Liquefied Natural Gas Can Contribute AUD $55 Billion to Australia’s GDP in 2020, Accenture Report Shows

Australia’s Liquefied National Gas (LNG) industry could become the world’s largest and most technologically advanced, contributing more than AUD$55 billion to Australia’s GDP in 2020, according to a new report from Accenture (NYSE:ACN).

The new report titled “Ready or Not? Creating a world-leading oil and gas industry in Australia”, analyses the readiness of the LNG industry to capitalise on future opportunities as it moves from construction into production. The report, based on interviews with LNG operators and the companies that service them, comes ahead of the Australian Petroleum Production & Exploration Association (APPEA) Conference and Exhibition 2015.

According to the report, in order for Australia to secure its place as the world’s leading LNG producer and derive the associated benefits including ongoing growth of the nation’s prosperity, there is a need to improve international competitiveness, remove regulatory constraints and introduce a more flexible labour relations regime.

Accenture found that over the next five years natural gas production will increase by more than 90 per cent, the number of wells in production will increase by 400 per cent and pipeline infrastructure in Australia will increase by 45 per cent. Total cumulative capital investment and operating expenses will reach around AUD$360 billion by 2020, 40 per cent more than the AUD$250 billion invested during the recent capital investment boom.

Against this growth backdrop, greater industry and regulatory collaboration, accelerated workforce re-training and further investment in digital and automation will be required. However, Accenture and APPEA believe that a successful transition from construction to production could be a win-win for LNG operators, the Australian service sector, the government and the overall economy.

“If operators, the service sector and government can work together to get the transition right, we estimate the industry could collectively realise an additional AUD$50 - $70 billion of shareholder value over the next 25 years – and this will have a positive impact on the whole economy,” said Bernadette Cullinane, Asia Pacific managing director for Accenture’s energy industry group. “The speed, scale and scope of the transition is unprecedented. The industry must be ready to support and maintain safe, efficient and reliable operations for the next 40 years.”

The report states that according to Australia’s top tier LNG operators and service providers, the industry is well prepared in several areas for this transition – building workforce capacity and capability, and tuning and adapting business models for production. The companies surveyed rated workforce capability and capacity as the highest scoring of the five readiness dimensions measured at 0.68 out of a possible 1.0, and 0.58 respectively.

“Australia has a real opportunity to use the next few years to become a world leading LNG producer, delivering long term returns for all industry sectors. The construction phase has now peaked, and the industry is transitioning into an exciting new production and operation phase – an estimated 13 new LNG trains within seven new plants will come online between 2015 and 2018,” said Paul Fennelly, APPEA acting chief executive. “It is imperative that everything – operations, equipment, workforce, the regulatory framework and industrial relations regime – is ready.”

The report also highlights the areas that need to be improved with competitiveness rated at 0.37, regulatory framework rated at 0.40 and the industrial relations framework which scored the lowest score at 0.32.

“The research overwhelmingly highlighted that there is room for more collaboration on key services such as turnarounds and logistics, with many stating the industry hadn’t done enough sharing during the construction phase. Accelerating industry collaboration and embracing innovation and digital technologies will help drive global competitiveness, attract the next wave of capital investment and transform Australia into the world’s largest and leading LNG industry,” added Ms Cullinane.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 323,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.

About APPEA

The Australian Petroleum Production & Exploration Association is the peak national body representing Australia’s upstream oil and gas industry. Its members account for around 98 per cent of the nation’s petroleum production. APPEA works with governments to help promote the development of the nation’s oil and gas resources to the benefit of all Australians.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150517005030/en/