Australia’s biggest fabrication hall is the centrepiece of a $200 million infrastructure project south of Perth. Mark Beyer asks if this is an astute investment that will foster industrial growth or an extravagant use of taxpayers’ money?
ONE of Western Australia’s most ambitious infrastructure projects is nearing completion at Cockburn Sound.
The fabrication precinct at the Australian Marine Complex will provide the State with world-class industrial facilities – at a world-class cost of $200 million, courtesy of Australia’s taxpayers.
The new infrastructure is designed to help WA companies get more of the work flowing from big mining, industrial and defence projects in the region.
The number one target is the fabrication and assembly of large production modules for the likes of Woodside’s Laminaria oil project and GTL Resources’ gas project.
If these multi-million dollar con-tracts are completed in Perth, a raft of spin-off work opportunities will flow to local workshops and other suppliers.
But critics of the infrastructure project, including some of the biggest engineering companies in WA, believe it is fundamentally misguided.
“Our labour costs are still too high and it’s too far away from the projects. It will never be able to compete with Asia,” said one engineering executive who declined to be named.
This comment summed up the scepticism of many people, who agree the new facilities are world-class but doubt they will attract much, if any, extra work to WA.
A 40-hectare common user facility, including a giant assembly hall, is central to the new infrastructure.
The task of promoting and managing the common user facility is in the hands of joint venture company JBFM Babcock.
The “common user” nature of the facility was a unique selling point, according to JBFM Babcock’s business development manager Peter Henderson.
“There is no other facility like this in the world,” he said.
It is Government-owned and available to all private sector companies, in contrast to facilities else-where that are owned by individual companies.
The facility has been designed to support multiple, overlapping projects.
The massive assembly hall is 80 metres long, 60 metres wide and 45 metres high.
It is mounted on a rail system and can be moved 80 metres east-west.
The hall has a demountable wall at the western end leading to two fully-protected wharves.
The larger wharf can handle 15,000 tonne modules and service 300-metre long vessels while the smaller wharf can handle 3,000 tonne modules.
It will also be possible to use Tenix Defence’s shiplift, which is located next to the common user facility.
The common user facility also has Australia’s largest portal crane, with a 150-tonne capacity. It includes amenities for a workforce of 500 per shift, plus project offices and warehouse facilities.
Adjacent to the common user facility is a new 80-hectare industrial estate that is currently being marketed by Landcorp to related industries.
JBFM Babcock has estimated the common user facility could reduce costs by as much as 30 per cent compared with alternatives in Australia.
The projected savings come from two main areas: the facility already has the plant and equipment that engineering companies would need and the sheltered all-weather conditions in the assembly hall should allow staff to be more productive.
Mr Henderson is positive about future prospects.
“We are getting a broad range of interest from oil and gas projects such as Woodside’s Enfield FPSO and Perseus projects, resource projects such as GTL and Dampier Nitrogen, mineral processing projects and marine and defence projects,” he said.
“We are also getting interest from the oil and gas services sector and a range of smaller businesses.
“We are confident that the facility will see steady business growth.”
A key milestone for the facility will be the completion of a site agreement with unions.
Mr Henderson said the agreement was very close to being endorsed, including by the metalworkers’ (AMWU) and electricians’ (CEPU) unions.
The site agreement, as well as safety and environmental guidelines set by JBFM Babcock, will cover all companies that use the facility.
The ‘topside’ units for Wood-side’s Enfield oil project are a prime example of the work being targeted for the common user facility.
The Enfield project, which remains subject to final go-ahead, involves construction of a floating production, storage and offloading vessel.
Woodside has already invited international shipbuilders to tender for construction of a $100 million, 270-metre long hull.
Fabrication of the topside equipment is expected to commence later this year and will be highly sought after by Australian and international engineering firms.
Woodside spokesman Tony Johnston said the company had been closely monitoring the development of the common user facility and had numerous discussions with the Government and the facility manager about the services it could provide.
However it has put the ball firmly in the court of prospective tenderers.
“If one or more tenderers believe that the use of this facility will deliver a more competitive outcome, we would treat their bids like all other proposals and fully evaluate them taking into account all of the costs and risks,” Mr Johnston said.
The Enfield project is very similar to Woodside’s Laminaria project, which helped galvanise Government interest in building the common user facility.
United Group was contracted in 1997 to fabricate and assemble eight topside units for the Northern Endeavour floating production vessel.
It fabricated the structural steel, pipe spools and vessels at its Kwinana workshops then transported them to a temporary wharf at north Fremantle for final assembly.
The $82 million project had to overcome major challenges, including limits on road access, wharf capacity and other infrastructure, but was ultimately successful.
Major project work currently underway in Brisbane provides another point of reference.
US-based engineering company CBI Constructors built its own wharf on land leased from the Port of Brisbane.
It is currently using this open-air site for two major fabrication and assembly projects, for Shell and Comalco. The latter project involved the assembly of about 80 tanks averaging 12-metres in diameter for Comalco’s Gladstone alumina refinery project.
While CBI’s site is very modest compared to the common user facility, the cost was also very modest, and it was all private sector money.
The owners of JBFM Babcock bring an abundance of experience to their task.
They comprise international marine and defence contractor Babcock and three local business executives: Ivan Bristow, formerly with engineering and project management company Brown & Root and currently managing director of QED Occtech, Grant Moffatt, formerly with Australian engineering group United, and Richard Clark, formerly with inter-national marine construction group McDermott.
McDermott’s 84-hectare Batam Island fabrication yard and marine base in Indonesia is the kind of private sector facility that the common user facility will be competing against.
Since 1980 it has supplied more structures for the offshore oil and gas industry than any other facility in South East Asia.
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