Inside this issue

Darwin – Supply and Service Offshore and On

Darwin is now seen as a major location in the campaign to tap into the enormous energy supplies that lie within an arc across the top of Australia—from the Browse Basin in the west, to the Timor Sea directly north of this well-positioned tropical city. As the northern terminus to the Adelaide to Darwin railway, it has also become an important centre for supplying many of the important mining operations in the north.

Stepping up its efforts to increase its supply and service capabilities, Darwin has established new infrastructure supporting a growing activity in mining exploration and production. These facilities are based on the East Arm Peninsula, and are supported by a modern natural deepwater port that handles rig tenders, container traffic, bulk minerals and liquid trades. Added to that is the Darwin Marine Supply Base currently under construction, a facility purpose-built to service and supply offshore rigs and special projects.

The Northern Territory Government and local industry are using the city’s proximity to Asia and vast oil and gas fields that lie offshore as compelling selling points. Major projects, such as the ConocoPhillips’ Darwin LNG plant and INPEX and Total’s Ichthys project, are driving the expansion in the capacity and capabilities of the supply and service industry in the Northern Territory.

What this means is that Darwin is now recognised as Australia’s northern mining and oil and gas maintenance and operations base. The city has wide-ranging industry experience from construction and servicing to maintenance and training, and all the supply requirements in between.

Darwin’s East Arm Port is often lined with ships loading with bulk minerals bound for the foundries of China and Japan, or live cattle for export to Indonesia and beyond. The ships’ cargoes are fed by trucks plying the national highway system or the transcontinental railway whose terminus ends at the port. The railway has made a number of inland mining projects viable by reducing their bulk mineral transport costs. The railway also supplies 90 per cent of Darwin’s food and consumables, as well as supplies and equipment for mining, construction and defence.

The Territory Government, in partnership with organisations like the Industry Capability Network and the NT Chamber of Commerce, are introducing local businesses to prime oil and gas service companies operating in Asia and Europe. Through a program of international industry visits, local businesses are developing relationships and skills to capture the offshore supply and service opportunities in the region.

For example, with the growth of Floating LNG in offshore production, Darwin offers opportunities for the development of subsea supply and services, including underwater inspection, installation and maintenance. International subsea heavyweight, DOF Subsea has recently opened a branch office in the East Arm Precinct to take advantage of that specialised work.

In fact, an increasing number of local companies are now becoming an integral part of international supply chains for onshore and offshore operators. A perfect example of this is the joint venture between the global service provider the Wood Group with Darwin- based maintenance company RANms. Wood Group eventually bought RANms and since then have been successful in winning contracts with Eni.

Another local Darwin company that pioneered Darwin’s offshore supply industry is the Shorelands Group which formed an alliance with international logistics specialist ASCO to form ShoreASCO, the successful bidder to build and operate Darwin’s new $100 million- plus Marine Supply Base. That provides an efficient combination of international expertise mixed with experience-based local knowledge.

The Shorelands Group of companies, acting independently, are still very active in regional gas and oil supply. The company operates the Mungalalu Truscott Airport facility 500km west of Darwin, an operation integral to the supply of the Timor Sea’s offshore production facilities. It will soon become even more important with the US$30 billion INPEX gas project production field sited offshore near Truscott in the Browse Basin.

Further boosting Darwin’s key position in the petroleum industry was Japanese energy giant INPEX and joint venturer Total’s final investment announcement of Darwin as the onshore location for its $30 billion LNG gas project. Simultaneously under construction with the plant is Shore ASCO's Marine Supply Base servicing the project as well as a variety of offshore projects, including Shell’s Prelude FLNG project nearly 900km away.

The Base’s three-berth facility is designed to take the pressure off the port. The rig tenders will come in off the open ocean and the offshore facility’s waste will be offloaded as well as goods for maintenance. Then the tenders take on board fuel, water, mud for drilling, chemicals, machinery and goods to take back out to the drilling platforms. It’s a dedicated facility to service the offshore oil and gas industry and a professional turnaround for a tender is in eight to 12 hours.

As a result of the sustained activity, an increasing number of supply and service companies are reviewing their position and establishing a presence in Darwin. Service and support providers are taking up space in the East Arm Precinct adjacent to the Marine Supply Base which includes a 20ha assembly yard and lay down area, funded and managed by the Northern Territory Government. The area is available for short-term rental options at market rates, with land areas negotiated to suit individual requirements for a range of activities, including engineering, fabrication and assembly of buildings, oil and gas support, transport and logistics.

These facilities, combined with Darwin’s modern health and education services, transport links and lifestyle, make a strong case for its claim as a key service centre for the north Australian/South- East Asian region.

The support of oil and gas production and mining has emerged as a significant and rapidly growing opportunity for Territory-based businesses. Darwin is building a strong reputation as a reliable and competent maintenance and operations base. It is a safe, modern, tropical city with the capacity and capability to provide considerable resource and time efficiencies to the growing number of operations in the Timor Sea, eastern Indonesia and beyond.

“The support of oil and gas production and mining has emerged as a significant and rapidly growing opportunity for Territory-based businesses.”