty has emerged
surrounding the development of the
Greater Sunrise gas and condensate field,
after a new maritime law was passed in the
Timor-Leste Parliament. However, Woodside
says it remains committed to developing the
Greater Sunrise fields.
Left: Chevron Australia’s Gorgon Project in Western Australia, which shipped its first cargo of LNG in March 2016.
Above: The Prelude FLNG Project pictured at Geoje, South Korea, following the installation of the flare.
Official LNG 18 Feature Official LNG 18 Feature
gastoday.com.au | AUTUMN 2016
While industrial issues and cost blowouts have hampered the project since construction commenced in 2009, Gorgon LNG recently shipped its first LNG export after cooldown operations commenced for the project’s LNG export system.
4040
Challenges for the sector Notwithstanding the low oil prices, global
shipping consultancy Drewry advised that
LNG shipping earnings will remain under
pressure due to accelerating fleet growth
and changing trade patterns.
The report states that as new sources of
LNG supply kick in from projects coming
online in Australia, demand for spot
cargoes from the Middle East are expected
to weaken – adversely shaping overall
demand for LNG shipping.
Meanwhile, LNG vessel fleet growth is
forecast to double this year to 12 per cent,
compared with 6 per cent in 2015.
“Vessel oversupply is the key problem
for LNG shipping in 2016,” Drewry lead LNG
shipping analyst Shresth Sharma says.
Mr Sharma says he sees no let-up in
vessel overcapacity, which will continue to
put pressure on earnings throughout 2016.
Promising trading conditions aheadThe situation on the home front has
been, at times, challenging for the LNG
industry, but the 2016 BP Energy Outlook
paints a buoyant picture for the future of
the global market.
According to the report, LNG will play
an increasingly important role – LNG
trade is expected to grow twice as fast as
consumption, with LNG’s share of world
demand rising from 10 per cent in 2014 to
15 per cent in 2035.
Additionally, the report says over
40 per cent of the increase in global LNG
supplies is expected to occur over the next
five years, as a series of in-flight projects
are completed. This is equivalent to a new
LNG train coming on-stream every eight
weeks for the next five years.
By 2035, LNG is expected to surpass
pipeline imports as the dominant form of
traded gas. The growing importance of LNG
trade is likely to cause regional gas prices to
become increasingly integrated.
“The growth in LNG coincides with a
significant shift in the regional pattern
of trade. The US is likely to become a net
exporter of gas later this decade, while
the dependence of Europe and China
on imported gas is projected to increase
further,” BP says in its report.
Further, for the first time in five years,
EnergyQuest revealed that the value
of Australia’s oil and gas exports has
completely offset the cost of importing
crude oil, petrol and other petroleum
products.
EnergyQuest Chief Executive Dr Graeme
Bethune says the good outcome reflects
the growth in Australian LNG exports.
“Australia’s established LNG projects –
Woodside’s North West Shelf and Pluto and
ConocoPhillips’ Darwin LNG – have been
performing exceptionally well. Now the
three new Queensland projects have joined
that total LNG production flow,” Dr Bethune
says.
“Altogether, Australian LNG production
reached a record 9.1 MMt in the December
quarter 2015, up by 48 per cent from a year
earlier. Increased LNG production has offset
the fall in LNG prices resulting from the
slump in oil prices,” he adds.
Dr Bethune estimates that increased LNG
production improved Australia’s overall
trade balance by approximately
$500 million in December alone.
Employment opportunitiesAPPEA’s recently released LNG in
Australia: Prosperity, Innovation and Legacy
reveals that at the peak of construction
phase, LNG accounted for a third of
Australia’s business investment – creating
more than 100,000 jobs across the
Australian economy.
However, with construction having
already been completed on many major LNG
projects, there are many new opportunities
for Australian skills to be at the forefront.
In the same report, APPEA highlights the
local opportunities that will be available
during the operations phase of LNG plants:
» aviation, drilling and marine support
services based in regional centres
» supply, accommodation, catering and
maintenance services
» establishment and operation of marine
supply bases.
“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 online,” leading
engineering specialist Francis Norman says.
In its 2014 Local Content Report, Western
Australia’s Department of Commerce found
that WA LNG projects were awarding more
of their contracts to companies from WA
and other parts of Australia. For instance,
the Chevron-operated Gorgon LNG and
Wheatstone projects contracted 78 per cent
and 68 per cent respectively to WA
companies.
What lies ahead?According to APPEA’s recently released
LNG in Australia: Prosperity, Innovation
and Legacy, all LNG projects in Australia
are underpinned by decades-long supply
contracts and have long lifespans –
ensuring decades of tax and royalty
revenue for Australia as well as income for
numerous suppliers in the industry.
Even more promisingly, LNG export
revenue will increase and economic
benefits will become more pronounced
when the low oil prices eventually rebound.
The future looks bright.
Official LNG 18 Feature
GSP 2
REGISTER TODAY FOR ENERGY NETWORKS 2016Secure your place today at Energy Networks 2016 – Energy In Transition
The ENA is delighted to announce that The Hon Josh Frydenberg MP, Minister for Resources, Energy and Northern Australia, will be opening Energy Networks 2016, on Thursday 19th May.
This year’s conference will host key gas industry figures including Mr Ben Wilson from Australian Gas Networks and Mr Paul Adams from Jemena. This is in addition to keynote speakers Mr Basil Scarsella and Dr Lawrence Jones who will be joined by other leading international and domestic industry executives and practitioners.
Dedicated Gas Concurrent Sessions
The Energy Networks 2016 concurrent program includes dedicated Gas streams, as well as sessions on regulation, consumer engagement and innovation.
These streams will feature gas industry leaders and experts to critically examine how the sector is responding to technology changes and market trends and the implications for gas network managers, pipeline and asset management service providers.
Interested in exhibiting or sponsorship
It’s not too late too sponsor or exhibit at Energy Networks 2016.
For the remaining sponsorship and exhibition opportunities, visit the Sponsorship and Exhibition page of the website or call Helen McGowan at the Conference and Exhibition Office on D: +61 3 9907 8628 or E: [email protected] W: www.energynetworks2016.com.au
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Bay, near Port Moresby, allows us to explore
synergies with other projects.”
Project challenges Mr Blanchard says one of the foremost
challenges in getting the project up and
running is delivering a competitive project
amid the current gas environment.
“When you are dealing with multibillion
dollar developments like Papua LNG, you
need to be sure that you have optimised
the costs of your development as well
as the financing of your project and the
marketing of the gas.”
The second challenge Total faces is
overcoming the hurdle of providing energy
in a way that is efficient and acceptable
to both community members and key
stakeholders.
“We do recognise that it is a difficult
balance to strike, but it is our worldwide
mandate to be ‘committed to better
energy’.
“Local communities have huge
expectations from this project in terms
of impact – benefits, infrastructures,
employment – and they want it now.
However, it is going to take some time
before construction kicks off, revenues
are generated and full benefits reach
communities.”
Community consultation keyAs part of its obligations, Total has
launched awareness campaigns as well
as preliminary environmental and social
assessment processes to minimise the
impact on communities surrounding the
selected sites.
“We know that there are high
expectations for major projects in PNG,
so early stakeholders’ engagement and
awareness campaigns will be extremely
important to initiate from the beginning of
the project,” Mr Blanchard says.
“We need to be sure that the local
communities fully understand what a project
of this kind can realistically deliver, in terms
of its timing and its impact on them.”
As the Papua LNG project will take
years to complete, Total is set to
increase awareness campaigns and
foster discussions within surrounding
communities as the project progresses.
Both the Gulf and Central provinces
that will be home to the project stand to
benefit through jobs and training as well as
investment in infrastructure such as health
and education facilities.
Key development stages The timeline for the key development
stages of the project is linked to the end of
the appraisal project, which is still ongoing.
Total is currently drilling the ANT-6 well
and the joint venture is considering the
possibility of drilling another appraisal
well. It is currently using pressure mud cap
drilling (PMCD) and downhole deployment
valve (DDV) equipment to drill the reservoir
section while adhering to optimum safety
conditions.
“The more clarity we have on resources,
the better for project economics and
implementation,” Mr Blanchard says.
Although it is too early to say, Mr Blanchard
believes there may be additional unexplored
potential on the block.
PAPUA LNG CAME about after French energy
company Total acquired a 40.13 per cent
interest on licence PRL-15 from InterOil. The
joint venture comprises Total, InterOil and
Oil Search.
The central processing facilities for the
Elk-Antelope field, on which the Papua LNG
project is based, will be near the Purari
River in the Gulf Province – about 360 km
northwest of Port Moresby, and will be
connected to an LNG facility by onshore
and offshore gas and condensate pipelines.
Caution Bay near Port Moresby has been
selected as the site for PNG’s second LNG
plant, co-located with the existing PNG LNG
project’s export and liquefaction facility.
“It is an important acquisition that fits
well with our LNG strategy post-2017 and
is another opportunity for Total to grow
in Asia Pacific, following our participation
in Australian projects Gladstone LNG and
Ichthys LNG,” Total E&P PNG Managing
Director Philippe Blanchard says.
Total’s current focus is on finalising
the appraisal of the Elk-Antelope field to
determine the precise amount of resources
and to properly size the different facilities
before moving on to the front-end
engineering design (FEED) phase. In
parallel, development studies as well as
environmental and baseline studies are
progressing – following the selection of
main infrastructure sites in mid-2015.
Location, location Mr Blanchard says the selection of
Caution Bay and Purari River as the key
infrastructure sites came down mostly to
one factor: cost competitiveness.
“Both from technical and cost
perspectives, it made sense to select a
site on PRL-15 to host the upstream gas
facility that is close to the river. This limits
the logistics costs during construction and
production phases.
“The location of the LNG plant on Caution
An upcoming project in Papua New Guinea has been christened ‘Papua LNG’ in recognition of the importance that the Gulf and Central provinces play in the resources development of PNG.
PNG to host new LNG export project
PNG LNG Pipeline
(preferred route 340 − 360 km)
Papua LNG Pipeline
CENTRAL PROCESSING FACILITY
PNG LNG Project Facility
Proposed Papua LNG Project Facility
PORT MORESBY
Kerema
WESTERN PAPUAN BASIN
EASTERN PAPUAN BASIN
Commissioned gas pipeline Proposed gas pipeline
Proposed gas pipeline
KEY
Proposed gas pipeline
The selection of Caution Bay and Purari River as the key infrastructure sites came down to one factor: cost competitiveness.
– Total E&P PNG Managing Director Phillipe Blanchard
Left: Total is currently drilling the ANT-6 well.
Right: A sketch of the proposed Papua LNG Project’s footprint.
42 43Official LNG 18 Feature Official LNG 18 Feature
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network sits at around 510,000 km. More
than 20 per cent of annual gas sales can be
stored in underground storage reservoirs
over a period of a month, or even years.
Given this existing capacity, surplus
power from renewable energy sources can
be used to power hydrogen electrolysis and
feed hydrogen directly into the natural gas
grid.
“The only method to store this amount
of power is to convert it into a chemical
substance – hydrogen – which we can
then inject into the gas grid, or convert into
methane,” Dr Linke says.
“Our grid, the transmission compressor
units, underground storage facilities and
gas appliances are capable to operate with
different gases. A blend with 2 per cent,
or even up to 10 per cent hydrogen, is
unproblematic. Higher hydrogen production
rates can be absorbed as well if we convert
hydrogen to methane.
"For this process carbon dioxide is
used – preferable to renewable sources like
biomass. That means that you can store an
enormous amount of energy in the natural
gas grid.
"Generally speaking, the storage capacity
is sufficient to integrate the entire power
HOW CAN GAS contribute to a low-emission
future?
This is a question often asked by
industry and politicians alike, and one
which is driving a variety of technological
innovations to achieve this goal.
Power-to-gas is one of these exciting new
developments, which is beginning to flex its
power throughout the European Union.
An energy process and storage
technology utilising existing natural gas
network infrastructure to store electricity.
The technology turns excess electricity,
generated from renewable energy sources
such as solar and wind, into renewable
hydrogen gas through electrolysis of water.
This effectively enables the storage of
renewable power in the gas grid – a critical
issue for renewable generation.
Efficiently utilising existing infrastructure
Dr Linke, an expert in the technology,
says the unpredictability of renewable
power generation leads to increasing
uncoupling between power production
and consumption and, as a result,
the development of effective storage
technologies is of increasing importance.
This is where existing natural gas
infrastructure can come in.
By way of example, existing infrastructure
in Germany has enormous storage capacity
available, due to the country’s huge gas
consumption.
According the German Ministry for
Economic Affairs and Energy, natural gas
accounts for approximately 20.5 per cent of
the nation’s primary energy consumption,
with overall consumption of 85 Bcm in 2014,
while the total length of the German gas
The conversion of renewable energy into gas is an exciting new technology, currently making ground in European markets. Gas Today speaks to the Chairman of the German Technical and Scientific Association for Gas and Water, Professor Dr Gerald Linke, about developments in this emerging field, and what this could mean for Australia’s networks.
Germany’s gas and renewables integration: what can we learn?
Innovation and new technologyInnovation and new technology
Power-to-Gas TechnologyA breakthrough in the natural energy market
Methanation
WIND SOLAR
H
HHCH
+ -
BIOMETHANE GAS STORAGE
Biomass
The hydrogen and carbon are converted to methane in an exothermic reaction
ElectrolysisSplits water into its hydrogen and oxygen components
Green energyCan be drawn fromdifferent sources
BiomethaneThe acquired sythetic methaneis fed into the gas grid or stored in tanks, thereby offering a constant energy supply
Consumer
Left: Dr Gerald Linke.
Left: This E.ON power-to-gas (P2G) pilot plant, located at Falkenhagen, eastern Germany, injects more than 2 million kWh of hydrogen into natural gas pipeline system i. E.ON is currently building a second P2G pilot unit in Reitbrook, a suburb of Hamburg. The purpose of this unit is to optimise the transformation process by means of more compact and efficient electrolysis equipment.
Above: Power-to-gas technology, which is being piloted in the EU, has the ability to transform the energy landscape for countries like Australia.
IGU committee visits E.ON facilityOne of the issues faced by the gas industry is effectively communicating technological innovations and developments, such as power-to-gas technology, that its researchers develop.
Therefore it was a great achievement to see the International Gas Union’s Marketing & Communications committee visit the E.ON pilot plant in Falkenhagen, Germany.
E.ON hosted 12 members of the committee at its site, and explained the importance of the technology to the energy revolution – otherwise known as the Energiewende – currently underway in Germany.
The trip was part of the broader committee’s meeting in Berlin, Germany, in February 2016.
For more information on the IGU please visit www.igu.org
Above: Members of the IGU Marketing & Communications committee, led by Committee chair Barbara Jinks (third from left), visit the E.ON plant in Falkenhagen, Germany.
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47Exploration and production
production from wind energy of more than
30 GW installed capacity. Therefore, the
natural gas grid can become the backbone
of the power grid. This is what we call the
convergence of two systems, or sector
coupling, so coupling of the power sector
with the gas sector.”
Power-to-gas: energy storage for the future
“Many people believe we will still
have natural gas in the system, despite
government targets for 80 per cent
renewables in 2025. And it is not a
contradiction, given every energy system
needs storage options and since power-to-
gas is the path of step-wise decarbonisation
of the gas industry,” Dr Linke says.
“In addition, further options to improve
the carbon footprint of the gas industry and
to safeguard its role as a pillar of the future
energy system is to increase the production
of renewable gases from biomass.
“We have installed more than 8,000
biogas plants in Germany. The latest
installations do not only provide the option
to produce power from gas turbines but offer
also the possibility to upgrade the gas to
natural gas quality and to inject and storage
it in the distribution or transmission grid.”
The original power-to-gas projects are
now around two years old, and presently
Germany has more than 20 projects
underway.
“The energy they produce is marginal
compared to the gas demand in Germany at
the moment. However, the idea is that future
energy efficiency will see the demand for
gas decline, that 10-15 per cent of traditional
gas will be substituted by biomethane and
an additional 10-15 per cent by hydrogen, so
that a big share can come from renewable
energy,” Dr Linke says.
“If you also develop a strategy where
oil is replaced by natural gas or LNG for
heavy duty trucks, then the entire potential
for decarbonisation in transportation and
mobility is enormous, and that means we
can really exceed these targets. Indeed, our
next research and demo project is targeting
the area of small-scale LNG appliances in
transport.”
Gas as a pillar of the energy systemDr Linke says a big driver of the
technology is that if governments want
to increase the share of renewables in the
energy mix, given the fact that renewables
are unpredictable and the production of
renewable energy is fluctuating
and random, reliable storage capacity is
needed.
Further, any significant increases to the
share of renewable energy within the entire
power system would effectively de-stabilise the
system, hence the need for sector coupling.
Therefore, the overall cost of an
integrated system would be lower than
running two systems in parallel, which is the
traditional approach.
This approach now means that the
renewable terminology not only applies
solar and wind, but also the creation of gas
which can be put back into pipelines as
storage.
Much like a gigantic renewable energy
storage unit, which Dr Linke says will help
secure the place of gas in the future energy
mix.
“This is how we believe the natural gas
industry can prosper, delivering the carbon
dioxide reduction targets to the politicians
while keeping gas as a pillar of the entire
energy system.”
Innovation and new technology
IN A PERIOD of rapid growth, it is essential
that Australia’s vast gas resources are
developed fast enough to keep up with
demand, both domestic and international.
With the opening up of Australian
gas to international markets through
the establishment of the country’s LNG
export sector, conventional producing
regions, unconventional gas development
and innovative exploration will become
paramount to opening critical new supply
channels.
According to the Australian Energy
Market Operator’s (AEMO) 2015 Gas
Statement of Opportunities report, analysis
indicates that sufficient commercially viable
reserves and resources are available to
satisfy projected gas demand for at least
the next 20 years.
However, to ensure that gas consumption
can be met, new gas reserves need to be
developed.
With more than 40 onshore and offshore
basins awaiting in-depth exploration to
determine their full potential, according
to the Federal Department of Industry,
Innovation and Science, there are plenty of
opportunities.
With international LNG exports and domestic consumption increasing the demand for Australian gas, significant opportunities exist for the local sector. Gas Today takes a look at what will be driving the next wave of exploration and development.
Australia’s gas exploration and production opportunities
Above: The Cooper Basin in SA is a key opportunity for onshore exploration. Source: Santos.
Key Developing basins » Outer Exmouth Basin (Western
Australia)
» North Perth Basin (Western Australia)
» Eyre Basin (Western Australia)
» Deep water offshore Gippsland Basin (Victoria)
» Deep water Otway Basin (Victoria)
» Sorrell Basin (Tasmania)
HP ad 5Valentine Public Relations
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49
AT A TIME when volatile commodity prices
are putting the crunch on new projects in
the Australian gas industry, a development
such as Charlie is a welcome investment.
According to EnergyQuest’s December
2015 Quarterly, Australian LNG production
overall reached a record 9.1 MMt in the final
quarter of 2015, up 48 per cent from a year
earlier. This increased Australia’s overall
trade balance by approximately
AU$500 million in December alone.
With all three of Queensland’s LNG
projects – Australia Pacific LNG (APLNG),
Santos GLNG and Queensland Curtis LNG
(QCLNG) – now exporting from Curtis
Island, developing new gas supplies for the
nation’s energy mix is essential.
In line with this rising demand for gas,
BG Group subsidiary QGC, along with
its joint venture partners in the Charlie
development, China National Offshore
Corporation (CNOOC) and Tokyo Gas, plans
to build on work undertaken in Phase 1
of the joint venture’s QCLNG Project by
developing its natural gas tenements in the
Surat.
The new two-year development, which
will take place near the regional Queensland
towns of Taroom, Wandoan and Chinchilla,
commenced construction in November 2015
and is scheduled to be completed by the
third quarter of 2017, with infrastructure
including:
» Up to 342 wells
» Approximately 725 km of water and gas
gathering pipelines
» A 240 TJ/day field compression station
(Charlie FCS)
» A 35 km water trunkline and one 35 km
gas trunkline, co-located in the same
trench
» A 35 km high-voltage overhead
power line, running parallel with the
trunklines
QGC’s AU$1.7 billion Charlie development in the Surat Basin represents a significant new investment for Queensland’s gas industry, following the successful start-up of the state’s three LNG production facilities in late 2015.
QGC’s Charlie: A vote of confidence in Queensland
48
So, where are the new areas being
developed by explorers and producers?
ONSHORE OPPORTUNITIESAustralia’s gas market has changed
dramatically from the isolated and declining
east coast domestic market of 2000.
Increased exploration and development
activity to fuel Queensland’s three
exporting LNG plants – Australia Pacific
LNG (APLNG), Santos GLNG and Queensland
Curtis LNG (QCLNG) – along with improved
pipeline connections between natural gas
resources and their markets, have resulted
in a fundamental shift to market demand
for gas.
As a result of this shift, exploration for
hydrocarbons in unconventional reservoirs,
such as shale and tight gas, alongside
conventional gas resources, are continuing
to be an important onshore exploration
target for Australia’s gas industry.
Geoscience Australia has stated that
key opportunities for onshore exploration
include:
» Cooper Basin (Queensland/South
Australia)
» Canning Basin (Western Australia)
» Georgina Basin (Northern Territory)
» McArthur Basin (Northern Territory)
The Cooper Basin is presently Australia’s
largest onshore conventional gas and oil
producer, and it has seen a strong revival
in unconventional exploration targeting
Permian plays in recent years.
Key players in the basin include Santos,
Origin Energy, Beach Energy, Drillsearch
and Senex Energy, supplying markets in
South Australia, New South Wales and
Queensland from over 160 gas fields
situated in the basin.
Meanwhile, the NT’s McArthur Basin,
flagged as Australia’s answer to the shale
gas boom in the United States, has so far
seen limited exploration, due largely to its
remote location and limited infrastructure.
However, the likes of Santos, Origin and
INPEX have shown interest in the basin,
while the Northern Gas Pipeline, linking the
NT to the east coast gas market, is likely to
attract further investors.
Unconventional resourcesAccording to the Council of Australian
Government’s (COAG) Energy Council Gas
Supply Strategy, over 40 per cent of the gas
which flows to consumers in the eastern
market comes from CSG, with 98 per cent of
this CSG coming from Queensland.
The CSG reserves also support the
significant investment in Queensland’s
LNG industry, while the role of gas from
unconventional reservoirs is set to grow,
with eastern Australia’s CSG resources
being 4–7 times larger than conventional
resources in the region.
Key players in unconventional gas
exploration include Beach Energy, Origin
Energy, QGC, Santos, Senex Energy and
Strike Energy.
OFFSHORE POTENTIALWhile oil and gas discoveries in
Australia’s offshore basins have been
concentrated on the North West Shelf
(which includes the Northern Carnarvon,
Browse and Bonaparte basins), and Bass
Strait (featuring Gippsland, Otway and
Bass basins), and Bass Strait, featuring
the Gippsland, Otway and Bass basins,
discoveries outside of these areas
have continued to present incredible
opportunities for the Australian industry.
According to the Department of Industry,
approximately 95 per cent of Australia’s
petroleum production comes from offshore
basins.
As of 2015 – nearly 60 years after the first
Australian exploration permit was granted
in 1959 in Victoria’s Gippsland Basin – there
were 189 offshore exploration permits,
58 retention leases and 92 production
licences in operation in offshore basins.
However, with only around 20 per cent of
Australia’s offshore basins currently covered
by petroleum titles, explorers remain
primarily focused on finding resources close
to existing discoveries.
The basins to watchA Geoscience Australia spokesperson told
Gas Today that for significant discoveries
to be made in offshore Australia, the
petroleum exploration industry will need to
move away from the established producing
areas into the frontier regions, including
deeper water and geographically remote
areas.
The offshore continental ribbons of
the South Tasman Rise off southern
Tasmania and the Lord Howe Rise, offshore
southeastern Australia, have also been
singled out.
“In addition, the petroleum exploration
industry will need to look at basins with
known petroleum occurrences in new
ways, to discover new play types,” the
spokesperson said.
Given the costs involved with developing
these remote basins, as well as the
technological challenges in offshore
exploration, industry appetite for these
areas remains low.
Geoscience Australia has indicated that
while a number of basins are currently
considered to have moderate levels
of prospectivity, industry confidence
could improve with more data becoming
available.
REALISING THE FULL POTENTIALThe International Energy Agency (IEA)
has forecast that global demand for gas
will increase by 50 per cent between now
and 2040. Therefore, linking Australia’s
domestic and international gas markets has
presented a unique opportunity to further
develop the nation’s gas resources.
The IEA’s 2015 Medium-Term Gas Market
Report suggests Australia’s gas production
will accelerate at an average of almost
15 per cent per annum between 2014–2020,
due to major LNG projects coming online,
eventually overtaking Qatar as a world
leader in LNG production.
In line with this outlook, exploration of
established and frontier basins to meet
this demand will be critical to ensure
Australia’s gas industry reaches its full
potential.
Exploration and productionExploration and production
Above: Workers at a QGC site.
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5150 EXPLORATION AND PRODUCTIONEXPLORATION AND PRODUCTION
Left: The AU$1.7 billion Charlie development is part of the continuous development of QGC’s tenements in Queensland’s Surat Basin.
CHARLIE GAS DEVELOPMENTDevelopment cost: AU$1.7 billion
Partners: BG Group, China National Offshore Oil Corporation (CNOOC) and Tokyo Gas
Development area: 123,500 hectares
Location: 20 km west of Wandoan and 40 km southwest of Taroom
Timeframe: Two years; Q4 2015 – Q3 2017
Employment opportunities: Up to 1,600 jobs anticipated at peak of construction in 2016
Infrastructure design life: 20 years
» Two produced water storage ponds
(Charlie and Phillip) and a pumping
station at each pond
» Supporting infrastructure such as
access tracks, a borrow pit and laydown
areas.
Building on the success of QCLNGNamed after the graticular section of
the block on which the largest part of the
development will take place, the Charlie
development is seen as a vindication of
the broader QCLNG’s project’s earlier
exploration and production successes – but
also as a critical new supply channel for a
project that is exporting a lot of gas.
The overall QCLNG project was first
commissioned in December 2014, with
commercial operations from its second train
commencing in November 2015.
Both of the project’s trains are expected
to reach plateau production by mid-2016,
producing enough LNG to load around
ten vessels per month combined, or the
equivalent of around 8 million tonnes
per year.
The new infrastructure at the Charlie
development will be linked to facilities that
were developed as part of Phase 1 of the
QCLNG Project, including gas and water
processing facilities.
Water produced from wells will be
processed at the Northern Water Treatment
Plant at Woleebee Creek, before being
transported via SunWater’s 120 km
Woleebee Creek to Glebe Weir Pipeline,
which is capable of moving up to
36,500 ML/a of treated CSG water.
QGC’s existing central processing plant,
water treatment plant and electrical
substation at Woleebee Creek will also be
used to process the gas, treat the water
produced and provide electricity to run
Charlie field compression station.
BUILDING ON THE SUCCESS OF QCLNGThe Charlie development is the latest phase for the QCLNG Project, which has achieved a number of impressive milestones over the past few years.
Some highlights have included:
December 2014: The project
achieves a world first, producing
LNG from CSG.
January 2015: The first cargo of
LNG is exported from the project.
May 2015: Control of Train 1 of the
LNG plant is formally transferred to
QGC from construction contractor
Bechtel Australia.
July 2015: First LNG is loaded from
the second production train.
November 2015: Charlie is
announced as the latest phase in
the project.
Charlie project area
CHARLIE FIELDCOMPRESSION STATION
QGC central processing plant
QGC field compression station
QGC-owned land
Main road
Gas trunkline
Power station
Water trunkline
Power network
CPP
FCS
FCS
WOLEEBEE CREEK
WANDOAN
CPP
GLADSTONE
BRISBANE
ROMA
TAROOM
WANDOAN
CHINCHILLA
Charlie Project AreaQCLNG PHASE 1
A vote of confidence in the regionQGC Managing Director Tony Nunan said
Charlie was an important investment in the
future of QGC's operations, with up to 1,600
jobs expected to be created during peak
construction in mid-2016.
“This is a vote of confidence in the
secure, long-term future of Queensland's
natural gas industry, which will employ
Queenslanders for many years to come,”
Mr Nunan said.
BG Group spokesman Paul Larter added
that a range of opportunities will be
available for local contractors.
“This development will help sustain
the benefits of our investment in local
communities and the state,” he said.
“Major contractors have made
commitments regarding local content.”
Much of the local content opportunities
for Charlie will be made available through
contractors such as CIMIC Group subsidiary
CPB Contractors, formerly Leighton
Contractors, which was appointed as the main
works contractor in early November 2015.
The project is expected to generate
revenue of approximately AU$250 million
to CPB over 18 months. Local contractor FKG
Group, based in Toowoomba, has been an
early local contractor winner, having been
awarded an AU$16 million contract to widen
a local road to prepare for the construction
phase.
CIMIC Executive Chairman and Chief
Executive Officer Marcelino Fernández
Verdes said “QGC’s ongoing development
of its world-class natural gas reserves
is making a major contribution to the
Queensland economy and growth of the
LNG industry in Australia.”
Major contractors have made commitments regarding local content.
- BG Group spokesman Paul Larter
Below: The two-train QCLNG Project includes a 340 km, 1,066.8 mm export pipeline from Wandoan in the Surat Basin to northeast of Gladstone, as well as the export terminal on Curtis Island, which has an initial production capacity of approximately 8.5 MMt/a.
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53Projects
ARROW ENERGY - A BRIEF HISTORY1997: Arrow Energy is formed
March 2000: Granted its first Surat Basin tenure – ATP-683
August 2000: The company lists on the Australian Stock Exchange
March 2002: First petroleum lease in the Bowen Basin, granted PL-191
September 2004: First gas is sold from the Moranbah Gas Project in the Bowen Basin
January 2006: Arrow becomes the first company to drill for and sell CSG from the Surat Basin with gas from the Kogan North Project
January 2009: Royal Dutch Shell acquires a 30 per cent interest in Arrow’s upstream tenements
August 2010: Shell and PetroChina form a 50/50 joint venture to acquire 100 per cent of Arrow, with the aim of developing a CSG-to-LNG project, the Arrow LNG Project
January 2015: Shell Chief Executive Ben van Beurden says the Arrow LNG Project is “off the table”, citing a slow-down on new developments
January 2014: After encountering issues with surging costs and landholder management, Arrow cuts 600 jobs amid claims the standalone project will not proceed
Late-2015: Arrow postpones development plans for its Bowen Basin tenements (comprising the Bowen Gas Project and Arrow Bowen Pipeline)
A 50/50 JOINT venture partnership between
Royal Dutch Shell and PetroChina, Arrow
produces CSG from fields in the Surat Basin
in southern Queensland and the Bowen
Basin in central Queensland.
With about 1,200 CSG wells, the company
supplies the Townsville, Daandine, Braemar,
Braemar 2 and Moranbah power stations,
as well as industrial users in Townsville and
Moranbah, while its exploration tenements
cover approximately 21,000 sq km across
Queensland.
The company has previously proposed
developing a 400 km high-pressure steel
pipeline to bring CSG from the Bowen Basin
to a gas hub 22 km northwest of Gladstone.
However, the company’s assets in the
Bowen Basin, which contain deeper and
tighter coals than the company’s holdings in
the Surat Basin, have presented a number
of production challenges, resulting in the
decision to delay its development plans in
the region.
“Horizontal wells are needed to achieve
the required production rates, and the
recent wells are not performing as expected
at this time,” an Arrow Energy spokesperson
told Gas Today.
“Additional work is required to underpin
value in Arrow’s investment proposal to
shareholders on the Bowen Gas Project and
the Arrow Bowen Pipeline.
“Until it is completed, the impacts on
project schedules are unknown.”
The Arrow Bowen Pipeline moved into
the front-end engineering design (FEED)
phase in December 2014, with engineering
services firm WorleyParsons awarded the
FEED contract.
Meanwhile, Arrow is undertaking
additional work to underpin an
economicallysound investment proposal
to shareholders on both the Bowen Gas
Project and the Arrow Bowen Pipeline, with
development options for Arrow’s Surat
Basin gas reserves also being progressed.
Watch this space.
In late 2015, production challenges led to Arrow Energy’s decision to delay its upstream Bowen Basin development. Now, all eyes are on what the company will do with its massive CSG reserves in Queensland as it reduces its operational footprint in Australia.
Commercialising Arrow's mammoth CSG reserves
Exploration and production
Above: A map of the proposed Arrow Bowen Pipeline route. Source: Arrow Energy.
MORANBAH
ROCKHAMPTON
LIVINGSTONE SHIRE
MACKAY REGIONAL
ISAAC REGIONAL
WOORABINDAABORIGINAL
SHIRE
CENTRAL HIGHLANDSREGIONAL
ROCKHAMPTONREGIONAL
BANANA SHIREGLADSTONEREGIONAL
BLACKWATER
GLADSTONE
MT MORGANBajool
Glenroy
Curtis Island
May Downs
Dysart
Marlborough
Local Government Boundary
Highway
Town
Major Town
ABP Alignment
SGIC Corridor
WITH QUEENSLAND’S THREE CSG-to-LNG
projects now exporting LNG it’s easy to lose
sight of how impressive these developments
are.
The gloomy backdrop of low oil prices
overshadows the fact that this is a ‘new to
the world’ industry that has been created
in Queensland and what has been learnt
here will be extremely important for future
unconventional gas to LNG projects around
the world.
These three projects – the Australia
Pacific LNG (APLNG) Project, Santos
GLNG Project and Queensland Curtis LNG
(QCLNG) Project – with a combined cost of
over AU$70 billion dollars, are large and
technically complex by comparison to any
project, and yet they have been fairly close
to being on time and on budget.
While some analysts have criticised the
projects for not meeting their target costs
and schedule, these delays and overruns
are relatively minor compared with other
megaprojects.
For example, the typical cost overrun
for rail projects is nearly 50 per cent and
around 30 per cent for bridges and tunnels.
However, in time, we will see the three
Queensland LNG projects as landmark
developments in an industry that is
renowned for managing complex projects.
Reducing cost riskThere is always a close relationship
between business challenges and
innovation, and Australia’s CSG-to-LNG
projects are no exception.
Over the past five years University of
Queensland (UQ) has written case studies on
a number of innovations such as the pipeline
installation system, the Spiderplough, and
drilling processes that have dramatically
increased the productivity of well crews.
UQ is currently researching new
techniques in drilling that could
significantly decrease the cost of well
production.
While the owners of these projects
will conduct their own ‘lessons learned’
processes at the conclusion of construction,
UQ’s research points to some success factors
that are relevant for the industry and the
delivery of large projects in general.
In collaboration with Ernst and Young
and the Australian Petroleum Production
and Exploration Association (APPEA), the
university conducted surveys of the industry
in 2012 and 2014.
These surveys included project owners,
producers and contractors through the
supply chain, resulting in one of the most
detailed surveys of a region of the oil and
gas sector in the world.
In this 30-minute survey, questions
focused on around 200 different variables
and how they related to performance. What
the data showed was that there were three
very clear drivers of performance and that
these were consistent across the supply
chain.
The first of these was being able to
manage innovation and change in the
project. Innovation may be a frightening
concept to many projects, but the capacity
While Australia’s LNG projects have faced various delays and cost overruns, compared with other megaprojects these have been relatively minor for Queensland’s three LNG projects. University of Queensland Associate Professor John Steen takes a look what lessons we can learn from these developments.
Left: UQ Associate Professor John Steen.
Right: An aerial view of the QCLNG project on Curtis Island. Source: QGC, 2016.
LESSONS TO BE LEARNed FROM PROJECT COST OVERRUNS
UQ has seen instances of the introduction of new technology in welding to overcome labour shortages that threatened to delay construction, and also dramatic rethinking of well production and commissioning schedules to ensure the availability of gas.
gastoday.com.au |AUTUMN 2016 gastoday.com.au | AUTUMN 2016
54 55
to respond to challenges as they emerge in
a project is critical for success.
UQ has seen instances of the introduction
of new technology in welding to overcome
labour shortages that threatened to delay
construction, and also dramatic rethinking
of well production and commissioning
schedules to ensure the availability of gas.
These findings are interesting because they
echo similar studies of other megaprojects
such as the Cross Rail tunnel in London.
The second major driver of performance
was collaboration. This includes horizontal
collaboration such as sharing infrastructure
or having common prequalification
processes for contractors.
When this result was first presented with
Ernst and Young to an executive briefing
in 2013, collaboration was very rare, but
as cost pressures have increased there
have been more examples of positive
collaboration in the industry.
Linked to collaboration was evidence
about the importance of appropriate
contracting strategy. A common approach
to managing the supply chain in large
projects is to endeavour to transfer as much
risk as possible onto the supply chain for
the lowest price.
While that might work for simple projects,
there is overwhelming evidence that
contracting strategy needs to be a lot more
sophisticated with careful consideration of
the behaviours that arise from contracts.
Something that is especially important
is the sharing of risks and outcomes so
that solutions to unforeseen problems can
be developed collaboratively rather than
through costly and time-consuming legal
channels.
The final factor uncovered from the
survey was deepening competitive
capabilities. Businesses that focused on
core capabilities and deepening expertise
to drive performance were also productivity
winners.
Core lesson is agilityWhen we step back and look at these
three success factors there is an underlying
theme: agility.
These are large projects that are delivered
over several years. Planning matters, but
no plan is complete enough to foresee all of
the challenges and changes that will occur
in a venture of this scale.
The next phase of the research is to
look at how significant shifts occur in the
delivery of oil and gas megaprojects.
In other words, what are the conditions
that enable a large project to pivot to
capture a cost-saving opportunity or avoid
an emerging schedule delay? The results of
this work will be reported in 2017.
Over the next few years, there will be a lot
of lessons learned from the delivery of these
projects and the creation of a new export
industry.
To read more on the study, visit uq.com.au
PROJECTSProjects
Key drivers of performanceA survey conducted by the University of Queensland, in collaboration with Ernst and Young and APPEA revealed the following to be key drivers of performance across the supply chain:
» Ability to manage innovation and change in a project
» Collaboration and an appropriate contracting strategy
» Deepening competitive capabilities
A CRITICAL PART of developing the Northern
Territory’s gas infrastructure network has
been connecting the Ichthys Project to
existing gas facilities in the Territory.
In December 2014, Power and Water
Corporation NT awarded McConnell Dowell
a contract to design, procure, construct
and commission metering skids and an
interconnecting 12 inch pipeline for gas
transmission between the existing Wickham
Point Pipeline and INPEX’s gas plant at
Blaydin Point in Darwin.
Not only will the pipeline provide gas to
the Ichthys Project, but it will also provide
a means of emergency gas supply for
Territorians, according to McConnell Dowell
Project Manager David Bird.
Design work for McConnell Dowell
commenced in December 2014, and
construction was complete in November
2015. Commissioning of the facility and
pipeline is scheduled to commence shortly.
Local contractorsOf strong concern to gas industry
operators and contractors operating in
the Northern Territory is the successful
engagement of local contractors, so to
ensure a legacy for Territorians after
construction has subsided.
“McConnell Dowell used many local
subcontractors in Darwin during the
construction, and the detailed design and
procurement of the skids was undertaken
in Melbourne. Although we looked
internationally we ultimately selected a
Melbourne company, Furnace Engineering,”
said Mr Bird.
According to Mr Bird, overwhelmingly
skids are produced in Asia, and are
less frequently produced locally. Local
Darwin subcontractors were used for pipe
fabrication, civil work and electrical work.
In addition to sourcing local contractors,
Mr Bird says that McConnell Dowell was
also able to use local employees rather than
employ FIFO workers.
“Darwin has been great; there is a very
good depth of talent here. There's been
so many mining jobs around over the last
10 or 15 years, so there are plenty of good
tradesmen,” said Mr Bird.
New direction for the pipelineAccording to Power and Water
Corporation’s Construction Supervisor
Peter Darby, having the company own
its own pipeline is a new direction for the
organisation.
“The majority of the gas network
[infrastructure] in the Northern Territory
is not owned and operated by the
government; Power and Water own the gas
and get it transported by others to the user.
In the case of this pipeline, it was slightly
different – we made a strategic decision to
own the asset.”
For McConnell Dowell, the innovation was
around optimising the design, manufacture
and construction of the skid to ensure a
cost-effective project.
“I think actually ending up with one
skid that was transportable by road was a
great outcome of this process. When you
talk about transporting a skid across the
country, or from overseas, is a difficult
operation,” said Mr Darby.
“One of the first things we did on this
job was have a design workshop in the
boardroom of McConnell Dowell's office
down in Melbourne. So we got Power and
Water down from Darwin, and we got
Furnace Engineering and Aurecon in as
Power and Water Corp.'s designers, and
from there we reviewed all the different
disciplines over a whole day and really
nutted it out. This collaboration yielded
immediate benefits.”
Another innovation for the project was in
logistics.
“For McConnell Dowell, a critical part of
the job was ensuring the constructability
suits the timeline of the dry season. The
whole operation was programmed to
complete construction, start to finish, in one
dry season.”
Working with a live gas siteAnother big area of focus for McConnell
Dowell and Power & Water Corporation was
working in a live gas environment.
“I couldn't underestimate the
requirements of working in a live gas
environment,” says Mr Darby.
There's high risks involved, seconds
Mr Bird, tying into a pipeline that's a live,
active pipeline that was built 10 years ago.
“A lot of the work McConnell Dowell did
was about building relationships as well,
with our owner team and also with all
affected stakeholders,” said Mr Darby.
Mr Bird concurs. “A big ticket item
that McConnell Dowell has been able to
bring to this job – and I think it actually
is McConnell Dowell's strength – is the
engagement and upskilling of smaller
local subcontractors who may not have all
the requisite safety procedures up to the
standard required to comply with the oil
and gas industry.
“However, we've been able to tap
into the local subcontractor skills and
capacity by providing management
system and processes assistance and
working collaboratively to anticipate and
resolve issues before they occur. This has
been a win-win for all parties involved.
An example is the use of McConnell
Dowell templates for Safe Work Method
Statements.
“It becomes their document, and
therefore we have upskilled that company.
Our civil contractor is a great example of
that here, and he's really embraced it and
adopted it, he's been a great success story
and we look forward to other opportunities
to work together.”
The Northern Territory is without doubt the biggest area of focus for Australia’s pipeline industry, with the announcement of the Northern Gas Pipeline and the looming completion of one of Australia’s largest LNG export projects, INPEX’s Ichthys LNG Project.
McConnell Dowell completes NT pipeline and facilities work
gastoday.com.au |AUTUMN 2016
56
gastoday.com.au | AUTUMN 2016
57
The recent opening of the small but mighty $13.9 million Wadeye Gas-Fired Power Station, located in the Northern Territory, has been praised by locals who had grown tired of the costly and pollutant diesel power station which stood in its place.
EventsProjects
Good things come in small packagesLOCATED IN THE NT town of Wadeye, which
has one of the largest remote Aboriginal
communities in the country, the power
station has a capacity of 1.3 Bcm/a. Its
installed general capacity (including
redundancy) is:
» 2 x 2 MW
» 1 x 1.7 MW
» 1 x 1.2 MW.
Power and Water Remote Operations
designed and constructed the pipeline,
using local state and community resources.
Cummins Engines constructed the
gas generating sets, while APA Group
constructed and now operates the gas
lateral pipeline and the letdown skid.
Planning for the project commenced
in 2006 when project proponent Power
and Water Corporation determined that
the former diesel-powered Wadeye Power
Station could no longer meet the needs of
the growing population in the local region.
The old diesel power station had reached
the end of its life and was costly to run.
With the Wadeye Gas-Fired Power Station
now fully operational, the former diesel-
powered station will be decommissioned
over the dry season.
Local and environmental benefitsNT Minister for Essential Services Willem
Westra van Holthe said the major capital
works project has the capability to supply
power to more than 1,600 homes and
businesses.
“It will service the Wadeye community for
up to 40 years and will in the future also
supply Nganmarriyanga (Palumpa) and
Peppimenarti through the grid connection,
ensuring residents have access to a reliable
electricity network, which has the capacity
to support future economic development.
“Environmental benefits will also flow
through, with the new station fuelled
through a supply pipeline which has been
connected to the main Black Tip gas line,
removing the need for diesel generation in
the Wadeye community.”
Power and Water Corporation Chief
Executive Michael Thomson said the
remote location meant both projects had
faced many challenges. Land access, town
planning, stakeholder and diplomatic
considerations, the wet season, cyclones
and fires were all factored into the
construction process and timeline.
“It is a testament to the staff at the Power
and Water Corporation that these projects
were completed on time and on budget,”
Mr Thomson said.
“The hard work will also go a long
way towards our goal of halving diesel
consumption in communities by 2020.”
The project was formally opened in
November 2015.
Left: Traditional dancers officially welcomed the power station which began operating in Wadeye in November. Source: ABC News: Sally Brooks.
With the Wadeye Gas-Fired Power Station now fully operational, the former diesel-powered station will be decommissioned over the dry season.
ORGANISED BY THE industry, for the industry,
this is the southern hemisphere’s largest oil
and gas conference. It will attract thousands
of participants and visitors from around
Australia and across the globe. Senior
executives and leading analysts will discuss
the major issues confronting the oil and gas
sector in this challenging era.
APPEA Chairman Bruce Lake says the
APPEA Conference and Exhibition remains
the best forum for examining the issues
currently facing the upstream petroleum
industry, and tough times make the event
more important than ever.
“The best companies use hardship as a
catalyst for innovation and forming new
partnerships,” Mr Lake said. “Hence the
conference theme – ‘Competing for
growth’.
“At APPEA 2016, industry professionals
can network, do business, share ideas and
learn about new technologies and case
studies that point the way forward.”
The conference will examine oil and
gas projects, technologies, trends and
opportunities across Australia. International
experts and local industry executives will
provide up-to-date analyses, case studies
and technical know-how on the big issues.
In addition, politicians, executives and
analysts will discuss policy concerns and
opportunities for reform.
“This is our strongest platform for
conveying the industry’s key messages
to politicians and the media,” Mr Lake said.
Key plenary sessions at APPEA 2016
include the opening session, which has a
focus on the conference theme, Competing
for Growth. This plenary will feature high-
powered addresses from the Queensland
and Federal governments, highlighting their
roles in facilitating the industry’s growth
and plans for the future.
The Tuesday morning plenary, The Future
of Energy, will examine how changes in
global energy markets are creating threats
and opportunities for oil and gas producers.
Speakers include:
» Woodside Chief Executive Peter
Coleman
» University of Western Australia
Professor Peter Hartley
» McKinsey Managing Partner John
Lyden
» KPMG US National Sector Leader for
Energy Regina Mayor.
The Wednesday morning plenary –
Technology and Innovation – will examine
how technological change is reshaping
energy production, and how innovation
can help the oil and gas sector boost its
competitiveness.
The closing plenary – at 2:30pm
Wednesday – is a panel discussion on
stakeholder engagement. This is one of the
key issues and main pressure points for
the oil and gas industry. APPEA expects a
particularly strong turnout for this session.
Speakers include GasFields Commission
Queensland Chairman John Cotter; Oil
Search Managing Director Peter Botten; and
Broadspectrum Limited Chairman Diane
Smith-Gander.
The concurrent sessions will also provide
plenty of interest. Concurrent presentations
include:
» AWE General Manager, Exploration and
Geoscience Neil Tupper on the Perth
Basin’s Waitsia field (Monday 2:00pm)
» Wood Mackenzie Australasia upstream
oil and gas research analyst Saul
Kavonic on the The death of Australian
LNG - and how to bring it back to life
(Tuesday 3:45pm)
» Oil Search Executive General Manager,
Exploration and New Ventures Keiran
Wulff on PNG’s untapped potential
(Wednesday 11:15am)
The Wednesday morning session, Market
developments and the fall of the global
oil price will examine: the US influence on
global oil and gas prices; changes in LNG
sales and marketing; pressure for LNG price
reviews; and the impact of LNG on the
eastern Australian gas market.
The APPEA Conference remains a
key conduit for oil and gas information
and analysis, and a critical meeting and
networking point for anyone involved in the
industry.
New developments and exploration opportunities will feature strongly at the APPEA 2016 Conference and Exhibition in Brisbane during 5–8 June.
APPEA 2016: a catalyst for innovation and new partnerships
For more information visit appeaconference.com.au
Project statsName: Wadeye Power Station
Location: Northern Territory
Cost: $13.9 million
Capacity: 1.3 Bcm per year
Above: Organised by the industry for the industry, the APPEA Conference and Exhibition is the southern hemisphere’s largest oil and gas conference.
gastoday.com.au |AUTUMN 2016
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gastoday.com.au | AUTUMN 2016
59
WHY? WE ALL know that contracts are a key
part of doing business. At the core of a
contract lie Scopes of Work (SoW).
A recent client of Informa’s realised that
not some, but most of their SoW were
missing key fundamentals. It wasn’t a
commercial document. They didn’t clearly
stipulate the job’s needs. They included
wordy clutter and irrelevant time wasters.
What could have been said in two pages
was hidden within pages of standard
procedures. The 'background' would
regularly exceed the 'requirements' section.
Not only would valuable writing time be
wasted, but contractors would price this
‘clutter’ into their proposals. This would
cost the client more time and money and
frustrate their contractors. There were many
‘shoulds, coulds, possibly, considers’ in the
SoW.
In short, this client’s SoW were written
more as an internal document for
supervisors and procurement to sign off on
rather than a clear, accurate, commercial
document.
The solutionThis client decided things needed to
change. They wanted to shift gear and
re-focus, empower their staff and teach
them new skills to support change. Their
goal: for everyone involved with SoWs
(engineering, procurement, contracts etc)
to view it as valuable management tool and
not just a piece of paper. And, to have the
confidence to write clearly and accurately
with the end goal in mind. They engaged
Informa Corporate Learning to help.
Now, the company’s whole strategy
behind how to craft SoWs has changed
based on this initiative. They are lean, agile
and fit-for-purpose. They adapt as and
when they need to, but always staying
focused on clear expectations.
1. Their SoW practices now have a
strategy behind them
2. Their approach is now 90 per cent
thinking and 10 per cent writing
3. Employees now focus on what they
want. They write with focus. They have
confidence in their writing
4. There are no wishy washy words
5. If it’s not relevant for the job/spec, it’s
out of there!
The one-day programInforma Corporate Learning developed a
one-day training program that walks through
writing a SoW that is clear and dispute-proof.
During the training, we pay close attention
to ensuring appropriate structure, clear
responsibilities, and the right language.
There are numerous examples of good and
bad practice that we compare. By the end of
the course, you’ll be able to pass or fail any
SoW in seconds – which participants do by
bringing in one of their own SoWs.
When the price of oil was on the decline, investing in training was the last expense on the minds of most companies. Except one.
BY NICOLE DOMINGUEZ, ORGANISATIONAL CAPABILITY CONSULTANT, INFORMA CORPORATE LEARNING
How training is helping one Australian oil and gas player save millions
EventsEvents
Check out Informa's full range of commercial skills and contract management training, at www.informa.com.au/contracts© Matej Kastelic / Shutterstock
THESE SIGNIFICANT MARKET forces are
compelling the existing players in the
market to rethink their business strategies
with many leading utilities realigning
their executive teams and organisational
structures to better focus on new markets
and emerging technologies.
It also creates an opportunity for new and
innovative business to enter and disrupt.
With digital disruption, the continuing rise
of the ‘prosumer’ and adoption of new
technologies like storage being just the
beginning. The recent announcement of
Telstra’s plans to enter the energy market is
just the beginning.
Though the change is certainly not all
about renewable technologies and digital
disruption, high efficiency, low emissions
coal plants, carbon capture and storage
and nuclear are still potentially all critical
to meet baseload demand and existing
network infrastructure needs to be utilised
as best as possible to meet rapidly evolving
consumer demands. There won’t be a
rebuild of network infrastructure or an
exodus of baseload generation overnight,
rather clever managers will find innovative
ways to ensure they all deliver the best
market outcomes possible.
The energy market today is facing a series
of challenges and uncertainties that are
both extremely different and inextricably
linked, making it particularly complex for
managers from the length of the energy
supply chain to effectively plan and build
their strategies. It is for this reason that
there has never been a more important time
for leaders from the length of the supply
chain and policy makers to openly discuss
and share their insights into their areas of
expertise.
Australian Energy WeekAustralian Energy Week, to be held from
20 to 23 June in Melbourne, will be the
only major energy event in 2016 bringing
together all the key players from the length
of the energy supply chain under one roof
to share ideas, debate the key issues and
analyse the outlook for all parts of the
sector.
Australian Energy Week is a four-day
event for senior representatives from all
stakeholders in Australia’s energy sector
who need to get to grips with the significant
challenges facing the sector and identify
what opportunities they create.
Australian Energy Week is not just an
exciting new event. It is an opportunity for
the industry as a whole to come together
at the only one-stop-shop energy event
in the country. And it comes with an
extremely strong pedigree – amalgamating
a number of existing successful, high
level conferences, including the Eastern
Australia’s Energy Markets Outlook
Conference, the NEM Future Forum and the
Electricity Storage Future Forum, with some
new and cutting edge content streams and
an exciting new exhibition area.
Australia’s energy industry is undergoing a significant transformation as the sector decarbonises, decentralises and digitalises, and as consumers become increasingly engaged and active.
BY PATRICIA ALFARO, CONFERENCE DIRECTOR, AUSTRALIAN ENERGY WEEK 2016
How Australia’s energy sector is responding to rapid change
To learn more visit questevents.com.au
Below: Australian Energy Week, to be held from 20 to 23 June in Melbourne, will be the only major energy event in 2016 bringing together all the key players from the length of the energy supply chain.
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60
DATE / VENUE EVENT WEBSITE
11‒15 APRIL 2016 Perth, Western Australia
LNG 18 Conference & Exhibition
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DISTRIBUTION
5‒8 June 2016 Brisbane, Queensland
APPEA Conference and Exhibition
appeaconference.com.au media partner
14-15 September 2016 Darwin, Northern Territory
SEAAOC 2016ntresourcesweek.com.au/seaaoc media partner
20-23 June 2016 Melbourne, Victoria
Australian Energy Week
questevents.com.au/australian-energy-week-2016
18-20 May 2016 Adelaide, South Australia
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ISSUE 165 | FEBRUARY 2016
Goldfi elds’ roaring success
New pipelines for Papua New Guinea 106
Jemena’s breakthrough year 82
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Out with the
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