From building a 200,000-cubic-metre storage tank the length of a football pitch to participating in the huge A$40 billion Gorgon LNG project, the scope of Laing O’Rourke’s oil and gas capabilities are becoming established within its Australian business unit. Outside of the company, however, news of its expertise is only just starting to filter through the national industry – but the publicity trail is about to step up a gear.
It’s a relatively fledgling operation, and the team’s objective is to get Laing O’Rourke’s name in the mix for every new bidding opportunity. It’s made good strides already. This September saw the branding of the Australian oil and gas business’s office on Brisbane’s Eagle Street. And what the man at its helm doesn’t know about the global sector really isn’t worth knowing.
Terry Bayliff is not, as the song goes, from a land down under. Originally from the Lake District in the north of England, the keen sportsman is now more likely to be spotted cycling round the Brisbane river or diving in its 75-degree waters. In fact, it’s been quite a while since Terry had his feet rooted firmly in the UK’s fells.
His 40-year career in the construction industry, specifically oil and gas, has taken him to pretty much every geographic hotspot in the sector you care to name: the UK, Qatar, India, Sumatra, Borneo, Saudi Arabia, Indonesia, Sakhalin, Kazakhstan and Abu Dhabi, to name ten.
While project managing an onshore gas development for Bechtel in Abu Dhabi in early 2008, mutual acquaintances introduced Terry to Ray O’Rourke.
What attracted you to Laing O’Rourke?
Ray’s a charismatic and convincing character. But seriously, my wife and I wanted a change in lifestyle. I’d been working in the Middle East for over 20 years. We’d enjoyed our previous time in Australia and the opportunity to return and join a company with a lot of similarities to Bechtel was too good to pass up. Both are private companies, with strong leaders, and Laing O’Rourke’s vision of doing self-delivery work was very attractive.
My career has focused heavily on the execution and operational sides of business. To be at the front end, meeting customers and selling our capabilities, is a new challenge. Laing O’Rourke’s oil and gas book is yet to be written, so I’m excited about co-authoring one of the chapters.
How do you think the next chapter of the global sector will read?
If we look at the world market for LNG, Qatar has the monopoly, but things are slowing down there. And the Atlantic basin is mature, with various Nigerian and West African plants in operation.
The big growth area for LNG is Australia for two reasons: the major marketplaces are Korea, Japan and China, so Australia is geographically attractive for shipping. In Western Australia, Woodside and Chevron have had projects on the cooking pot for ten to 15 years and these are coming to fruition. And the new player on the block, which five years ago no one was talking about, is coal seam gas. Those plants are all going to be located on Curtis Island in Queensland.
What is the outlook for the company?
Laing O’Rourke has a 1.5-million-tonne-a-year project for LNG Ltd on Fisherman’s Landing, just outside Gladstone, which has lease and environmental approval. That’s currently suspended [because of Shell’s acquisition of Arrow], but, when that restarts later this year, we’ll be the only contractor doing a coal seam gas project.
The other benefit is that there are a lot of upstream facilities – small gas plants, gas-development facilities, water-treatment plants, power stations – that will give us spin-off civil engineering and infrastructure work for our broader business.
There are huge opportunities for us. We expect the Australian industry to generate A$80-100 billion of LNG projects over the next ten years.
Excitingly, we’re the only contractor in the Australian oil and gas sector that provides a multidiscipline, self-delivery offering. Everyone else is either a specialist in a particular area or they sub-contract out major parts of the work. As a sole-source single point of contract, we manage the interface between the different parts ourselves, so there are a lot of risks we can remove.
What are the imminent priorities for Laing O’Rourke in making its name in oil and gas?
The oil and gas sector has an investment potential in excess of A$300 billion a year. That’s expected to grow by up to 2.5 per cent until 2030, so it’s a sustainable sector. Take away the offshore and oil prospects, and the global gas business alone is A$100 billion.
Because it’s so big, it’s important that we establish what our role is going to be. We need to look at the next wave of projects. In places like Canada, where LNG from shear oil is going to be a feature in the next three to five years, and in the Middle East, where we have an operation at the moment, there are projects ongoing. It’s possible that coal seam gas in Indonesia will become a critical factor, and so we’re planning ahead. Our infrastructure business has an office in Jakarta currently focusing on the mining material handling side of things.
We’re looking at opportunities for partnering and to develop our capabilities in all regions. We need to think globally and operate in different hubs so that we can expand and diversify. When the Australian marketplace eventually turns down in around 2017, as the current major projects come on stream, we’ve got ready availability to migrate people into other regions. We want to understand what the market is doing everywhere. We want to get ahead of ourselves strategically and be prepared for the next challenges.