Australia is currently entering what is set to be the largest packages of work it will see for the near future, namely the offshore hook up and commissioning of Shell’s Prelude Floating LNG facility and Inpex’s Ichthys Central Processing Facility and Floating, Production Storage and Offloading (FPSO) Facility. Man up for these phases has been under way for the last 6 months and continues to be in full swing meaning vibrant times for those with offshore experience especially in hook-up, installation and commissioning (IHUC). These packages of work are expected to last for 6 months but if the industry has learnt anything from the IHUC phase of Chevron’s Wheatstone project this will probably be tripled to nearer 18 months offshore. Let’s say IHUC of Prelude and Ichthys takes 18 months, that’s 18 months of work for several hundred contractors and staff engineers but what is available for those not in commissioning or those in commissioning post completion of these massive packages of work?
Moving past the completion of Prelude and Ichthys many commentators note that the operations and maintenance markets will develop strongly over the course of the next 5-10 years, and they are not wrong. What is wrong, however, is to look solely at operations and maintenance as the only growth area in Australia over the next decade.
Let me explain further.
There is no denying that the facilities maintenance markets will take the lead in employment over the next decade but what we need to look at are scopes of work that may be centred on plant optimisation and optimisation of resource utilisation across the offshore side of projects.
Once projects come online such as Gorgon, Wheatstone, Ichthys and Prelude plans to look into debottlenecking and backfills will be firmly underway. Gorgon will look to expand their facilities offshore and at a later date onshore. Inpex will move into phase 2 for Ichthys to supply more gas to their LNG facilities. Shell will look at an offshore development to tie into Prelude, most likely Crux. The life of an old giant in Bayu Undan is sadly coming to an end and will be laid to rest around 2023 meaning that ConocoPhillips will need to look into backfilling DLNG. ConocoPhillips are looking to achieve this through the construction of a huge FPSO and a subsea pipeline tie in to existing subsea infrastructure they have running to DLNG. The project is called Barossa and will be the most sizable development in Australia over the next 5 years.
The North West Shelf is not running at capacity and Woodside are always looking at debottlenecking their facilities and improving performance. However, sometimes this is not enough and upgrades and modifications are required to optimize production. Take Woodside’s most recent FID on the $3 billion Greater Enfield Project. New wells will be drilled, a large EPCI package has been awarded to Technip and some minor topside modifications carried out in Keppel by Aibel in Singapore, to their FPSO.
Continuing on with Woodside, Pluto is another dinosaur in the Western Australian gas market and will need a new feeder over the next decade. Woodside’s recent purchase of Scarborough from BHP and their Browse field may provide suitable options and large scale offshore developments will ensue with minimal onshore work required. What of the fate of Hess’s recently cancelled EQUUS project? Will Hess look to re-enter Australia when the oil price rebounds or will they look to sell their discovery on to a gas hungry giant such as Woodside? Hess were going to pipe their gas to Karratha Gas Plant (KGP) so does this mean that Woodside will be looking for another option for additional gas through KGP? Either way this development will solely involve offshore development with minimal work required onshore.
Construction work will all be carried out overseas on offshore packages. Keppel will modify the Vincent FPSO for Woodside and ConocoPhillip’s Barossa FPSO will find its way to a shipyard as will any other floating production facility that will be inked in to be built over the next decade. This is what happens when projects are centred around offshore facilities, the only shipyards big enough to construct them, are overseas; we have seen this with North Sea developments and African developments. Look at the recently awarded Coral FLNG construction contract to SHI in Korea and TCOs Future Growth Project will also be constructed in Korea. Statoil will also most likely bring Johan Sverdrup’s topside construction to Korea; I think I have made my point!
You can start to see the pattern here, future developments in Australia will be heavily biased to offshore upstream projects. Australia has its downstream infrastructure in place so why build more? Why build more when current and future LNG trains will not run at full capacity? The future will be optimisation and offshore backfilling through construction of new floating production facilities, whatever form they take; FPSOs, CPFs, FSOs, CPPs, FLNGs etc. Offshore is the future for Australia!
If you have experience working on the offshore and subsea side of major projects you will be in for a favourable decade in Australia, as you are if you are an operations and maintenance specialist. If you are a commissioning and start up engineer or onshore construction engineer make the most of the next 6-18 months in Australia as expatriate work will be the next stop for you unless you adapt to operations and maintenance or be satisfied will smaller packages of work.