“In a number of cases the financial fall-out of head office decisions on project location and infrastructure duplication make the incremental cost of labour pale into insignificance.”
Mr Dawson said RISC’s analysis showed there are unique issues at each of the major LNG projects where there have been major cost and schedule blowouts.
- The Wheatstone Project is located on a floodplain and the site had been rejected for earlier projects, while Gorgon has been developed on Barrow Island – a Class A nature reserve.
- Pipelines from three Western Australian projects – Pluto, Wheatstone and Gorgon – cross each other on the way to shore.
- Infrastructure collaboration at Queensland’s Curtis Island could have saved LNG producers billions of dollars. Instead there has been triplication in most project areas including land, storage and offloading requirements, utilities and upstream development;
- The Ichthys and Prelude projects in Australia’s north are being developed using world first technology options which contributes to cost escalation.