The changing face of Australia's LNG production
The good, the bad and the ugly
Australia has been the epicentre of LNG development for the last decade. Within a period of approximately five years, fourteen liquefaction trains have been developed almost simultaneously. This activity is expected to bring the nation’s total to twenty one when completed.
The scale of this build-out would be impressive under any economic conditions, but it is particularly notable considering it occurred at a time when many companies and governments had curtailed capital spending in the wake of the global financial crisis. However, commitment, long-term vision and geographical proximity to the growing Asian market allowed Australia to continue to develop its LNG infrastructure when others stopped. Now, with many of these long-term projects approaching operational phase, Australia has many lessons to share with the rest of the world, particularly since oil and gas (O&G) development in many countries is shifting toward unconventional resources such as shale gas and coal seam gas.
Deloitte interviewed ten Australian LNG leaders who were either involved directly in managing these projects or who have a broad industry view through their roles as consultants or advisors.
Through these anonymised interviews, they provided candid insights into what they’d do differently if they could; what the industry must never do again; and what leading practices have emerged that, in their view, should become part and parcel of any LNG project going forward. They also provided some thoughts on how innovation and collaboration can help take LNG to the next level over the coming years.
Keep in mind that within every collective ‘lessons learned’ there were exceptions. Some projects, for instance, have been delivered in a timely manner and close to budget despite the general concerns expressed by survey participants about excessive cost escalations and schedule over-runs. The insights presented herein are intended to paint a picture of the Australian LNG experience in very broad strokes, and in no way are intended to be comprehensive.