Chevron: Services Companies Critical to Australia's LNG future

Chevron: Services Companies Critical to Australia's LNG future
Chevron Australia's Managing Director Roy Krzywosinski has stressed the importance of maintaining strong relationships between LNG operators and services companies.

Australia might be receiving plenty of praise as it builds towards becoming a leading global exporter of liquefied natural gas (LNG) but there are still fears the country won’t be able to make the most of this opportunity.

According to Chevron Australia Pty Ltd.’s Managing Director Roy Krzywosinski, service providers will play a key role in helping to overcome these fears by demonstrating Australia has the capability and capacity to support a globally competitive LNG industry.

He believes it is critical Chevron, and other major operators around the country, maintain strong relationships with services companies beyond the construction phase to deliver a healthy sector and prosperous domestic LNG industry.

Roy Krzywosinski, Chevron Australia MD
Roy Krzywosinski, Chevron Australia MD, Source: APPEA

Speaking at the Australian Petroleum Production & Exploration Association (APPEA) Conference in Melbourne recently, Krzywosinski said the LNG industry in Australia was in transition and would rely on a services sector that was prepared for the changing environment.

“The industry’s capacity has never before been stretched or tested (like this) with the addition of 13 new gas trains. I believe the most successful services companies over the long-term will be the ones who are flexible, adaptable and cost competitive,” Krzywosinski said.

“The services industry covers everything from camp services and logistics to plant maintenance, facilities management and subsea infrastructure just to name a few. Much of the work is highly skilled, highly technical and highly specialized.”

Key Challenges

According to a recent report by management consultants, Accenture, LNG exports can contribute $42 billion (AUD 55 billion) to Australia’s gross domestic product (GDP) in 2020.

The report states that in order for Australia to secure its place as the world’s leading LNG producer there is a need to improve international competitiveness, remove regulatory constraints and introduce a more flexible labor relations regime.

Leading LNG operators and service providers surveyed for the report responded that, despite these challenges, they believed the industry was prepared for the transition in several areas, including building workforce capacity and capability, and tuning and adapting business models for production.

Following a similar theme, Krzywosinski singled out two major obstacles standing in the way of Australia being successful during the LNG operations phase.

“It is a national imperative we get the policy settings right to attract the next wave of investment. Some would say this represents a potential $100 billion waiting in the wings with the associated economic benefits,” he said.


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B. El Wazni | Jun. 14, 2015
I agree with Krzywosinsk to his concern mainly when his project management team in Australia failed to control the cost of Gorgon LNG project and its budget jumped from about $28 billions to $55 billion. Completion and stat up date of the project was delayed which added more revenue lose to the company. The service and interest of the $55 billions loan to the lenders will be a huge burden and will consume a big amount of the future LNG revenue.Adding to this the fear from the drop in LNG prices and the competition from third world developing LNG producing countries which use slave labors that makes the cost of turnaround very low compared to Australia hence Mr. Krzywosinsk is hoping regulatory constraints are removed so Chevron can bring over 10,000 labors from Nepal, India, Thailand , etc.. He and his team were enjoying the loose is budget and time since the start of the project and when it comes to operations and revenue that will affect Australia, he wants the country to change regulations and be flexible to clean his team miss during the project period. Every time people like Krzywosinsk says we do not want to point the finger, thats FINE, but they have to be responsible for their mistakes.

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