John Holland wins $160m Apache contract

Construction contractor John Holland Group has blasted its way into WA's booming oil and gas sector with a $160 million contract to build Apache Energy's Devil Creek gas plant in the Pilbara, snaring work originally to be undertaken by Clough.

Apache initially awarded Perth group Clough a $260 million contract to design and build the Devil Creek onshore facilities in April last year, followed two months later by a $200 million contract to build all associated offshore facilties at the Reindeer gasfield which will supply the plant.

But both contracts were suspended in December when the financial crisis left Reindeer without a foundation gas customer and the project was deferred indefinitely.

Yet the project was revived just one month later when Citic Pacific signed a major gas supply contract for its Cape Preston iron ore project, and Apache put the contracts back out to tender.

Clough subsequently secured a $45 million contract to provide onshore engineering, procurement, and fabrication of the plant processing modules in March, but did not tender again for the construction contract because it clashed with a contract awarded for the PNG LNG project.

John Holland will now be responsible for all onshore construction and delivery of the project. Work will commence next month in a bid to produce first gas in 2011. The offshore contract is yet to be re-awarded.

John Holland's contract encompasses all plant construction, including gas treatment/dehydration facilities, condensate liquid stabilisation, storage and road loadout, gas compression and metering. An onshore pipeline will also be constructed along with a connection to the existing Dampier-Bunbury gas pipeline.

For John Holland, the deal represents its first major win in its bid to re-establish itself in the booming oil and gas sector with and offset the slowdown in mining project development, and comes just two months after it entered an alliance with specialist global oil and gas engineering group Arup.

"This new work is part of our long-term strategy to bring the full scope of our construction services to bear on emerging oil and gas projects across Australia," said Brendan Peterson, general manager of John Holland's Structural Mechanical Process division.

"Importantly for our clients, the diversity within John Holland ensures these complex projects can be delivered from start to completion by the one contractor. We look forward to working closely with Apache Energy to move this project forward in the coming months."

The Devil Creek site is 80 km north west of Dampier, close to the North West Coastal Highway.
Contracting and engineering company John Holland has secured a $160 million contract with Apache Energy to deliver the international oil and gas producer's the Devil Creek Development Project.

The contract is for construction of a new onshore gas plant in Western Australia's Pilbara region.

The scope of work includes the construction of an onshore processing facility with specific capabilities in gas treatment/dehydration, condensate liquid stabilisation, storage and road loadout, gas compression and metering.

An onshore pipeline will also be constructed along with a connection to the existing Dampier to Bunbury Natural Gas Pipeline.

The new processing facility, to be known as the Devil Creek Gas Plant, will be located approximately 50 kilometres from Karratha and in close proximity to the North West Coastal Highway.

The project will commence in September 2009 with completion expected by mid- 2011.

Full announcement below:

John Holland to Deliver Devil Creek Development Project for Apache Energy Limited

Perth, 28 August 2009: John Holland has today secured the $160 million contract to deliver Apache Energy Limited's Devil Creek Development Project (DCDP). The contract is for construction of a new onshore gas plant in Western Australia's Pilbara region.

The DCDP will recover and process gas reserves from the Reindeer gas field located approximately 80 kilometres northwest of the Port of Dampier. The scope of works, incorporating a significant volume of earthworks and civil construction, includes the construction of an onshore processing facility with specific capabilities in gas treatment/dehydration, condensate liquid stabilisation, storage and road loadout, gas compression and metering. An onshore pipeline will also be constructed along with a connection to the existing Dampier to Bunbury Natural Gas Pipeline.

The contract award is the first in a series of moves to further position John Holland as a leading player in the delivery of complex processing plants in the oil and gas sector.

John Holland Group Managing Director, Glenn Palin, said: "Today's award highlights the diversity within John Holland's business and our unique ability to bring together civil and highly specialised construction services into an integrated bid team. It is particularly pleasing to note that this project will combine the civil construction skills of our Western Region business with the specialist skills of our SMP business."

General Manager of John Holland's SMP business, Brendan Petersen, commented: "This new work is part of our long-term strategy to bring the full scope of our construction services to bear on emerging oil and gas projects across Australia. Importantly for our clients, the diversity within John Holland ensures these complex projects can be delivered from start to completion by the one contractor. We look forward to working closely with Apache Energy to move this project forward in the coming months."

The new processing facility, to be known as the Devil Creek Gas Plant, will be located approximately 50 kilometres from Karratha and in close proximity to the North West Coastal Highway. The project will commence in September 2009 with completion expected by mid- 2011.