LNG is flowing fast, on east and west coasts

April 21st, 2016

Flying around the country on his whistlestop Australian tour, US activist John Fenton managed to avoid the areas of conspicuous success for the gas industry: Gladstone (Qld) and Barrow Island (WA).

Despite visiting several locations in Queensland and WA, it seems Mr Fenton was not interested in seeing a successful industry in action.

Gladstone and Barrow are the hubs for Australia’s burgeoning LNG export business, drawing on seabed and onshore resources, in the latter case for the first time globally from coal-seam gas.

Shipments from Chevron’s Gorgon project (off the WA north coast) started last month.  They have been underway from two of three developing ventures at Gladstone since the last quarter of 2015.

At about 140,000 tonnes per shipment, on current prices, this equates to a value of about $45 million per shipment.

Out of Gladstone, Santos is currently making about one shipment a week, which will double when its second natural gas chilling plant (or ‘train’ as they are called) comes onstream, meaning about $4-5 billion export income a year – from one project.

So large is the output anticipated from the Gorgon project, , that at its peak, it is anticipated to be generating $3-4 billion a year in Commonwealth royalties.

Total industry export income is expected to top out around $60 billion a year, on the way overtaking coal, then iron ore, to become the nation’s No.1 export.

At last week’s global LNG conference in Perth, American construction giant Bechtel finally took a breath to reflect on the $70 billion construction job which was the sum of three separate projects, each for two LNG trains, conducted simultaneously at Curtis Island, just off the coast at the port town of Gladstone.

Not only was this the biggest Australian undertaking of its type, it was at least one of the world’s biggest, if not the biggest, anywhere.

Bechtel LNG leader Alasdair Cathcart told the conference the job kept a lot of people awake at nights for a long time.

“I don’t think there’s ever been a greater concentration of physical work in one location in Bechtel’s history,” he said.

In order to succeed with three simultaneous projects, alongside each other, Bechtel had to use a collaborative approach, bringing owners, the community and the main contractor together.  “I think this collaborative approach was the difference,” he said.

But don’t bother asking John Fenton about this collaborative approach to one of the world’s biggest gas industry projects by companies from the US, Europe, Asia and Australia.  According to him, the gas industry operates in the same way everywhere – and it is all bad; he isn’t even able to enjoy the  $50,000 a year he has been earning for the past five years from the gas company operating on his property in Wyoming.

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