Figures from Western Australia’s Department of Mines and Petroleum indicate that the state had 75% of Australia’s natural gas production (ABARE- source) and 9% of the world’s sea-borne LNG trade in 2009. Western Australia is already a significant world force in the LNG market even before current and proposed expansion projects are taken into account. Of these, the Gorgon project (which is in the early stages of construction) seems to have captured the greatest recent international attention.
Gorgon is Australia’s largest LNG project to date and will be operated by Chevron Australia, with the Kellogg Joint Venture Group (KJVG) (comprising KBR E&C Australia, JGC Corporation, Clough Projects Australia and Hatch Associates). KJVG have been awarded the AUD2.7bn contract to engineer, procure and construction manage (EPCM) the LNG downstream and logistics portion of the project.
The major downstream elements of the Gorgon project are:
¦ 3 x 5 mtpa LNG processing trains
¦ 2 x 180,000 m3 LNG Storage tanks
¦ 4 x 35,000 m3 Condensate Tanks
¦ Facilities to separate condensate from the gas stream for separate export
¦ Gas treatment, CO2 removal, compression and reinjection facilities
¦ A 300 TJ/day Domestic Gas processing plant
¦ 5 x 118 MW gas–turbine power generation units.
Modular construction methods are being used.
In terms of international interest in the super heavy lift and transport contract, the field of contenders was extremely strong, with Mammoet ultimately being awarded the contract.
Mammoet has had a permanent presence in Australia since April 2002 but has chosen its projects carefully and flown below the radar for much of this time. However its acquisition of Hercules Crane Hire in mid-2009 signalled an intention to play a greater ongoing role in the crane industry in Australia.
Hercules was a strong player in servicing the mining industry in the state of Western Australia, and had a modern fleet of cranes, including all terrain cranes up to 400t capacity. However it was an early casualty of the global financial crisis (GFC), leaving it unable to obtain finance for an ambitious programme of crane acquisitions, leaving Mammoet to pick up the pieces.
The Hercules name has now disappeared with the business currently operating as the crane hire division of Mammoet Australia. However, its previous depots remain in Newman, Leonora and Port Hedland, and have been joined by a new depot established in Karratha; plants seen as strategic locations for serving the mining and resources industries in Western Australia. The long-term project activities of Mammoet in Australia continue as previously established.
An early consequence of the Hercules acquisition was the relocation of some cranes to Karratha to support Mammoet’s work for Woodside on the Pluto LNG project. Mammoet recently completed work on the loading of 264 modules and support structures in Thailand, transporting them to Australia, offloading them at Karratha and erecting them on site for an onshore processing train on the Burrup Peninsula to handle gas from the Carnarvon Basin. For this project 200 axle lines of self propelled modular transporters (SPMT) were used, along with cranes up to a Demag CC 4800.
This project is typical of the type of work that Mammoet has undertaken for the LNG industry in Australia virtually since its inception and has been followed by success with the Heavy Lift and Transport contract for the Gorgon project.
This calls for:
¦ 6-8 heavy lift cranes from 250t to 2000t capacity, with associated lifting gear
¦ A gantry jacking system and associated equipment
¦ Other jacking and skating equipment
¦ Provision of 350-400 axle lines of SPMT, and ancillary equipment
¦ Provision of personnel to plan, manage and operate the heavy lifting and transport equipment
¦ Technical support for engineering, lift studies, transport plans, etc.
The work takes place on Barrow Island, which has environmental sensitivities, and as a consequence all equipment sent to the island must be cleaned and wrapped in plastic to avoid contamination of the local environment.
Mammoet’s increased permanent presence in Australia is seeing the company focus on a larger customer base as well as a broader mix of cranes and transport equipment, including 13 crawler cranes from 150 tonne to 600 tonne class, 144 lines of conventional hydraulic platform trailers, 8 new prime movers rated at 250 tonnes as well as 96 lines of SPMT that have been brought to Australia in the last year.
Long-term managing director of Mammoet Australia, Ben Schulte, sees his company working with large locally based engineering construction companies on a broader range of projects in the future, where the focus in the past has been on working with major international companies who have been prime contractors on landmark oil and LNG projects. Mammoet recently completed moving 38 oversize modules in the Pilbara from Port Hedland to a location 350 kilometers south for the expansion of ore handling facilities at an iron ore mine.
Sarens is another international heavy lift and transport specialist to have established a permanent presence in Australia, and it was an unsuccessful bidder for the main Gorgon heavy lift and transport contract.
Sarens entered the Australian market through partnerships with local companies. Its first partnership was not successful but it experienced considerable growth in a partnership with Universal Cranes between 2006 and 2009. One of its early projects was to supply SPMTs for a Woodside LNG project.
The relationship with Universal Cranes saw Sarens supplying large crawler cranes and Universal Cranes complementing this with smaller crawler and mobile cranes. When this partnership dissolved in late 2009, Sarens decided to operate in its own right and it purchased equity in Western Australian company Perth Crane Hire. This provides it with access to mobile cranes in the state with the highest mining and energy project activity, although Perth Crane Hire continues to operate in the general hire market.
Apart from this arrangement, there have been 2 other significant changes in the last 12 months: the appointment of the first Australian general manager (Mark O’Kane), and the opening of Sarens premises in Queensland, New South Wales and Western Australia (Sarens previously shared facilities with Universal Cranes).
O’Kane believes that it is beneficial to have an Australian presence in key roles, providing services on major Australian projects because of the importance of understanding local workplace cultures and practices. He states that the majority of the Sarens Australia staff are Australians, and that there is a good level of skill and experience available in the heavy lift and transport area, with many having experience on major projects outside Australia.
The size of the Sarens fleet based in Australia has doubled in the last year, and now includes:
¦ 2 x 600t Demag CC2800 crawler cranes
¦ 1 x 400t Demag CC2500 crawler crane
¦ 1 x Liebherr LR 1400 crawler crane
¦ 3 x 350t Liebherr LR 1350 crawler cranes
¦ 6 crawler cranes (various) in 250t-280t range.
Sarens is able to draw on other crawler cranes as required, as well as SPMTs, skidding systems and high capacity gantries as required from within the Sarens worldwide organisation. One of Sarens’ largest projects internationally is the Koniambo nickel project in New Caledonia: virtually on Australia’s eastern doorstep.
One of the features of a project as large as Gorgon is that those who miss out on the major contract have the opportunity to supply cranes under other contracts; such is the demand for lift capacity. In this respect, Sarens won the contract to supply cranes between 250t and 400t for construction of the LNG and condensate storage tanks, while Tutt Bryant Crane Hire, part of another unsuccessful bid for the Gorgon heavy lift and transport contract, is fulfilling the logistics crane contract (a 275t crawler crane and 65t rough terrain crane).
While the prospects of the LNG industry in Western Australia are impressive, it should be borne in mind that statistics compiled by the Department of Mines and Petroleum show that the commodity value of the LNG industry is less than a quarter of that of the iron ore industry. Crane and lifting service providers who missed out on the major Gorgon contract are active on iron ore and other resource projects. Sarens has a significant involvement in the Sino Iron Ore project, which is the largest such project in Western Australia at the present time.
LNG production in Western Australia increased by 23% in 2009 compared to 2008; but this was marked by a sharp decline in commodity prices that saw the actual sales value for LNG decline by 22% over the same period. Projects under construction or in planning indicate that the volume of LNG production in Western Australia will continue to rise strongly.
A joint venture of Australian company Tutt Bryant Crane Hire (TBCH) and Italian heavy lift and transport specialist Fagioli was runner up to Mammoet for the Gorgon heavy lift and transport contract. TBCH is substantially owned by Tat Hong.
Although there are usually no prizes for second place, the joint venture goes beyond a tender for a single project and has led to TBF Oceania being set up as the entity for TBCH and Fagioli to work together in tendering for and working on future projects in Australia, New Zealand and Papua New Guinea. In terms of the size and diversity of fleet and skills available to it. TBF Oceania is a major force, not only regionally but globally.
The arrangement between the companies is one that suggests a high level of trust between the parties, as TBF Oceania does not have permanent staff or equipment, with people and equipment seconded from the partners according to availability, and other staff and equipment recruited and hired where necessary. TBF Oceania effectively operates as a shop front for mining and resource companies to deal with a single entity for major projects.
TBF Oceania Executive Director Rob West, who also heads TBCH, points out that when the Tat Hong fleet is also taken into account, TBF Oceania has available to it crawler cranes up to 650 tonnes capacity through TBCH, 800 tonnes through Tat Hong (with a 1600 tonne crane in order) and up to 1350 tonnes through Fagioli. In addition both TBCH and Fagioli have SPMTs, TBCH has a large gantry system and Fagioli is an acknowledged world leader in tower lifting systems.
Although TBF Oceania made it to the final cut for the Gorgon contract, West concedes that while both TBCH and Fagioli have excellent records individually, there could be a perception that they are untried as a combined force. As a result TBF Oceania is working hard to secure a contract that can help it to remove this as an obstacle to winning a major contract.
West believes that a jacking and skating system developed by Fagioli for the pioneering Adriatic LNG project (the world’s first offshore gravity-based structure LNG regasification terminal) offers significant benefits for constructing facilities in Australia using large modules.
TBCH has supplied cranes to most recent LNG projects, including the supply of SPMTs for moving a 620t temporary living quarters module for the construction workforce on the Pluto offshore platform. This was built in the Australian Marine Complex Common Use Facility (AMC-CUF) at Henderson, south of Perth.
Freo Group Limited (Freo) is arguably the fastest growing privately owned crane company in Australia, although its diversification is such that it would not like to be regarded primarily as a crane company.
That growth is exemplified by the company’s recent purchase of a 750t capacity Manitowoc 18000 crawler crane, when only a few years ago Freo did not operate a single crawler crane.
Incidentally, the largest conventional crawler cranes permanently based in Australia are the Manitowoc 18000, which is also operated by Lampson Australia and engineering company Monadelphous, and the 750t capacity Liebherr LR 1750, bought by Boom Logistics in late 2009.
Apart from crawler cranes, Freo operates AT cranes up to 500t capacity, rough terrain cranes of all sizes, truck cranes and pick and carry cranes. It also offers heavy haulage, oversize transport, remote camp installations, warehousing and logistics support and civil construction solutions. To date it does not operate SPMTs or heavy lift gantry systems, but given Freo’s growth path nothing can be ruled out for the future.
Freo participated with overseas partners in unsuccessful bids for the major heavy lift and transport contract on the Gorgon project, and Managing Director Tony Canci sees this as one way for the company to grow and compete for work on the largest projects in Australia.
He says, “We know that there are some times when the best way to proceed is with a partner having specialist expertise. We are willing to do this where necessary, and have the ability to provide ongoing local support and expertise for the life of a project.”
A history of overseas companies entering Australia to perform work on major projects and leaving afterwards has created a belief in some quarters that local companies are not receiving the opportunity to compete at this level. On local construction projects, this could provide benefits for Australia in having a larger and more diverse range of heavy lift and transport solutions permanently or semi-permanently based in Australia, and available to work across a range of projects to provide greater efficiencies and locally-based expertise.
Canci reflects this in saying, “The industry has seen a significant recent attempt by foreign suppliers to penetrate the Australian resources market, which has remained relatively stable during the GFC. One strategy has been to take over small local companies to demonstrate local content.”
“We are a long-term West Australian family company that has grown through having good people and good equipment and a strong strategic plan that challenges the company to respond to client needs; and by embracing the Australian ‘can do’ attitude.
“However we recognise that the trend towards modular construction requires a shift in strategic direction and we have been encouraged by our existing clients to build our expertise and product mix, with our new Manitowoc crane being just one element of this,” he adds.
Freo has recently opened a quarantine facility at the Australian Marine Complex near Perth, to meet the need on major projects for a cleaning, fumigation and wrapping service for equipment and modules arriving from overseas. This trades as Australian Quarantine Cleaning Services, and Freo uses partners with specialist expertise to perform the fumigation and wrapping aspects. The Gorgon project requires this type of service for shipments to Barrow Island.
Monadelphous Group has reversed the recent trend in Australia of engineering companies dry hiring the bulk of their large cranes from specialist hire companies, and its fleet of over 100 cranes now includes a 750t capacity Manitowoc 18000 MAX-ER, purchased at the same time as a 400t Manitowoc 16000 MAX-ER and a 250t Manitowoc 999. Monadelphous’ aim is to be self-sufficient where possible, to assist in controlling the availability and allocation of equipment and optimizing customer service.
With the arrival of this crane, Monadelphous created a new Heavy Lift department within the Divisional Service section of its Engineering Construction (EC) division, to accommodate large cranes and their crews. This again goes against the current industry norm of hiring cranes and crews for the duration of a project to having crews permanently assigned to particular machines.
EC Divisional Services general manager Mark Pensabene said, “This has advantages in providing crews with training specific to their machines, increasing familiarity with and care of the equipment, and increasing control over the timing of work and procedures used.”
Monadelphous has been implementing internal changes to accommodate the greater use of modularisation in the mining, mineral processing and oil and gas industries, and set up a wholly owned subsidiary (SinoStruct) in China 3 years ago to build modules. Pensabene sees the Manitowoc 18000 MAX-ER as an ideal size for unloading and assembling modules built by SinoStruct.
Monadelphous has continued to double its size every 5 years, and the continuation of this trend and strategic directions, such as the enhanced modularisation capabilities, could over time see Monadelphous play a significant role in larger and more diverse projects.
