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Address to the 2011 South East Asia Australia Offshore Conference, Darwin

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The Hon Martin Ferguson AM MP

Minister for Resources and Energy

Minister for Tourism


6 October 2011

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Introduction: A remarkable year for LNG

Good morning ladies and gentlemen.

It is good to be back in Darwin for this year’s South East

Asia Australia Offshore Conference following what have

been a truly remarkable twelve months for the industry.

During this time government, regulators and industry have

all made tangible progress in improving safety in the

offshore petroleum industry - the issue which was the

focus of my remarks to you last year, and to which I will

return in a moment.

We’ve also seen final investment decisions taken on no

less than five liquefied natural gas (LNG) projects,


É three projects onshore establishing a whole new coal

seam gas to LNG industry on the east coast;

É Prelude, which is on track to be the world’s first

floating LNG facility; and

É just last week the Wheatstone project, which at $29

billion, is the second-largest investment in the

Australian resources sector - Gorgon being the



Total committed capital expenditure in the LNG sector

(including Pluto and Gorgon) is now over $140 billion.

This is an extraordinary level of new investment over a

short period of time.

Together these projects will add more than 50 million

tonnes of LNG capacity to our existing 20 million tonnes

out of the North West Shelf and Darwin LNG projects.

They’ll take Australia from being a regional hub to a global

leader in LNG with export volumes second only to Qatar.

They are underpinned by long-term supply contracts and

in some cases equity stakes from many of our highly

valued trading partners and neighbours in the Asia Pacific.

We welcome the strength this adds to those longstanding


Northern Australia

And there is more to come.


Darwin and the Northern Territory are positioned to be at

the centre of much of the industry’s future growth.

While LNG tankers are frequent visitors to Darwin Harbour

these days I understand that the visit last month by Energy

Horizon, the largest ever ship to visit the Port of Darwin,

caused some excitement.

She is a visual manifestation of the growth in this industry.

Of course all eyes are now on INPEX with everyone

eagerly awaiting a final decision on the Ichthys project,

which is expected in coming months.

I understand Sean Kildare is providing an update on the

project later today.

But can I say that I agree with the Chief Minister that a

Joint Venture decision to proceed with Ichthys would be a

game changer for Darwin.

I also congratulate the Northern Territory Government for

recognising the potential of floating LNG and for Darwin to

be at the centre of support for what will be a growing

segment of the LNG industry in Australia.


LNG Outlook

Australia is in a global sweet spot for the expansion of the

LNG industry.

There are additional projects and expansion trains moving

ahead - further proof that Australia remains a stable and

competitive place in which to invest and create wealth.

Last financial year, the value of Australia’s LNG exports

topped $10 billion.

That’s a remarkable increase of nearly 35 per cent on the

year before.

And the Bureau of Resources and Energy Economics

forecasts even higher earnings this year.

Globally over the next 20 years, the increase in demand

for natural gas is predicted to be higher than demand

growth for any other energy resource.


Gas is important for energy security and it offers cleaner

energy on a regional scale too - emitting roughly half the

carbon per unit of electricity compared with coal.

Australia is in the right region, at the right time, with the

right product.

As the ANZ Bank made clear recently, the current boom is

“not the stuff of a routine commodities boom”.

There’s something more fundamental going on - a

process that will see billions more people achieve middle-class living standards, and one that potentially has

decades to run.

Australia is playing its part in supporting this growth, with

so much of it centred as it is in our region.

The ongoing demand for our mineral and energy

commodities was made clear to me in the course of my

recent visits to China, Japan, Korea, Indonesia, Brunei

and Taiwan.


Industry recognises this - as evidenced by the record

pipeline of investment in Australia’s resource and energy


Supporting Growth

And so too does Government.

Government has an important role to play in supporting

these major projects and helping to ensure their benefits

extend economy-wide.

This goes to investments in infrastructure and measures to

support Australian content by helping Australian

businesses become more competitive and access the right


Protectionism is not the answer.

Instead, we are putting in place policies and programs to

manage growth pressures, chief among which is the need

for more workers, both skilled and semi-skilled.


The Government recognises that in the short term

companies need ready access to labour to get projects off

the ground.

For this reason we are introducing special Enterprise

Migration Agreements for mega projects, in addition to

existing migration arrangements.

The guidelines for this program have been released and

eligible projects can now begin the process of negotiating

an agreement.

At the same time the Government is absolutely focussed

on supporting the training and skilling of more Australians

with $3 billion allocated to this in this year’s budget.

The LNG sector, and the resources and energy industries

more broadly, offer a wealth of career opportunities for


The projects under construction have operational lives that

span decades, so training people today is very much an

investment in the future.


Our National Resources Sector Workforce Strategy will,

among other things, fund more national apprenticeships

and improve the retention of qualified engineers and


We are encouraging better links between education and

the resources sector.

Workforce participation is a priority and we are creating a

Women in Resources facilitator.

We are also looking at improving the mobility of our

workforce with the recently announced expansion of the

Fly-in Fly-out Coordinator pilot.

And it is absolutely vital that we do not overlook

Indigenous Australians when looking to develop skills and

a motivated workforce in the resources sector.

I would like to congratulate INPEX and Total for working

with Indigenous groups such as the Larrakia Development

Corporation to commence the process of building skills,

creating opportunities and engaging respectfully with

Traditional Owners.


This is not just happening in Darwin but in other projects

such as Browse LNG where companies and the State

Government have reached agreement with Traditional

Owners and their representatives.

I understand that these agreements are subject to

sometimes tough negotiations but we must always

remember they are delivering great opportunities for

Indigenous Australians to develop skills and business


I would like to again emphasise this concept of respect for

Traditional Owners who have taken difficult decisions to

balance development and change on their country with

opportunities to lift their communities out of welfare

dependence and poverty.

Some of the behaviours and actions that we have seen in

Broome and on the road to James Price Point have been

absolutely unacceptable and completely lacking in the

respect that is so clearly due.

There will always be a right to peaceful protest but there is

no place for racial vilification in Australia and I condemn

those that have engaged in this basest of behaviour.


The concept of self-determination requires us - all of us -

to respect the lawfully determined wishes of traditional

owners whatever they may be.

Conclusion: A final word on Safety

Ladies and gentlemen, in conclusion I turn to the all

important question of safety.

As I said at the outset there has been real progress this

year toward strengthening safety outcomes in the industry.

In August the Government hosted a very successful

International Offshore Petroleum Regulators and

Operators Summit as part of the process of consolidating

and applying lessons learnt from Montara and Macondo.

Over 400 delegates represented government, regulators,

operators and industry professionals.

They came from the Americas, Europe, Indonesia, PNG,

Timor Leste, China, New Zealand and Singapore.


And the information exchanged will go toward building a

safer industry internationally.

At the Summit the Australian Government, Regulator and

Industry agreed an Action Plan to help with the twin goals

of protecting lives and preserving the marine environment.

Industry also pledged leadership and accountability on

strategic safety priorities, and to create an Australian

capping and containment solution.

For our part, the Australian Government continues to

implement our response to Montara.

The passage last month of legislation through the Senate

to enable the establishment of NOPSEMA - the National

Offshore Petroleum Safety and Environmental

Management Authority - was an important milestone in

this regard.

Also of importance is our continued work with PTTEP

Australasia in accordance with the Deed of Agreement

between the Government and PTTEP under which PTTEP

has agreed to address the systemic shortcomings

identified by the Montara Enquiry.


The successful implementation of the monitoring

provisions of the Deed -which covers all of PTTEP’s

operations in Australia - not just Montara - is reassuring

me of PTTEP’s ongoing commitment to, and the

effectiveness of, their Action Plan.

The Government and PTTEP will continue this

arrangement, and in the process gain valuable knowledge

and experience that I am confident will have a positive

influence on corporate culture resulting in wider benefits

across other operations in the future.

In closing, I wish you a successful conference and invite

all those with a stake in our prosperity to embrace the

opportunities currently on offer - especially in LNG.

These are exciting times and I encourage you to make the

most of them.

Thank you