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Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Australian LNG: the cost myths and truths

Martin Wilkes
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RISC Advisory.

The APPEA Journal 56(2) 587-587 https://doi.org/10.1071/AJ15093
Published: 2016

Abstract

In recent years the media has published articles relating to the high cost of doing business in Australia. The impacts of low productivity, high-labour costs, and poor performance have all been highlighted as ailments with Australia and within the LNG (construction) industry in particular. This has led to views that Australia is a high-cost environment and Australian LNG is expensive. The numbers that are often quoted appear to support these views, however they overlook—and sometimes mask—aspects of individual projects that are important to understand before making any generic pronouncements about the competitiveness of the Australian industry in general.

This extended abstract:

  • Exposes the inadequacies of the general comparisons that have been made in the recent past.

  • Demonstrates the actual impact of several identified issues.

  • Demonstrates the importance of decisions made early in the project development cycle by respective owners on the projects and project costs.

  • Identifies the differences and similarities in development and costs of LNG projects in Australia compared to other areas of the world, in particular the US.

  • Examines the impact of lack of collaboration.

Martin Wilkes holds a Master of Engineering (Chemical Engineering) degree from the University of Newcastle Upon Tyne, UK. He has worked in the Oil and Gas industry for over 25 years, holding a range of international position with Shell and Woodside prior to RISC. Martin is currently a Principal Advisor at RISC. He is a Chartered Chemical Engineer and a Chartered Environmentalist, a member of the Institution of Chemical Engineers, and a member of the Society of Petroleum Engineers.