Liquefied natural gas industry faces skills crunch

Total has added its weight to the skills shortage debate, warning Julia Gillard of a looming crunch in the booming LNG industry.

Speaking at the World Gas Forum in Kuala Lumpur at the end of last week, Total chairman and chief executive Christophe de Margerie said he had raised the issue when he met the Prime Minister two weeks ago.

"It is true that in Australia, especially with a long-term view, it may become short of skills if you want to develop all of those LNG projects in the northwest (of Western Australia), Darwin and Brisbane," he said. "It's up to the government to see what they have to do. What we raised with the government is, 'Be careful'."

Total has a 24% stake in the $34 billion Ichthys development and a 27.5% interest in the under-construction $16Bn Gladstone LNG project in Queensland. Together, the projects will employ several thousand people while they are built.

With more than a dozen LNG projects representing about $200Bn in investment either under construction or planned for development here, competition for skills has already intensified and developers have looked overseas for labour.

Woodside Petroleum's Pluto LNG project relied on 457 visas to import skilled workers for specialised short-term jobs in the project's construction. A number of other LNG projects planned or being built are expected to use Enterprise Migration Agreements that allow the import of labour from overseas.

Companies such as Woodside and Royal Dutch Shell have also considered building plant components overseas to avoid higher labour costs in Australia.

Mr Margerie said labour issues were less significant in Darwin, where the Ichthys LNG plant would be built, as it was the only plant under construction there.

The issue was more apparent in Queensland given the number of competing projects, he said, with Total having sent expatriates from France and other nations to work on the development.

Mr Margerie confirmed Total would exercise its option to lift its interest in Ichthys from 24% to 30% in a matter of "days or weeks".

Separately, the head of integrated French energy company GDF Suez said Europe could meet its ambitious emissions targets at a significantly cheaper cost if it focused more on gas instead of renewable energy.

GDF Suez chairman and chief executive Jean-Marie Dauger said a greater focus on gas could shave E400Bn to E500Bn ($500Bn-$630Bn) off the estimated E1.2 trillion in costs by 2030 under Europe's emissions reduction plans. Using more gas to cut emissions could also protect 20-25 million jobs in Europe.

"Today this issue of economic optimisation of the energy mix simply cannot be ignored at a time of extreme financial and economic instability," Mr Dauger said.

"It is essential that the affordability of energy policies is seriously considered."