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Report highlights people risks within LNG industry

LNG Industry,

Air Energi and Queensland University of Technology (QUT) have unveiled the findings of their research into people-related risks within the LNG industry.

Air Energi, the global workforce solutions provider for the oil and gas industry, has worked together with QUT on research providing detailed analysis of the potential workforce risks related to Australasia’s LNG sector, particularly involving a contingent workforce.

LNG industry experts

The report, titled ‘Workforce Related Project Risks’, is based on interviews with a panel of industry experts across a wide range of job areas including operations, HR, project management, advisory functions, and contractors. QUT researchers, Dr Karen Becker and Ms Michelle Smidt, conducted the research.

With the number of LNG projects set to increase, there are concerns that workforce costs and continued personnel shortages could contribute to further project delays or cancellations. This will be critical to the future development of projects in Australasia, as well as for companies looking to benefit from the booming LNG markets of North America and East Africa.

Potential risks

Commenting on the findings, Karen Becker said: “Engineering-based organisations have historically focused on technical risk and safety, whereas the people element has proved much harder to manage and quantify.

“The industry professionals we spoke to were cognisant of the fact that the people aspect of a project presents many potential risks, but also acknowledged how difficult it is to say which risks will be pertinent for a specific project. The findings of our report enable us to identify the highest risks that must be considered for any given project, providing real-world answers to a real-world problem.”

Time and cost delays

The report considers the impact of people-related issues on project schedules and costs in capital-intensive environments, and warns that time and cost delays are prevalent throughout the supply chain.

Talent in the oil and gas industry

It also reinforces that the retention of talent has become a major issue for the oil and gas industry due to high demand and an ageing workforce. With the considerable risk of being unable to deliver a project on time and within budget, risks are categorised into six main areas:

  • Project appeal
  • Recruitment
  • Onboarding and induction
  • Retention
  • Demobilisation
  • Compliance

Australia’s LNG sector

Matt Smith, Director – Global LNG Development at Air Energi, added: “Despite increasing demand, the future growth of the industry remains uncertain. The cost overruns and schedule delays being experienced in Australia’s LNG sector currently are just as applicable to any industry and region where projects have capital-intensive and highly-technical requirements. This is why it is so important that businesses take these lessons learned, and think differently about identifying and managing their people-related risks, particularly in large and complex projects.

“Our report findings have enabled the development of a comprehensive tool for identifying and analysing the potential workforce-related risks for projects, and we will be making this tool available in Q2 of this year,” Smith concluded.

The report can be accessed here.

Adapted from press release by Katie Woodward

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