Informa Whitepaper - The Rise of Australia's LNG Industry


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With three established projects across the country and seven more in the pipeline, LNG has grown to become Australia's fastest growing export industry. Maintaining investment in the people, skills and infrastructure required by this industry is essential to ensure its growth stays on track and develops Australia as a global power in the supply of energy.

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Informa Whitepaper - The Rise of Australia's LNG Industry

  1. 1. LNG Awareness | LNG Fundamentals | LNG Masterclass WHITEPAPER: Full steam ahead – The rise of Australia's LNG industry Introduction There's no denying that Australia's LNG industry is a massive pillar in the country's economy - and it is only set to grow in importance in the coming years. With three established projects across the country and seven more in the pipeline, LNG has grown to become Australia's fastest growing export industry. Maintaining investment in the people, skills and infrastructure required by this industry is essential to ensure its growth stays on track and develops Australia as a global power in the supply of energy. Yet a common scenario in Australia is that many professionals involved in the industry do not have a clear understanding of the subtle workings and complexities of LNG, its role in the wider Australian economy and the likely path of its future. This is especially an issue for those who don't have a direct role in LNG but whose work nonetheless can have a major impact - for example, accountants who work for LNG firms. With the right training and education, anyone directly or indirectly involved in LNG can ensure they have the knowledge and insight necessary to help Australia reach its ambitious goals in this sector. This whitepaper will explore the current state of the LNG industry in Australia, the problems and challenges it is encountering and why the right training is crucial. Australia aiming to be Number One According to the Australian Petroleum Production & Exploration Association (APPEA), LNG currently accounts for more than a third of Australian business investment. However, its long-term scope extends far beyond national borders. In fact, experts around the world agree that Australia is well on track to become the world's largest producer and exporter of LNG by as early as 2018. As of 2014, Australia is the world's fourth largest producer of LNG. However, it has the potential to overtake Qatar as the world's leader in the following four years, with a forecast total export capacity of 85 million tonnes by this time. "When the plants that are currently being built start up, Australia will probably be the world's largest LNG exporter," says Michael Williams, an independent consultant with over 40 years of international experience in LNG.
  2. 2. LNG Awareness | LNG Fundamentals | LNG Masterclass "In terms of the national economy, LNG will probably be the first or second in terms of export trade." The contribution that the LNG industry makes to Australia's economy simply cannot be underestimated, Williams adds, especially when you consider the wider flow-on effects it brings. "Each project brings jobs for the project itself, but for the wider economy there's a flow-on effect," Williams explains. "It's not only employment in engineering companies that can see an increase either." Given the right support and investment, Australia's quest to become the world's biggest LNG force may seem unchecked. However, it must first make sure it can overcome a series of critical challenges. What are the roadblocks in Australia's way? Australia is not the only country to be riding the LNG wave and enjoying exponential growth. In addition to established powers such as Qatar, the emergence of newer markets could stand in Australia's way. "For the next phase of development, Africa will become a major player in the global market. Mozambique and Tanzania will be competitive, as will the United States and Canada," warns Williams. Although Australia's key export markets, especially those in Asia, could turn to newer African suppliers as they rise in power, experts believe that Australia's superior political stability will be a crucial competitive advantage. Rising labour and capital costs could be another stumbling block, says Williams, with Australia being known as one of the most expensive places in which to build LNG projects. "Some of the existing developers in Australia haven't done any favours to the country's LNG industry in that they've built very high-cost projects, and some of these costs could have been avoided." Lastly, companies in Australia's LNG sector need to ensure they have a good handle on the latest technological developments, such as that involving the rise of floating LNG (FLNG). Williams says that many companies are trying to follow the lead of giants such as Shell - but in the wrong way. "Shell, who was a pioneer in FLNG, spent 20 years of research and 15 million man hours solving engineering challenges before they felt confident enough to declare FID on a FLNG project. Since that has happened, there have been many companies saying they've got that technology as well," he says. "You can't just piggyback on the back of that though, because you don't know what kinds of decisions have been made. Whereas I have the confidence that Shell's FLNG will work, I am less
  3. 3. LNG Awareness | LNG Fundamentals | LNG Masterclass confident about others." With the large range of nuances this industry entails, it's essential that anyone in contact with it has a working knowledge of what it involves. Training specially tailored for the LNG industry Fortunately, anyone looking to get involved in LNG can take advantage of a selection of short, intensive courses designed to arm them with the essential knowledge to succeed in this industry. "If you're working in the LNG sector and you're doing it from outside the industry, then it is worthwhile getting on a course, even if it's just to learn the jargon and the acronyms involved," says Williams, who co-presents the LNG courses offered by Informa Corporate Learning. "For example, if you're a solicitor or a lawyer who comes to work for a company involved in LNG, it helps to go on a course in order to get familiar with the business." Informa Australia offers three separate courses - Awareness, Fundamentals and Masterclass - which caters to every experience level, from the beginner with no knowledge whatsoever of LNG to those already with on-the-job LNG experience under their belt. The benefits of LNG training "If you're new to the LNG business, whether you're a lawyer, a tradesman, an accountant or an engineer, it is essential to take a course to join the 'LNG club'," says Williams. The potential benefits from attending an LNG course are manifold. Such courses allow professionals from a range of backgrounds to quickly familiarise themselves with the intricacies of LNG, even if they have had no prior exposure to the industry. Participants can get up to speed with the complex jargon and terminology often used in the industry to ensure they have a handle on what their colleagues are discussing. A combination of both lectures and case studies are utilised in each course, to ensure participants can draw on the presenters' wealth of knowledge and apply their learnings to real-life scenarios. Perhaps one of the most valuable components of the courses, according to Mr Williams, is the presenters' use of "anecdotal war stories" - the personal experiences only gained through decades of work in the sector. "They demonstrate where projects have made mistakes in the past, which hopefully won't be repeated in the future." If you would like to learn more about taking part in an LNG training course, please get in touch with Informa Australia today.