Oil and Gas News

The power of industry collaboration amid uncertain times

The 2020 Australasian Oil and Gas (AOG) Conference reinforced the importance of collaboration ahead of the looming impact of falling oil prices and COVID-19.

Held in March just before travel restrictions and the severity of the virus hit, the conference was opened by Western Australia Premier Mark McGowan, before leaders from industry giants Woodside and Chevron took to the stage.

In a time of uncertainty, McGowan reinforced the future of the oil and gas industry by outlining the government’s vision to establish Western Australia as a recognised global leader in liquefied natural gas (LNG) innovation, supporting services across Australia and internationally.

“We have a unique opportunity here for complementary industries to locate in Western Australia to develop, diversify and support the construction, operation, maintenance and decommissioning phases of the project life cycle in LNG,” McGowan said.

“This means more work for local SMEs, more high paying, high-quality Western Australian jobs.”

McGowan highlighted five opportunities for the government, including local supply contracts that will be worth $8 billion annually, especially with the ACCC decision on coordinated shutdowns.

He also pointed to regional supply opportunities that would be generated if Western Australia and Perth is established as the LNG hub for the southern hemisphere; establishing WA as the centre of excellence in remote technologies that are used across the industries; using the LNG industry to drive upskilling for other ocean-based industries, such as ship building and repairing; and leveraging the cheap and reliable gas that comes from reservation to create new jobs and industries.

“Each of these areas is an essential pillar in our strategy to make Perth a genuine global LNG hub,” McGowan said.

With Australia being named the lead exporter of LNG in the world in early 2020, McGowan announced a collaboration between industry and government universities.

He said the LNG Futures Facility would be a world-first micro sale LNG facility that could test technologies at an affordable scale.

Eighteen organisations supported the successful stage one bid, pledging $34 million, and $45 million in non-staff in-kind, including $3 million from Chevron Australia, as well as a contribution from the state government.

“That will fund a very exciting part of the CRC: the LNG Futures Facility. My government was proud to contribute $10 million plus land in the Kwinana industrial precinct, to help establish that integral component of the FEnEx CRC,” McGowan said.

Following the success of the LNG Jobs Taskforce, McGowan announced that Chevron, Woodside, Shell and Santos would be publishing forward work plans – a two-year look-ahead at the work they expect to attract in the future.

The plans include scope, types, indicative contracts, work start dates and tender dates and focal points of contact, allowing for better planning of contacting activity and more transparency in the market.

“This year will be a pilot year for publishing forward work plans. If it is successful, we anticipate forward work plans will be released annually at AOG, establishing a common platform and continuous sharing and encouraging broader adoption across the Australian oil and gas sector,” McGowan said.

Woodside executive vice president of development Meg O’Neill was confident that despite uncertain times, the company’s Burrup Hub would bring together resources and facilities to provide 40 trillion cubic feet (Tcf) of gas resources in the future.

Through its Burrup Hub vision, Woodside is targeting production of 40 Tcf of gas from the North West Shelf (NWS), Pluto, Scarborough and Browse resources.

By processing these resources through the Pluto LNG and Karratha Gas Plant (KGP), Woodside is confident it will create value for shareholders and customers, supporting thousands of jobs and supplying energy for decades to come. 

“Even in the most stable of times, the reality for our industry is no company can deliver big projects alone. We rely on engagement with governments, regulators, communities, joint venture partners and contractors and suppliers large and small. And I know that many of those attending AOG today will be interested in the opportunities that will arise as our projects progress,” O’Neill said at the AOG conference.

“We recognise the efforts of the McGowan government to coordinate with industry to capture opportunities for this state. Some of those opportunities are reflected in the forward work plans that are being released at this conference. At a time when the economy is in need of stimulus, one of the best things to do is to approve these projects.”

In addition, O’Neill highlighted the importance of developing resources in a way that is carbon-efficient and the company’s aspiration to be net zero by 2050.

Woodside has been offsetting emissions from its Pluto development for years, setting the company a new target to offset equity reservoir CO2 across its entire global portfolio by 2021.

“The energy transition presents opportunities for WA, including further growth in renewables, the development of a hydrogen industry and, of course, the continued dominance of this state as a global exporter of LNG,” O’Neill said.

Chevron director of operations Kory Judd said there was now an increasing social expectation and moral obligation that the industry lowered its carbon footprint.

“Natural gas as it exists today, in its form today will not be enough. We will have to do more to strive for lower carbon standards for the future,” Judd said during his presentation.

He added that Chevron was deploying technologies to continue to reduce its carbon footprint through the Gorgon CO2 injection project.

Over the life of the asset there be over 100 million tonnes that will be injected into the carbon capture facility.

However, Judd stated that the industry still needed to “find hidden treasures and secrets” in data to become more economic and efficient on the markets it will supply.