Investment in the state's growing liquefied natural gas sector will total between $10 billion and $25 billion each year for up to 10 years, analysts say.
Investment in the state's growing liquefied natural gas sector will total between $10 billion and $25 billion each year for up to 10 years, analysts say.
Analysts at Hartleys also said today in a research note today that Mermaid Marine Australia and Decmil Group are best positioned to reap the benefits of the investment.
The analysts estimate that basins off the northwest coast of WA and the Northern Territory currently hold between 130 and 150 trillion cubic feet of undeveloped natural gas reserves.
They added that the appraised resource in the greater Gorgon and Janz field accounts for about 20tcf.
"Development is already reasonably advanced, with eight large potential projects identified over the coming decade (not including the recently announced Gorgon project)," the analysts said in the research note.
"Depending on project delays, when we model the potential project pipeline, we estimate and annual LNG investment spend on WA projects of ~$10-25bn per year for the next five years, and potentially extending for ten years."
The analysts added that most companies with exposure to the WA economy will be impacted, however not all positively.
"Some companies will see significant positive impact as they take advantage of the revenue opportunities," the analysts said.
"Other companies may suffer a 'host city Olympic Games' effect whereby their businesses miss the opportunity.
"Further to that, other businesses may find that rising costs make operating in WA uncompetitive for their industry."
Focusing on the $43 billion Gorgon project, the analysts said that local contractors can expect to secure up to $20 billion of work.
"Small companies [with a market capitalisation of less than $500 million] that can secure work over the life of the project can argue their companies are underwritten by Gorgon for the next 4-5 years."
In addition to Gorgon, there are eight large projects that make up $70-80 billion in potential investment, and analysts tip a final investment decision on Inpex's Ichthys project, Woodside Petroleum's Pluto 2 and Browse projects and Chevron's Wheatstone project to move to a final investment decision in the next two years.
