THE world needs more energy. Demand is increasing as more people seek middle-class lifestyles, but even so, there is awareness of the need to decarbonise and move away from coal towards cleaner alternatives.

In this context, renewables are a clear alternative, while gas, though contentious in itself, is also likely to be an important power source for some time to come.

A recent article in Bloomberg noted that “never before has natural gas played a bigger role in fulfilling the world’s energy needs” and that advocates of natural gas have argued that it can “facilitate the transition to cleaner energy, both by reducing dependence on dirtier coal and by compensating for the inability of wind and solar power to produce electricity consistently”.

Australia already hosts a number of offshore gas projects. What is more, a number of new offshore energy projects are in the offing, some based on gas and others on wind.

In developing or sustaining these projects, the maritime sector plays a crucial role.

Supporting the Australian gas sector

The scale of Australia’s liquified natural gas sector is impressive. According to Statista, Australia exported about 177 million megalitres during the 2023 financial year, with Japan the top market.

This figure is made up of projects such as Ichthys off north-west Western Australia with gas and condensate exported to onshore facilities for processing near Darwin via an 890-kilometre pipeline.

Most Ichthys condensate is directly shipped to global markets from a floating production, storage and offloading facility near the Ichthys Field in the Browse Basin.

Closer to shore, there is Curtis Island in Queensland and the Port Kembla Energy Terminal which is being developed in New South Wales.

About five years ago Australia surpassed Qatar as the largest liquefied natural gas exporter in the world, exporting 77.5 million tonnes with around 70% supplied by offshore gas.

Servicing the offshore sector

One business that is crucial to offshore operations in the north is ASCO, which works in materials and equipment management, delivering integrated solutions and specialist services across logistics, materials, fuels and bulks among other areas.

ASCO manages the Darwin Marine Supply Base (DMSB) on behalf of Darwin Port. The DMSB services all oil and gas-related vessels that support offshore assets in the region, with the exception of vessels that are unsuitable to berth at DMSB, in which case ASCO will arrange a referral to Darwin Port’s East Arm Wharf.

An ASCO spokesperson said their marine management responsibilities for Darwin Port include all co-ordination activities at DMSB, such as booking berths, pilots, drilling fluids, fuelling, engaging and managing stevedores, providing security, ensuring compliance with their safety management plan and associated safe work procedures.

Many new oil and gas projects are expected to be supported by the DMSB including Eni’s Verus project, EOG’s Beehive project, Santos’ Barossa project and the Shell Crux project.

“The energy sector in Australia still offers many opportunities as Australia relies heavily on affordable and reliable energy to power homes and businesses which new gas will support,” the spokesperson said.

ASCO also operates a multi-user supply base in Darwin that is currently supporting various offshore projects for INPEX, the Japanese oil and gas exploration company.

The spokesperson said their multi-user Darwin supply base provides various logistics support activities including warehousing, consolidation of freight, casing management and local transport services.

“ASCO’s Australian business is looking to diversify our service offering to cater for various services associated with decommissioning projects, as well as strategically position ourselves for future renewables projects, including BP’s Australian Renewable Energy Hub off Western Australia (wind, hydrogen and ammonia) and various offshore wind projects,” the spokesperson said.

“The new projects on our horizon provide some continuity and a level of optimism for the energy industry that collectively will help solve the forecast domestic gas supply shortfalls.”

We’ve been working with a range of ports and all levels of government as we plan for Star of the South and seek to advance Australia’s offshore wind industry.

Charles Rattray, Southerly Ten

Trends in the shipping of gas

Australia appears to be in a strong position to continue to meet demand. A September 2021 paper from the Institute for Energy Economics and Financial Analysis stated the offshore gas resources of Australia were about three times larger than its remaining onshore resources and that Australia could produce conventional gas for the next 42 years.

Major companies involved in Australia’s offshore sector are Woodside, Santos and BHP along with the major multi-national businesses ExxonMobil, Chevron, Shell and BP, followed by Japanese behemoths Mitsui, Mitsubishi and INPEX.

Such market growth has influenced the market for the giant LNG carriers that move this valuable commodity. According to Statista, the global LNG tanker fleet encompassed a total of 734 vessels at the end of 2022 (including floating storage units) with figures steadily increasing since 2011.

“With LNG trade volumes reaching 542 billion cubic meters in 2022, greater number of tankers are paramount to satisfying growing consumer demand,” Statista analysts reported.

Given the serious implications of an accident, safety is a priority for LNG carriers. According to Shell, the ships have double hulls with about 1.8 metres of void space or water ballast between them and the cargo tanks. Maritime research firm Clarksons noted earlier this year that the LNG carrier orderbook is entering another growth stage and has reached 53.6 % of the total LNG carrier fleet.

Wind

Australia has 58 offshore wind farm projects earmarked, although none have progressed to the point of generating electricity.

Federal minister for climate change and energy Chris Bowen announced in August 2022 the six priority areas for offshore wind, namely Gippsland, the Hunter, Bass Strait, Southern Ocean, the Illawarra and the Indian Ocean off Bunbury. Mr Bowen said earlier this year that Australia’s offshore wind industry “presents a huge opportunity for the regions that have powered our country for generations”.

“Australia’s first offshore wind zone has hit a new milestone, with reliable renewables and secure jobs a step closer for Gippsland,” Mr Bowen said.

“Granting feasibility licences is the next step to helping deliver a new clean energy industry for Australia, as well as future proof energy security and reliability for Victoria.

“I’ve awarded feasibility licences to projects that would bring the most rewards for Gippsland, its workforce and for our energy security.”

One project that has generated much interest is Southerly Ten’s Star of the South project off Victoria’s Gippsland coast with a view to eventually supplying 20% of Victoria’s electricity needs.

Southerly Ten has talked of the role of ports in offshore wind project construction and operations.

“Ports are critical enablers of an offshore wind industry,” Southerly Ten CEO Charles Rattray said.

“We’ve been working with a range of ports and all levels of government as we plan for Star of the South and seek to advance Australia’s offshore wind industry. We’ll continue to do this as our projects progress through these next planning stages.”

Southerly Ten did a year-long analysis of port options across 2022-23 which identified multiple suitable ports for further consideration in the construction of the project. The Victorian Renewable Energy Terminal at Port of Hastings, Geelong Port and the Port of Bell Bay (Tasmania) were all identified as potential options to support the project’s construction (subject to environmental approvals). Multiple ports are expected to be needed during the construction phase.

“Barry Beach Marine Terminal and Port Anthony were identified as good options to host the project’s long-term Gippsland Operations Base – this is where workers managing day-to-day wind farm construction and operations activities would be based,” Southerly Ten said in a statement.

“Star of the South is working closely with the range of ports identified through its analysis as planning for the project continues.”

There is an urgent need for Australia to address the maritime skills shortage to meet the needs of the nation in the short, medium and long term.

Angela Gillham, Maritime Industry Australia

Typical maritime activities

During construction of an offshore wind project, large specialist vessels are used to transport and install components such as turbines, substations and cables. Vessels are also used for other purposes such as safety/escort, environmental monitoring and crew transfer and/or accommodation.

According to Southerly Ten, during long-term operations, maintenance crews are transported to and from the wind farm aboard crew transfer vessels or service operation vessels, with specialist vessels deployed as needed for major maintenance or repairs.

The maritime workforce is already equipped for work in offshore wind. Qualification-based maritime roles, such as deck officers, marine engineers and ratings are in high demand.

The skills and qualifications required for seafaring positions in offshore wind are consistent with those already in place across the maritime industry. More than 85% of the maritime workforce is ready to work in offshore wind.

The role of the maritime sector

Development of Australia’s offshore sector is important for Australia’s maritime industry, whether the providers of ships and maritime services or the ports that serve as hubs or access points to the key projects.

Maritime Industry Australia (MIAL) chief executive Angela Gillham is a close observer of the offshore sector and said development of offshore wind projects has created “fierce” demand for specialised maritime assets.

“Our capacity to attract the project proponents and contractors capable of delivering these projects relies on regulatory certainty and clarity combined with sufficiently suitable skills available domestically,” she said.

“[This is] together with the capacity to supplement this domestic workforce with key international skills.”

Ms Gillham said the Australian offshore oil and gas sector also faces challenges during construction, due to a shortage of vessel operators.

An increasing number of vessel operators are pursuing opportunities in Brazil and the North Sea “where the business environment is currently seen as more attractive for vessel owners” and “as vessels leave Australia, we need a mindset shift to attract them back”.

Ms Gillham also welcomed the Commonwealth’s approach to designating offshore wind zones and issuing feasibility licences supporting “the long-term project pipeline certainty required to attract the assets to the region”.

Australia is also experiencing a maritime skills shortage, Ms Gillham said, driven by increased maritime activity and a significant reduction in maritime skills training and development over the past decade.

“The skills required in the offshore wind sector will include near coastal and STCW qualifications and, much like offshore oil and gas, employment in the offshore sector ranges depending on the stage of activity.

“The development phase includes a large diversity of assets and qualifications in contrast to the operational and maintenance phase.

“There is an urgent need for Australia to address the maritime skills shortage to meet the needs of the nation in the short, medium and long term.”

Ms Gillham said MIAL is collaborating with a range of industry stakeholders including the maritime unions and the state and federal governments to progress necessary Australian industry reforms “that will build our national maritime capability to support the ongoing growth, development and diversification of Australia’s critical offshore industries”.

There are children going through school now who could have their entire career in the offshore wind sector for many generations to come.

Mike Gallacher, Ports Australia

Ports Australia CEO Mike Gallacher said offshore development would “start and finish at ports”, whether “with gas or with this burgeoning area that is offshore wind”.

“With turbine-generated power, the ports have traditionally really only played a small role,” he said.

“Now everything is changing, and the port is going to be the pivot point for receiving the turbines and equipment as well as facilitating their construction and transportation back to sea, and that’s a much bigger role.”

Mr Gallacher agreed staffing was a challenge, not only for ports but the entire maritime sector.

“I think what we should be looking at is the skills the nation will need, not only for more construction and transportation but also ongoing maintenance,” he said.

“Quite simply there are children going through school now who could have their entire career in the offshore wind sector for many generations to come.”

Mr Gallacher said offshore development required a collaborative approach similar to what occurred in Sydney in the years before the 2000 Olympics.

“The magnitude of what we are talking about is so big that we probably need a similar approach by the federal government with the state governments being very much involved,” he said.

“I don’t think this debate about offshore wind should suit purely with government. The people who have expertise from the private sector, be it in skills development, investment, construction or transportation, they will need to be sitting down [together] to ensure we get this right.”

This article appeared in the July 2024 edition of DCN Magazine