PERTH—Western Australia is aiming to revive the LNG export boom that made Australia’s biggest state a land of milk and hydrocarbons that carried the country through the worst of the global financial crisis.
At its peak, Western Australia sailed through the global economic downturn on a billowing resource boom backed by approximately AU117 billion (US$92 billion) investments in the Woodside-operated Pluto project and the Chevron-led (NYSE: CVX) Gorgon and Wheatstone projects. Additional large-scale LNG projects such as Ichthys in the Northern Territory, Queensland’s three coal seam to LNG projects at Curtis Island and Shell’s (NYSE: RDS.A) Prelude Floating LNG facility also played a role inoculating Australia’s economy from recession—a record totaling 27-successive years at press time.
The end of the LNG construction boom in tandem with crashing commodity prices subsequently saddled Western Australia with financial liabilities expected to soar from $36.5 billion to $46.4 billion in 2019, relegating Australia’s once most prosperous state to the most indebted.
Australia’s LNG construction crescendo also ended on a somewhat sour note due to cost and time delay blowouts on many projects that labelled the country as a capex risk for future endeavors.
West Australian Premier Mark McGowan was clearly eager to reverse the trend and re-inspire past glories as he extended open hands to the industry at the Australian Oil and Gas Exhibition and Conference in Perth this week.
McGowan told the opening session of the conference that his government was developing an LNG Jobs Taskforce made up of members from both industry and government which will aim to establish Western Australia as a key regional LNG hub.
The Premier said the taskforce will look to build on job opportunities the LNG industry can provide encompassing new technology, education and maintenance services.
“[Western Australia] jobs are my number one priority, and the creation of this jobs taskforce will make sure we build on our existing LNG industry to create more long-term local jobs,” McGowan said.
“Australia is set to have the world’s largest LNG export capacity by mid-2018, surpassing Qatar, so now is the time for our state to act and become a global hub,” he said. “As we build on our existing LNG operations, courses could be provided by education and training providers that align with the needs of industry, ensuring young Western Australians get the skills required for future job opportunities.”
“Oil and gas projects help drive our economy, generating jobs in the industry and revenue with flow-on effects to the rest of the economy,” he added.
Deloitte Australia’s oil and gas leader, Bernadette Cullinane, told media that confidence signals in the industry were becoming visible, but the local oil and gas sector will still have to work hard to take advantage of opportunities.
She said the lengthy oil and gas price downturn had created a local industry that was leaner and more resilient—adding however, that it needed to maintain that discipline.
“Our Australian LNG sector will soon take the crown as the largest in the world,” Cullinane said. “The industry is becoming more global, digital, diverse and decentralized, while the energy mix for Australia and Asia-Pacific is shifting to lower carbon fuels.”
“With such rapid change, it is important for operators and services companies to look to the future and be prepared for the energy transition that is coming around the corner.”