WA mines and petroleum minister Bill Marmion.

WA mines and petroleum minister Bill Marmion.

Chamber of Minerals & Energy WA managing director Reg Howard-Smith.

Chamber of Minerals & Energy WA managing director Reg Howard-Smith.

By Sarah Byrne

WESTERN Australia is likely to become a “global hub for LNG” and oil prices will rebound, according to the minister for mines and petroleum, Bill Marmion.

Speaking with Oil and Gas Australia, Mr Marmion predicted global companies would set up base in Perth due to Western Australia’s onshore and offshore potential and the state’s close proximity to markets such as, China, Japan, Korea and the emerging Indian market.

“Everyone is forecasting that Australia will take over as the lead exporter of LNG in a few years and most of that will be coming from Western Australia,” Mr Marmion said.

Chamber of Minerals and Energy WA managing director Reg Howard-Smith said construction costs and a lack of infrastructure were major challenges faced by industry, saying he hoped infrastructure would be built and costs reduced in 2015.

“There is a need for a clear, co-ordinated plan on infrastructure. We also need to look at port capacity and consider privatisation,” he said.

Mr Howard-Smith agreed the fall in the price of oil was temporary, but raised concerns it could impact future investment in the state.

But for Mr Marmion, two major oil and gas finds this year provided confidence in the onshore and offshore potential of Western Australia.

“Phoenix South oil was discovered about 180km north of Port Hedland and near Perth the Senecio 3 find is near Dongara, one is oil and the other gas, two good finds which gives us confidence in our acreage that there are still good things to be discovered,” Mr Marmion said.

Australia Worldwide Exploration’s Senecio 3 located in the Perth basin is more likely to raise concerns from the community as it is closer to major population centres compared to the Canning basin.

Mr Marmion said lessons can be learned from the community’s reaction to fracking in New South Wales as community perception is a major challenge for the industry.

“My department is running workshops and telling industry chief executives when they go and visit sites they need to meet the adjoining land holders and have a cup of tea with them and explain the drilling activity,” he said.

“Engagement by the company directly with the community is important so they don’t get the wrong idea,” Mr Marmion said.

Mr Howard-Smith said community engagement was important but he didn’t expect opposition to exploration activity to be as confrontational as it had been in NSW where developments are closer to population centres.

As the industry moves away from the construction phase and into the production phase, fewer workers would be needed, Mr Howard-Smith said.

“This shouldn’t be a surprise for anybody. People might suggest this is a downturn, I don’t think it is, it’s a change in the nature of operations,”

“There is a need for the government to help with workers coming out of the construction sector, particularly as Gorgon gets closer to completion,” he said.

Acknowledging the challenge for construction workers as the industry moves into production Mr Marmion said workers will need to follow the industry where work was needed or look for other construction jobs, mentioning activity in housing as promising.

Reducing red tape to support the development of Western Australia is a main focus for Mr Marmion particularly going forward as minister for finance, a portfolio he recently acquired.

After an expensive period of construction in the industry, reducing costs as the industry moves into the production phase was the key to ensuring the continued development of the industry.

“We have a government and opposition that welcomes foreign investment and we need foreign investment. We have a lot of expertise here within the industry. If we can get on top of the cost aspects then we will see new investment coming into Western Australia,” Mr Howard-Smith said.