The Australian Oil & Gas Review
GATEWAY TO GROWTH
ADVANCING ONSLOW
BORDERED by a blanket of red earth and turquoise blue waters, Onslow is a hidden treasure on the WA coastline loved by locals for its beauty and small-town charm.
Those fortunate to have taken the two hour flight up from Perth (or game enough to attempt the 1386km drive), will have witnessed this and more.
Yet aside from its pristine beaches, arid landscapes, and prime fishing spots, Onslow is best known for its locality to some of the nation’s most important oil and gas, and mining ventures.
These projects are all a short drive from the town centre; Chevron’s Wheatstone onshore plant which delivered first gas in October, the established Onslow Salt project, and the new $125 million first stage Onslow Marine Support Base (OMSB) in Beadon Creek which is set to generate close to 200 permanent jobs.
With these three key projects up and running sentiment in Onslow was broadly positive; but it hasn’t always been a smooth ride for the town.
There have been many ups and downs, namely during the Wheatstone construction when a huge influx of fly in, fly out workers forced many residents to up and leave.
“We lost a third of our community virtually when Wheatstone was announced,” Shire of Ashburton president Kerry White said.
“Prices of houses went through the roof; for example a 40 year old house sold for $1 million, and a lot of older residents that lived here sold their houses and left.”
“Rents went from $150 to $200 a week right up to $2000 a week and higher for old houses.
“Our whole world was turned upside down; our economy and how we used to live.”
It took a while to adjust, and just when things were starting to stabilise, the Wheatstone project was complete and the thousands of workers that were passing through were gone.
“Investors came in and new companies came in to try and set up business,” Ms White said.
“But now since construction [of Wheatstone] has winded down a lot of those have left so we’re no better off population wise from what we were before.”
Onslow’s population sat at about 860, according to 2016 Census data; a stark contrast from the State Government’s estimate in 2012 that the town’s population would grow beyond 2000 by 2016.
However, all of that is set to change in coming years, with some promising developments set to lure sustainable investment and more permanent residents to the region.
Attracting investment
The newly opened OMSB facility, operated by Agility Logistics, is a multi-user infrastructure port and marine supply base offered as an alternative to Dampier and Exmouth, with companies such as Chevron and BHP able to access services closer to their operations.
Stage 1 involved the construction of a berth pocket to form a 26,000sqm land-based wharf facility comprising a new 250m berth face, LCT ramp, and five refuelling stations.
Stage 2 will however be the biggest driver of investment.
In September, the base made national headlines as the first project in the country to receive a $16.8 million loan from the newly established Northern Australia Infrastructure Facility (NAIF).
“This is a significant announcement, considering NAIF was only established on 1 July 2016 and the timeframe to reach financial close on infrastructure projects can take between two and three years or even longer,” NAIF chief executive Laurie Walker said.
“The Onslow project is estimated to contribute $100 million to the economy over a 10 year period.”
On 3 November, the WA Government signed a Master Facility Agreement with the Federal Government to allow eligible infrastructure projects in the State to receive NAIF funding.
“Our whole world was turned upside down; our economy and how we used to live.”
Preliminary works on a second stage were now underway, which included widening and deepening the current channel to increase accessibility.
Ms White said once the OMSB Stage 2 was complete this will have a significant roll-on effect in bringing in new businesses.
“You have just got to look out at the ocean at all the tugs and different boats offshore not being able to get into the creek,” she said.
“Once they can, they will get supplies and make the creek busy.
“Then, more trucking companies will come in, which will be able to bring us cheaper freight.”
A new 42m x 30m helicopter hangar at the Onslow airport (4km from the town) was also a drawcard, and part of the town’s ‘if we build it they will come’ approach.
“It is another important step in developing Onslow’s commercial capabilities,” Ms White said.
“We’ve had some calls, and people have come to look at it, but we haven’t signed any contracts yet.
“We’ve given prices to helicopter companies regarding the hangar so that they may bring their business to the region, and they are all doing their homework now.”
The next big ticket item was a $13 million Regional Waste Management Facility (the second facility in WA capable of accepting industrial hazardous waste), set to open in early 2020.
Through these key developments, the aim was for more oil and gas companies to choose Onslow as their onshore servicing base.
Newly formed Western Gas, which recently acquired the Equus project 200km off the coast of Onslow, is a prime example of the type of business Onslow is looking to attract.
The development-ready oil and gas project was acquired from US Energy Company Hess in November, and has a resource of more than 2 trillion cubic feet (Tcf); enough gas to supply one quarter of WA’S domestic gas demand for more than 20 years.
While it was still early days and the company was yet to reveal project logistics, Western Gas executive director Andrew Leibovitch told The Australian Energy Review, the project was in close proximity to “world-class onshore and offshore infrastructure”.
“Our current priority is to prepare a development case for the Equus Gas Project, building on the extensive exploration, appraisal and engineering activities completed to date,” Mr Leibovitch said.
“Right now, we see a lot of upside in domestic gas, given potential gas shortfalls in Western Australia from the early to mid-2020s. We’ll be looking to help fill that gap.”
The $350 million Ashburton Salt project, 40km southwest of Onslow, was another potential project in the works, after mining licenses were purchased by German salt company K+S in 2016.
In September, a draft environmental scoping document was released, which begins a three-year approval process. Onslow was also soon to welcome a new $36 million Distributed Energy Resource (DER) project to deliver 50 per cent of the town’s power through renewables.
The project will comprise a new 5.25 megawatt (MW) modular power station for Onslow, a mix of distributed and utility-scale solar, and battery storage.
Horizon Power has commenced constructed on the modular station, with final commissioning scheduled for early 2018, while construction on the solar farm and lithium battery storage will begin mid-2018.
Horizon Power said it also plans to work with customers to develop distributed energy resources in town, likely in the form of solar and batteries.
“This project will establish the power infrastructure to support the growing energy needs of the town as well as set the foundations for Horizon Power‘s vision for a highly distributed renewable energy future in Onslow,” Horizon Power project director Maurice Ryan said.
“This project will ensure a more reliable, safer, cheaper and cleaner supply for our customers in Onslow, signalling the start of a new era of energy for the town.”
However, Ms White said the community was still “in the dark” about the project, and were unsure of the associated costs for towns people to incorporate the solar technology into their homes.
“It a great idea but the big but is who can afford it, and how it’s going to work,” Ms White said.
“For the town’s people we haven’t been given any answers regarding how much it’s going to cost each person to put solar panels on, and are they going to subsidise it.”
A bright future
It is clear the remote town has much to look forward to in the way of investment.
Ms White said Onslow residents were also a lot happier now that they got to enjoy all of the facilities that were promised when the Wheatstone and BHP’S Macedon projects began.
Chevron alone committed more than $250 million to social and critical infrastructure projects in Onslow, which included upgrading community facilities, education and health services, roads, and power and water infrastructure.
BHP had also injected a further $5 million; $4 million went towards basketball courts, and $1 million for a skate park.
Ms White said the next hurdle was for the airport to offer more flights for the community, rather than just service the fly-in, fly-out workforce.
“The obstacle is getting permanent flights for people that live here; that is our main constraint at the moment,” Ms White said.
“Cheap fights into Onslow is very important.
“We hope to be a proper regular passenger service transport by March 2018.”
Ms White said the Onslow community was also crying out for some retail and banking facilities, and as the town grew it would need a high school.
“We’ve had a very good lifestyle here; we’ve got the beach club, we’ve got the hotel that has just been done up, we’ve got plenty of sporting facilities now, we just need more people,” she said.
“I’m hoping that we will grow; we have got a lot of vacant industrial and residential land ready to go.”
Ms White said all going well, the town was expected to double in size to 1500 permanent residents over the next five years.
“It’s a great place to live, and it’s a great place to raise families,” she said.
“Everybody that comes here and stays for a while all fall in love with Onslow and make friends for life.”
“I’m hoping that we will grow; we have got a lot of vacant industrial and residential land ready to go.” Powering up through renewables