LNG boom a golden opportunity for Australian shipping

Published: 25 Aug 2009

The Australian economy and workforce will miss a golden opportunity with the striking of the $50 billion Gorgon LNG deal with PetroChina if it is not accompanied by a significant expansion in the national shipping industry consistent with a shipping policy review currently under consideration by the Rudd Government.

Australian flagged and crewed vessels have shown that they can provide a world class service in the North West Shelf Joint Venture Project operated by Woodside, where some 30% of the ships are Australian”, said Paddy Crumlin, National Secretary of the Maritime Union of Australia.

“It makes perfect sense with the Government committed to revitalising Australian shipping, that the LNG boom is very much part of it. If you add in Queensland coal seam gas projects, an additional 30 tankers will be required to export Australian LNG over the next 5 to 7 years as projects come on line. 

“The 5 LNG trains (gas liquefaction plants) at the NWS project require some 12 LNG tankers to transport the gas to Asian markets.  The Gorgon project will commence with 3 LNG trains, requiring some 6 to 8 vessels to transport its gas to market. Australian flagged vessels should be part of that task.

“In addition to the Gorgon project, there are several other offshore LNG projects in the advanced planning stage off the northern coast of West Australia. Woodside Petroleum’s Pluto project and Inpex Browse’s Ichthys project, involving in total some 4 LNG trains, initially will require around 7 to 8 LNG tankers”,  Mr Crumlin said.

“There are also 5 Queensland coal seam gas projects in the planning stage, again requiring some 15 tankers. These and the NWS projects show that up to an additional 30 LNG tankers will be required to export Australian LNG over the next 5 to 7 years, as projects come on line. 

“There is ample scope within that requirement for a proportion of those vessels to be Australian flagged and Australian crewed, consistent with the Australian Government’s stated commitment to revitalise Australian shipping, including Australian international shipping. 

The shipping reforms being considered by Government include fiscal incentives to help shippers replace and invest in new ships, structural support for our international trading vessel and adjustments in the regulatory rules of Australian shipping to promote fair competition, and an enhanced national maritime training regime.

“The NWS project LNG shipping has demonstrated the value-adding that can be obtained by transporting LNG on non Free On Board (FOB) shipping terms, giving the seller strong control over ship utilisation and ship efficiency.  It means that that sellers can offer vital customer satisfaction in a market where the cargo is time sensitive (cannot be easily stored) and is of high value. 

‘There will also be a significant advantage in transporting high value and potentially volatile cargoes utilising Australian crews who have the highest international security clearances and standards”, Mr Crumlin said.

Media Contact: Paddy Crumlin, MUA National Secretary 0418 379 660. Michael Meagher: 041....


Authorised by P Crumlin, Maritime Union of Australia, Sydney