Servicing the gas boom—a contractor’s perspective on creating exportable skills
Kevin GallagherChief Executive Officer and Managing Director, Clough Ltd
The APPEA Journal 52(3) - https://doi.org/10.1071/AJ11138
Published: 30 June 2012
Abstract
By the second half of this decade, Australia will rival Qatar as having the largest LNG export capacity in the world, growing from 7%–22% of global LNG exports in just over a decade.
Today, however. local content on major Australian LNG projects in the planning or construction phase is estimated at between 45–55%. About 95% of engineering for LNG projects is performed overseas and there is also a trend towards fabrication and modularization work being executed overseas.
Operators must execute their projects using the best expertise available and seek the best commercial return. The reality is that today, Australian energy contractors do not have the credibility and capacity to engineer the gas boom within Australia.
Australia needs to reflect on what will be left 20 years from now, when all the major LNG developments have been constructed.
One of the factors constraining Australian contractors is the steady deterioration of labour productivity. This problem is in part due to the severe skills shortage the country is experiencing. In Western Australia alone, the demand for people will significantly exceed supply during the next five years, with a similar outlook in Queensland.
By 2016, most LNG projects presently nearing or in the construction phase will move into the operations phase. This presents an excellent opportunity for Australian contractors to provide operations and maintenance services to major LNG projects.
Clough’s approach to servicing the gas boom will be to develop the capability and capacity to be competitive in the Australian construction environment today, while positioning for future global opportunities, by creating high value exportable skills.
It is important that industry and government create policy for ‘Beyond the Boom’ to ensure the benefits of this boom are there for future generations.
Kevin Gallagher commenced as the CEO and Managing Director of Clough Limited in November 2011. As Clough’s new leader, Mr Gallagher is responsible for defining the strategy that will guide the 93-year-old company through its next phase of growth, while building engineering, construction and asset support capability to service booming energy and resources sectors. Mr Gallagher is a senior executive with 20 years’ experience in managing oil and gas operations in Australia, the USA and North and West Africa. A qualified mechanical engineer, Mr Gallagher commenced his career as a drilling engineer with Mobil North Sea before joining Woodside in 1998. During his 13 year tenure with Woodside, Mr Gallagher led the drilling organisation through rapid growth, delivering several Australian and international development projects and exploration campaigns and setting drilling performance records while improving safety. He has also led the Australian Oil Business Unit to record production and started two new development projects while divesting non-core assets and increasing revenue and earnings. Before joining Clough, Mr Gallagher was responsible for production on Australia’s largest resource project—the North West Shelf—where he held the positions of Executive Vice President, North West Shelf Business Unit and CEO of North West Shelf Venture at Woodside. During Mr Gallagher’s tenure, Woodside’s North West Shelf LNG project achieved new revenue and production records. |
