Thursday 20th Sep, 2018

LOGISTICS & SUPPLY CHAIN SPECIAL REPORT: Opening up the wild west

Image: Shutterstock
Image: Shutterstock

AMBITIOUS projects in the north-west are bringing about supply-chain changes in parts of the country sometimes overlooked by those on the eastern seaboard.

Sweeping change is underway at Broome with the business case being developed for a circa $100m investment in new marine infrastructure.

Meanwhile, a project bankrolled by the Northern Australia Infrastructure Facility (NAIF) near Onslow is set to result in the construction of a multi-user infrastructure port and marine supply facility, providing fuel, waste management and logistics support to companies operating in the Carnarvon Basin.

Broome
Kimberley Marine Support Base (KMSB) is the Western Australian private developer which is making plans to build a new floating wharf and on-shore infrastructure within the port of Broome.

A floating wharf is seen as a potential solution for cruise ships wanting to access Broome during the extreme local tides which sometimes impede smaller ships from transferring passengers. New heavy lifting equipment would also expand the current capacity of the Port to handle the full range of oil and gas equipment.

“It offers increased capacity for Broome at a time when it’s needed and has been identified in our masterplan,” Kimberley Port Authority chief executive Kevin Schellack said. “We see it working hand in hand.”

Port of Broome. Photo: Kimberley Ports Authority

Port of Broome. Photo: Kimberley Ports Authority

The Port’s 50-year masterplan showed the current facility would need the support of additional infrastructure within five to 10 years, partly due to the increase in cruise shipping.

Mr Schellack told Daily Cargo News they were a government trading enterprise without the capacity to raise all the money on their own.

“We’re thrilled that a private company has come in, in line with our master-planning, and suggests that it is going to build a $100m facility that will fulfil certain shortfalls we have identified,” he said.

The lead investor with KMSB has port-development project experience in the Kimberley and Pilbara. The company predicts the Broome project could create 250 construction jobs and up to 450 operational jobs, as well as the existing jobs and services at the port.

KMSB has until early in 2019 to build the business case for review by KPA and the government of Western Australia. If viable, KPA would then enter into a lease with the company and approvals would be sought to develop the land and seabed.

KMSB’s Andrew Natta said Broome was “a fantastic resource offshore and onshore but the area needs to capitalise on it”.

“In developing the business case we’ll be looking at the needs of the Kimberley Port Authority, the region and the market’s,” Mr Natta said.

“Our intention is to have it all done within a year and go into construction by 2019, with completion of the project in 2021,” he said.

This timing would be in line with a major project in the region that is due to commence operations in 2021.

KPA is also aware of the billions of dollars of investment happening off the Kimberley coast by oil and gas operators.

“We are encouraged by this opportunity to capture more of the on-shore benefits from this activity while also providing greater opportunities for cruise ship access into Broome,” Mr Schellack said.

In terms of the infrastructure, KMSB is investigating the viability of constructing a floating wharf at the southern side of the current port facility.

“There should be little if any dredging required,” Mr Schellack said. “They are looking at having a floating wharf with a 700-tonne lifting capacity as a multi-user facility.”

KPA is to working with the Department of Transport and the Department of Jobs, Tourism, Science and Innovation to develop the strategic benefits of the proposal with KMSB.

The proponent is to take responsibility for the full range of engineering, environmental and heritage approvals.

“We have been talking with the proponent to make sure there is good engagement with the local community and the full range of benefits are identified for Broome,” Mr Schellack said.

Mr Natta said the developer planned to be consultative.

“We won’t take one step without working with the port authority and the government, we will involve all relevant stakeholders,” he said. “We have to capitalise on what Broome has to offer – it’s a great location.”

Onslow
A project billed as the first to be bankrolled by the NAIF is another project set to get underway on Western Australia’s northern coast.

Owned by a private company, the Onslow Marine Support Base (OMSB) is to receive a NAIF loan of up to $16.8m for a multi-user infrastructure port and marine supply project.

Onslow Marine Support Base. Photo: NAIF

Onslow Marine Support Base. Photo: NAIF

The OMSB is to provide supply and support services for onshore and offshore businesses, such as logistics, fuel supply, waste management and construction and maintenance for companies operating in the Carnarvon Basin.

NAIF chief executive Laurie Walker told DCN its loan would fund the second stage of the project with the deepening of the harbour channel by 5.5 metres (chart datum), thus allowing access for larger vessels.

“It means that the whole project is much more useable by more cargo vessels,” she said.

NAIF is partnering with National Australia Bank to finance the project, which helps meet its aim of encouraging private-sector investors to help build infrastructure for the benefit of northern Australia.

“Obviously we’ve done an assessment that the growth will come and there’s an operator that’s been engaged… a credible operator that understands the industry and has committed to the project,” Ms Walker said.

Ms Walker said one way NAIF was different from other financiers was it had to demonstrate a net public benefit from each of its investment decisions.

“The benefit of this project is predicted to be in the region of $100m,” she said, adding that it was over the life of the ten-year loan,” she said.

“This is based on the jobs that the project will create, reduced costs to businesses, and the time that logistics companies would have had on the road to get to and from Perth.

“It will also mean the maintenance of vessels can be done in the region rather than going to Singapore.”

NAIF and OMSB say the loan has brought forward the development of the project by three to five years.

“We have a mandatory criterion that there must be an indigenous engagement plan, and there are comprehensive guidelines around participation and employment,” Ms Walker said.

“And, in this case, it will be targeted and appropriate for the region. There are strategies that the proponent committed to… and after speaking to indigenous leaders in the region, we are comfortable there is a good strategy in place.”

When the NAIF board decided to invest in the OMSB, its investment mandate stated NAIF had to have a preference for the loan size to be a minimum of $50m and only 50% of the debt.

Ms Walker said there likely would be at least three to five investment decisions made before the end of the 2017-18 financial year.

“We have now got a pipeline that’s building up and I expect that momentum to keep flowing,” she said.

This article appeared in the July edition of DCN Magazine





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