Upstream CSG: transitioning from project delivery to operational excellence for large-scale upstream assets

Abstract

Multiple providers have spent $75 billion building upstream CSG to LNG production facilities in Australia during the past decade. Heretofore, their focus has been on completing construction on budget and on time to first gas sailing in tankers.

Large project delivery-focused organisations were created at great cost. Meanwhile, during this construction period, oil prices (to which LNG prices are tied) have fallen by ~50%.

The challenge now for CSG to LNG providers is to transition from a one-time project delivery focus to an ongoing, efficient operation focus—at lower than expected costs.

This case study describes how one CSG to LNG provider is successfully transitioning from project delivery to operations excellence by:

• Optimising gas flow from wells to ships—transitioning from a vertical focus on one-time construction of a chain of facilities (wells, compression, pipelines, liquefaction) to a horizontal focus on continuous operation of a production chain.

• Maximising uptime and optimising performance— recognising that a significant percentage of thousands of wells/kilometres of pipelines, dozens of field compression stations, and numerous support (power and water treatment) facilities will have problems at any one time; operations and maintenance crews and equipment must be continuously targeted at highest priorities.

• Maximising internal and contractor labour productivity—realising that the largest variable cost is operations and maintenance labour, LNG producers must drive productivity by systematically maximising tool time, as well as being continually focused on the right wells/facilities at the right times. Across such vast geographies, optimised planning and scheduling is essential.