Gas Today — August 2012
Britain’s BG Group has demonstrated its commitment to the Australian economy and workforce with the construction of the Queensland Curtis LNG Project through its subsidiary QGC. QGC speaks with Gas Today about upcoming tender opportunities for the project and how contractors can ensure they stand out from their competitors.
A priority project for QGC, the Queensland Curtis LNG (QCLNG) Project, involves developing CSG fields in the Surat Basin and transporting gas via a 540 km underground pipeline network to Curtis Island, near Gladstone, where it will be liquefied for export.
The project will create an average of 5,000 jobs during construction and up to 1,000 jobs across Queensland during the project operation phase.
The project is set to provide a $32 billion boost to the Queensland economy over the next 10 years, with QGC to pay approximately $1 billion a year in taxes and royalties to the Federal and Queensland governments.
Driving Queensland’s economy
Since 2010, QGC has invested approximately $8 billion on the QCLNG Project, channeling 74 per cent of these funds into Australia and 59 per cent to Queensland specifically.
The company’s latest six-monthly report to the Queensland Coordinator-General on Australian Industry Participation – from 1 October 2011 to 31 March 2012 – reveals that Queensland and Australian companies were engaged on contracts valued at $6.1 billion for a wide range of goods and services for QGC and the QCLNG Project.
QGC Managing Director Derek Fisher says $4.4 billion of this contracted work was being done by Queensland-owned and operated businesses.
“QGC is delivering significant benefits across the QCLNG Project area with more than $1 billion worth of contracts awarded in the Gladstone region and nearly $400 million in the Western Downs region between Toowoomba and Roma,” Mr Fisher says.
“Our total workforce has now passed 7,300 people – with 1,594 staff and contractors working directly for QGC and 5,719 people engaged by our major contractors.
“The workforce includes 235 graduates, trainees and apprentices, more than double the number reported at 31 September 2011.
“We also have a strong commitment to local research and development with more than $77 million invested to date and 65 per cent of that in Queensland,” says Mr Fisher.
Remaining opportunities with QGC
According to QGC, over the next three years most of the opportunities to work with the QCLNG Project will be via main contractors and sub-contractors, as well as opportunities to supply QGC directly through its existing domestic gas operation, which provides approximately 20 per cent of Queensland’s domestic gas.
Major contractors for the QCLNG project include:
- KBR, engineering and design of QCLNG pipeline
- Bechtel, engineering, procurement and construction
- Transfield Services, gas field work (capital works and maintenance)
- McConnell Dowell and Consolidated Constructors Corporation (MCJV), for the QCLNG pipeline
- Thiess, construction of processing facilities including six field compressors and one central processing facility
- Kentz, for integrated commissioning services
- GE Power and Water, water treatment plant at Curtis Island.
Each of these companies were required to submit a Local Content Plan to QGC, and through this have committed to providing opportunities for local businesses. QGC advises that smaller contractors who hope to benefit from these lucrative sub-contracting positions would be well advised to promote their involvement in the industry in this way.
How to get involved
More than 47,000 registrations of interest have been received from Australian businesses seeking to supply to the QCLNG Project.
This means that tenders submitted will undergo rigorous scrutiny and high levels of competition from competitors.
QGC has been working with the Industry Capability Network (ICN) for three years to identify Australian firms to bid for work. ICN is a not-for-profit organisation supported by the Queensland Government whose aim is to identify procurement opportunities to increase local industry access to major domestic and global projects.
By engaging with agencies such as this, contractors may lighten the burden of looking out for the next working opportunity and can instead focus on the task at hand.
The ICN Gateway website is QGC’s first port-of-call for updates including a range of useful information on upcoming tenders as well as the company and its contractors.
QGC advises Gas Today that it is important for businesses looking to work on the QCLNG Project to have a high-quality and effective ‘capability profile’. A capability profile informs QGC and proponents, ICN, other government agencies, industry associations and chambers of commerce of important information about your business, such as:
- Company capabilities
- Size of company
- Company capacity
- Company ability to ramp up operations quickly
- Financial stability
- Compliance with safety and environmental standards.
Setting the standard
Tyco Water and Murphy Pipe and Civil are two contractors who have secured work on the QCLNG Project, supplying carbon steel, concrete-lined trunklines and pipe fittings, and gas and water pipelines respectively.
Both companies demonstrated strong capability profiles throughout the tender process.
Tyco Water sourced all materials from Australian suppliers including BlueScope Steel, and used local transport companies. The company was able to quickly employ an extra 110 people to complete the pipe supply contract, creating significant employment opportunities. The company has also increased shifts at the Wacol facility in Queensland from one to two in order to produce more product.
Organisations considering submitting a tender to QGC need to consider how they will continue to resource a growing project.
Murphy Pipe and Civil was formed in 2006 and has grown rapidly to now employ 450 staff. A further 250 staff will be employed to fulfill the company’s QCLNG contract. Murphy Pipe and Civil anticipated the needs of the CSG industry early on, investing capital in Spiderplough technology, which sets it apart from its competitors. According to Murphy Pipe and Civil, the Spiderplough has the ability to lay high-density polyethylene (HDPE) pipelines five times faster than conventional methods, and without the need for open trenches. The pipeline ploughing technology has been quickly embraced by the industry, particularly the CSG sector within Queensland’s booming Surat Basin.
In order to continue to deliver on contracts and to diversify its capability profile, Murphy Pipe and Civil also merged in 2011 with J. Murphy and Sons, demonstrating its ability to be forward thinking.
Both companies were able to demonstrate to QGC that their aims were aligned and that all three organisations shared a philosophy of supporting local sub-contractors and labor.
Within twelve months Murphy Pipe and Civil has contributed $8 million into the Western Downs economy.