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Awards for local content

WOODSIDE’S Train Four expansion project and Rio Tinto’s HIsmelt project are the inaugural recipients of commendation certificates for their efforts to maximise local industry participation.

The commendation certificates were awarded by the Industrial Supplies Office of WA, a government-funded agency that works with projects to maximise the amount of work performed by local industry.

“We wanted to reward two projects that have done a fantastic job,” ISO director David Kobelke said.

“The certificates recognise the outstanding corporate culture on these projects.”

The awarding of the certificates coincided with claims that Wood-side was failing to maximise local content on its next big project, the $1.5 billion Enfield oil project.

Australian Manufacturing Workers’ Union State secretary Jock Ferguson said Woodside could send all of the fabrication work for the Enfield project offshore.

“There are several companies in WA with the capacity and skills to effectively complete components of the fabrication,” he said.

“Despite this, however, Wood-side is still considering having the entire project sent offshore, probably to South Korea.”

Mr Ferguson foreshadowed imminent industrial action following an executive meeting this week.

Mr Kobelke said the commendation certificates for the Train Four and HIsmelt projects were based on effort rather than outcomes.

This recognised that some projects inevitably have low local content because they need to import equipment not manufactured in Australia, while other projects with a large amount of civil engineering work could easily achieve high local content levels.

“Both of these projects did things to lift the bar higher,” Mr Kobelke said.

An important factor was that Train Four and HIsmelt focused on local content opportunities during their early planning.

“It’s at the bankable feasibility stage that local content can be dramatically improved,” Mr Kobelke said.

“If projects fall down at that stage, and that is where most fall down, you are reducing local content.”

The $1.6 billion Train Four project, which is more than three quarters complete, has achieved an overall Australian content level of 68 per cent.

Mr Kobelke said if the calculation excluded work that Australian industry was not capable of performing, the local content level was about 95 per cent.

He said an outstanding feature of the $400 million HIsmelt project at Kwinana was its effort to ensure local firms could supply international contractors.

“They contractually obligated the overseas suppliers to come back into the Australian market, interrogate the Australian market and document what they have done to provide Australian industry with opportunities at the second tier level,” Mr Kobelke said.

The Train Four project also featured a handful of secondtier ‘boomerang’ contracts.

Bassendean firm Specialised Welding, for instance, won a $300,000 contract to supply stainless steel pressure vessels to Japanese pump manufacturer Nikisso, which in turn had won a larger supply contract with Woodside.

Mr Kobelke was full of praise for a third project, Santos’ $480 million Mutineer-Exeter oil project, which is about to commence development.

“Santos is putting in a huge effort to get second-tier suppliers involved. It’s amazing what they are doing,” he said.

The Mutineer project, like Enfield, will use a floating production, storage and off-take (FPSO) vessel.

 

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