A mini boom in New Zealand’s small oil and gas industry has been remarkably fruitful for engineering and construction companies in Western Australia, with Clough being the third local company to sign a major contract across the Tasman.
A mini boom in New Zealand’s small oil and gas industry has been remarkably fruitful for engineering and construction companies in Western Australia, with Clough being the third local company to sign a major contract across the Tasman.
Perth-based Clough last week signed its biggest contract in two years, worth about $200 million, for engineering, procurement, construction and installation work on the $480 million Maari oil field development.
This follows Technip Oceania being awarded the design, construction and commissioning work on Origin Energy’s $800 million Kupe gas project.
It also follows work by Kwinana fabrication firm, Ausclad Group, to build the jacket for the $745 million Pohokura project.
The ability of WA engineering firms to win work in New Zealand holds a certain irony, since they missed out on WA’s biggest oil and gas project, the North West Shelf venture’s $2 billion train 5 expansion.
The engineering for train 5 is being performed by international firm FosterWheeler in the UK.
The NZ projects also illustrate the trend toward risk sharing by engineering firms and project sponsors.
Clough managing director David Singleton said the work on the Maari project was originally expected to be on a fixed-price basis, but cost increases and scheduling problems were forcing project sponsors and engineering contractors to rethink their approach.
The result is that the Maari work will now be done as a reimbursable engineering, procurement and construction management (EPCM) contract.
“It’s transformed the relationship between the two companies to one of absolutely working together,” Mr Singleton said.
The Kupe project has gone a step further, with the project owner forming an alliance with its major contractor, Technip Oceania.
The alliance team will be led by senior executives from both companies and resourced by staff from both companies.
Origin’s executive general manager for major projects, Andrew Stock, said having the project owners and the major contractor working as one team with shared objectives and shared risk/reward arrangements was the best way to manage the challenging and competitive oil and gas construction market.
Technip Oceania, based in Perth, is the Asia Pacific arm of French group Technip.
Clough’s Mr Singleton said another pleasing aspect of the Maari contract was the role played by Clough’s technical experts.
Clough developed a self-elevating platform that can be installed faster than a conventional platform and does not require a large heavy-lift vessel for installation.
Mr Singleton said Clough had employed more than 50 people on the Maari project since January, when the company signed a letter of intent.
Assembling the project team before the signing of a final contract was another big change in the engineering market as a result of the skills shortage, he said.
As well as the Maari contract, Clough announced two other contracts last week.
Its joint venture with Aker Kvaerner has been contracted to install the platform topside module for the North West Shelf’s propo-sed Angel gas field development.
Clough has also been contracted by Anzon Australia for subsea installation works associated with the Basker and Manta oil field developments off Victoria.
The value of the three contracts was $265 million.
Mr Singleton said the latest contracts were a big step towards Clough’s goal of substantially reducing the risk profile of its business.
