Sunday, December 31, 2017

LNG: Challenges and lessons Learnt - Australia

Key Learnings From Five (Concurrent) Australian Projects

it’s my personal experience that LNG projects require truly global perspective rather than just a company strategy. Oil and gas industry is committed to reduce the carbon footprint from fossil fuels; going in the future, LNG business has challenges of its own; above the ground risk is as important as subsurface risk. Lot more can be learned from Australian LNG experience, that had almost five LNG projects running concurrently.

 According to industry sources, some of the reasons for high costs are; Absence of synergies from 5 projects that could reduce the infrastructure cost, high cost of regulatory environment due to inadequate  involvement of communities for environmental concerns, not having trading flexibility to mitigate commodity price fluctuation and inadequate focus on defining scope well resulting in cost escalations and project schedule slips . Scarcity of resources in Australia, has also driven up the wages and costs and finally relying solely on legal framework, rather than early engagement of stakeholders & communities has given a negative political sentiment to oil and gas industry in some regions in Australia.

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