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46

December 17-78,

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The Weekend Australian Financial Review www.afr.com

Pers ect lve

Little more than a pipedream 10 years ago, the pace and size of the natural gas developments at Gladstone have taken everyone by surprise.

more than 100,000 cubic metres of

liquefied gas. Some $1.8 billion in

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royalties will flowto Queensland taxpayers over the next decade, uP to half of which will be spent on education and training. "It's huge in terms of the value of the product going out, the revenue to the state government and the revenue to the commonwealth government as well," Ken King, Angela Macdonald-Smith chief executive of the Gladstone Economic and Industy The modest central Queensland Development Board, says. port city of Gladstone is seeking to "But primarily it adds about do what has never previously been another 1000 operational jobs to a attempted: to turn itself into one of the world's major natural gas e)qort worKorce that is currentlY about 12,000 directly or indirectly linked hubs within just five years. to the resources industry so it's Even for an industrial citY that significant in terms of an hs lived through resources booms employment generato! too." before - through decades of coal, The pace and scale of the aluminium and chemical e)orts development of an industrY that the liquefied natual gas revolution that has hit town is something else. Queensland Premier Anna Bligh says was little more than a PiPeUnderpinned by the fast-growing dream I0 years ago, has taken economy of China, which usurPed everybody by surprise and is the US last year to become te inevitably causing some serious world's biggest energy consumer, Queensland's rapidly emerging LNG growing pains. It also coincides with several sector won't be dimmed l0 or 15 other major industrial years hence but has a Projected developments in Gladstone, future of 40 or 50 Years or more. including the $2.5 billion first "This is different to our Past phase of the Wiggins Island coal resource boom: this is going to be a export terminal, where sustainable boom that's going to go construction started in September, on for decades," says Leo Zussino, the planned $US3.8 billion the chief executive of Gladstone Gladstone Pacific Nickel venture Ports Corporation. and proposals for oil shale and "We're basically establishing a steel plants. precinct which is the Qatar of the Pressue points have built uP as a Pacic; it will be the second-largest result. Smdler businesses in concentrated LNG producing Gladstone complain of losing staff precinct in the world." and spiralling wage costs. A rental The four mega-projects, to be crisis gripping the citY is onlY built cheek by jowl on Curtis Island in Gladstone Habour, involving a likely $70 billion of investment, are central to Australia's bid to topple Qatar as the world's biggest supplier of LNGbythe end of the decade. The first three projects - led bY British gas giant BG GrouP and Australian comPanies Sartos and Origin Energy - are alreadY under construction with the first exPorts scheduled to be shipPed in 2014, 25 million tonnes of _ rising to about

these Iarge organisations at the camp and eam perhaps $100,000 a year." Kevin Berg, general manager of the Gladstone operations of Bechtel, the US company that is the

primary engineering contractor for all three of the plants under

construction, recogrrises the huge size of the challenge. His taskwould have been much simpler had the widly expected consolidation of the rival LNG projects eventuated. But each venture has resolutely continued along its independent path, despite the estimated $4 billion of investment costs that could have been saved through rationalisation. "Never before has this been done: three huge projects with seParate assets being built in close proximity to each other," Berg says. The island location presents obvious logistical difficulties, but Gladstone's industrial history its infrastructure and amenities, makes the task a lot easier than it would be
at a remote, virgin site such as Iames Price Point on the KimberleY coast of Westem Australia, the chosen location for Woodside Petroleum's Browse LNG Plant. It should also help with attracting

Each venture has

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LNG a year once at full caPacitY. A fourth project, owned bY oil giants SheU and PetroChina, is due tb follow nuo or three years behind.

resolutely kept to its independent path, despite the 54 billion of investment costs

the 8600 workers e:ected to be required during the peak construction period for the first three plants in 2013-14. Bechtel already has some 3500 people working on the LNG Projects and another 1000 on Rio Tinto's $2.I billion Yarwun alumina expansion nearing completion on the mainland, some of whom will switch to the gas projects. Gladstone locals ae getting priority in jobs, while others who were lured west by the resources boom over the past few Years are heading back. Bechtel will hire 400 adult
rs

The gateway
The Abbot Point Coal Termina['s expanslon has the smalltown of Bowen thinking big.
Mark

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Brunker knows the exPansion of Abbot Point will change the face of Bowen (population 12,000) and create thousands ofjobs for locals who normally have to leave town to earn a living.
Bowen - halfway between Townsville and Mackay - has been the target of big Projects before.

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land world LNG stage to sit alongside

major centres such as Qatar's Ras Laffan, Binhrlu in MalaYsia and Karratha in Western Australia. What makes the wealthY new industry more remarkable is that it is based on what was originallY a waste by-product, a near-Pure methane gas that had to be flaed or discaded during the mining process for coal and has never previouslybeen used for LNG. Gas extracted from the abundant coal seams of the Surat and Bowen basins in Queensland will be tansported through high-pressure underground PiPelines some 400 to 500 kilometes to Gladstone. From there it will be piped across to Curtis Island for liquefaction in one of the four massive Plants. Once in liquid form - reduced to one-six-hundedth of its original volume - the LNG will be shiPPed by double-hulled tankers to customers in China, JaPan, South Korea, Malaysia and SingaPore' When fully operational, nine or l0 tankers a week will be docking at one of the four jetties that will jut 4out from Cuftis Island,.each loading

rationalisation.
erpected to be relieved once more of the at least 7000 workers' rooms planned for Curtis Island ae builtWaiting lists at childcae cenes

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have reached crisis point. .An outbreak of disease in fish in the habour has grabbed headlines recently, but while environmental groups have linked it to a $800

million port dredging Project, it may be connected instead with last

erbated ning of apprentices in recent Years, saYs Krry Whittaker, chief executive of
Gladstone Aea GrouP APPrentices,

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and carpentry form workers. Otlers workers are coming from NSW Victoria and Western Australia, while importing skilled people, probably from Ireland, is a last resort. By 20f3, some 6500 PeoPle will be living on the project sites on Curtis Island, with another 1200 to 1500 commuting ftom Gladstone and surounds. The on-island population, who will be a flY in, flY ut worKorce, will enjoY the use of sporting grounds, tennis courts, a gymnasium and film theatres. "We have to make sue the quality of life is a Positive experience," says Berg, who expects the attractions of the region's weatheB proximitY to the Great Barrier Reef and to the amenities of livable towns will help win workers to Gladstone from rival resouces powerhouse, Western Australia. He says Gladstone's communitY is "the most welcoming I've ever been exposed to" in his caeer at Bechtel. "I have a really positive feeling aboutthe projects," he saYs, "given
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But Brunker, a loock-about minutes' drive north of Bowen, is set to become one of the world's north Queenslander born in the

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which employs apprentices and provides them to businesses in the

region. "The landscape here has definitely changed and it's not just the trades: its waitresses, retail, warehousing and logistics, aged care, childcae, all of those industries are being affected bY this," Whittaker says. "It's veryhard to find a good waitress because You can be a cleaning lady fpr one,of
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industrial development, Zussino

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"This is a very planned and structured develoPment," he saYs. "here are not manY cities aound the world that asPire to be a sigrrificant industial centre, but ou

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