GATEWAY TO GROWTH

ADVANCING ONSLOW

The Australian Energy Review - - FRONT PAGE - EL­IZ­A­BETH FABRI

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

Im­age: Chevron.

First LNG was ex­ported from the Wheat­stone project in Oc­to­ber.

Stage 1 of the Onslow Marine Sup­port Base has of­fi­cially opened.

The Onslow com­mu­nity hopes more flights will be made avail­able to Onslow from Perth.

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