Still pretty sunny in Western Australia

There has been much talk of the resources investment boom passing its peak. But in Perth things still feel pretty good. I called on Premier Colin Barnett, re-elected in a handsome victory since my last visit, and some of his ministers. I attended the Australian Gas Technology Conference and Expo and met a number of business people.

The WA winter warmth and sunshine, a contrast from the bitter cold of Canberra, reflected the mood of my interlocutors.Although the peak of the current investment boom “capex” appears to have passed, and there have been a number of significant energy and mining projects cancelled around Australia, there will still be strong flows for several years on the $268bn of existing committed projects. And ongoing operational expenditures “opex” will provide a significant amount of activity for many years.

I visited one British company, in the quality assurance business, which in the space of three years will have grown from start-up to 100 people in Perth. They saw a steady stream of business flowing over the next 40 years. Most of the businesspeople I talked to suggested that we would be seeing a return to a more normal growth pattern, rather than the extraordinary levels of activity (and prices) over the last few years.

There has been an active public debate about the intention of the operators of the offshore Browse field to develop the gas via FLNG (floating LNG) rather than bringing it onshore. The WA Government remains keen to find ways of developing the onshore site they have acquired at James Price Point near Broome.

I also had the opportunity to visit BAe Systems’ impressive Henderson shipyard, just south of Fremantle. The yard is busy working on the Anti Ship Missile Defence (ASDM) upgrade to the Royal Australian Navy’s ANZAC class frigates.

It was a magnificent sight to see two of these huge vessels out of water being worked on by the BAe Systems team. The company are keen to take advantage of their excellent facilities and skilled workforce in WA to diversify beyond their traditional defence base, and become a supplier to the energy industry. The newly arrived GM, Ian McMillan, from Barrow in Furness, was very optimistic about the yard’s prospects.