Australian LNG: the cost myths and truths

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.