A diversifying economy

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 21 Jul 2016   Posted by admin

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Image: Chevron Australia

By Elizabeth Fabri

THERE are no signs of slowing down for the formerly  quiet coastal Pilbara town of Onslow, even as its hallmark liquefied natural gas (LNG) hub transitions from construction to production.

In 2006, before plans for the $29 billion Chevron-operated Wheatstone Project were confirmed, the North West town of Onslow was a mere speck on the map with a population shy of 600. Today, the town has become a thriving hub of activity attracting 7500 fly in, fly out workers, and between 800 and 1000 permanent residents. While construction on Wheatstone neared completion, booming businesses, town developments, expansions, and future project proposals continue to build momentum.

“The economy is still very strong due to Chevron spending $250 million on the social infrastructure projects, plus the state government spending $70 million and BHP $5 million on social infrastructure,” Onslow Chamber of Commerce president Geoff Herbert said. “The town has had numerous new businesses and facilities built to accommodate the construction of Wheatstone. “We have a diverse economy in Onslow now- Onslow Salt, Wheatstone, tourism and the marine supply base all add to the town, and by having a diverse economy it helps the local economy when one industry suffers.”

Major projects

The Wheatstone Project has undoubtedly been the primary catalyst for Onslow’s growth in the last five years. As the second largest resources project in Australia, and the country’s first LNG venture developed as a hub, the onshore facility sits 12km west of Onslow at Ashburton North Strategic Industrial Area. Once completed, it will be equipped with a 200 terajoules per day domestic gas plant, and two LNG train with a combined capacity of 8.9 million tonnes per annum.

The project has generated more than 6000 direct and indirect jobs in the region, with a peak construction workforce of 7000, and an expected operational workforce of 370. In its 2015 annual report, Chevron stated that construction was on track with a number of major milestones — such as the installation of the offshore platform and topsides, all subsea pipelines and structures, and the delivery of all LNG Train 1 and common modules – all reached. Six of the nine wells were now drilled to offer sufficient resources for the first train, expected mid-2017.

The Onslow Chamber of Commerce & Industry’s Business Investment Guide, published in January, said the site had capacity to increase to five trains in time, and produce up to 25 million tonnes per year of LNG. The chamber noted once Wheatstone entered its operations phase, new business opportunities would open in the area, including warehousing, logistics, freight consolidation services, mooring operations and equipment, vessel operations and maintenance, and field services such as plumbing.

In addition, Chevron-operated Gorgon, based at Barrow Island 100km northeast of Onslow, also showed promise for the town, with potential for Onslow to be a secondary supply and servicing base in the future.

BHP Billiton’s $1.5 billion Macedon project, located 17km south west of Onslow, has also made positive contributions to Onslow’s economy. BHP Billiton awarded $5.8 million in contracts to local businesses during construction, and more than $600,000 had been spent with local businesses since operations began in 2013. The development has capacity to supply 20 per cent of Western Australian’s domestic gas market via the Dampier to Bunbury Natural Gas Pipeline (DBNGP).

While relatively established in the town, Onslow Salt, a solar marine salt field at Sunset Beach with a workforce of 100 local residents and nine maintenance staff recently completed an expansion with three additional crystallisers.

“Onslow also has a marine support base just starting construction in Beadon creek,” Mr Herbert said. The base, proposed by the Onslow Marine Support Base (OMSB), is anticipated to be complete in December, and would potentially create between 100 and 150 jobs that could equate to between 250 and 375 new residents.

Future proposals

The Yannarie Salt project proposed for the eastern side of the Exmouth Gulf has been a hot topic in Onslow for years, but the plan was shelved in 2010 after attracting widespread opposition and failed approval from the Environmental Protection Authority.

An announcement by German salt company K+S in May has reopened the debate for future salt operations. The company unveiled its plans for a $350 million Ashburton Salt project 40km southwest of Onslow, after purchasing mining licenses from local investors. It said the project was in early stages of development, with the company currently preparing environmental permits and a feasibility study.

 “Ashburton Salt is a completely new project and significantly different from previous proposals for the region,” K+S Group board member and head of Salt business unit Mark Roberts said. “Minimising environmental impacts on the surrounding area is a priority and Ashburton Salt will be developed using the most advanced technical and management practices.” Annual production was estimated at about 3.5 million tonnes of solar salt, with possible production to start in 2022, pending approvals.

A $25million upgrade to the Beadon Creek Boat Harbour was also a possibility, with a 19-pen marina, and two spaces for loading and offloading. The Beadon Creek Harbour Land Use Framework (LUF) has proposed five precincts for development, which would include an area not available to the public to service the resource industry. In its former life, the harbour was a flourishing commercial prawn fishing spot, so redevelopment could lead to a re-emergence of Onslow’s fishing industry.

There had also been discussion of plans to decommission the onshore and offshore oil and gas infrastructure at Thevenard Island, 22km northwest of Onslow. The island facilities ceased operation in 2014, and were now under a care and maintenance regime. Decommissioning dates were not finalised, but OCCI said there was speculation the project would begin in the next five years. It said on completion of the decommissioning, there would be a requirement for rehabilitation of the island, which would present further business and employment opportunities.

The Scarborough Gas Field, 280km northwest of Onslow, also had potential, and if confirmed would be on a similar scale to the Wheatstone Project, with a construction workforce in excess of 6000. The site was estimated to contain 8 to 10 trillion cubic feet of lean gas with no measurable quantity of condensate.

Community development

With ongoing construction and developments in the pipeline, the Onslow community’s future looks bright. The OCCI has continued to grow as it promotes the development of local businesses, social infrastructure and community support in the town. Despite a huge influx of people in recent years, “this has been [run] quite well with Chevron controlling the flow of workers into town so that the town was not over run,” Mr Herbert said.

New infrastructure and facilities included a new airport terminal and runway opened in August 2015, a new hospital, school and road upgrade, power station, government workers housing, basketball court, skate park, and more. A long-awaited 25-metre, six lane public swimming pool was also under construction, and due to be completed January 2017. “The Aquatic Centre will add to local amenity and provide an additional avenue for social and recreational activities,” Wheatstone Project deputy director Duke Snyder said.

A two-year partnership called ‘Working Together for Onslow’ between the Wheatstone Project and Shire of Ashburton also aimed at building an engaged, spirited and connected community. Key programs included Welcome to Onslow events for newcomers, arts and culture events, ANZAC Day celebrations, Onslow Keepers activities for the over 55s, and school holiday programs.

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