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Tuesday, 23 December 2014

The impact of oil prices on LNG exports – or why I hope the fuel price goes up soon.

Most motorists have enjoyed a welcome respite from soaring fuel prices for the beginning of festive period. However, the situation that has motorists smiling has LNG proponents nervous and recasting their forecasts.

So why the oil is prices so low?

In the last few weeks OPEC’s (Organization of Petroleum Exporting Countries) 13 members, (Algeria, Angola, Venezuela, Indonesia, Iran, Iraq, Qatar, Kuwait, Libya, Nigeria, the UAE, Saudi Arabia and Ecuador) have had discussions about the curbing oil output. However, those discussions failed to produce a plan to ‘cut oil production’ in a move viewed by many analyst's as an attempt to squeeze the booming U.S. shale oil sector — which has higher production costs than OPEC nations. Analysts are also saying production would need to be reduced by at least 1 million barrels per day (bdp) to steam this current oil over supply.

So, the reason for the happy motorists is not good will at Christmas time by oil producers, but moreover a ‘glut of crude oil’ on the market, putting downward pressure in global oil prices. This is good right? Well not really, because historically LNG prices were intrinsically linked to oil prices because LNG usually displaced oil as a fuel source.

Resources analyst Peter Strachan is quoted as saying “about a 16% of the price of a barrel of oil gives you the price of a gigajoule of gas”. “So, if the price of oil is $100 a barrel, then gas is about $15.50 to $16 a gigajoule. Now that we're seeing oil prices down towards $50 to $54 a barrel, LNG prices are around $8.00 to $8.64 a gigajoule on contract, and spot prices might even be lower.

See the Problem?

At $8 to $9 a gigajoule, two major activities will probably eventuate:
  • There is not enough ‘margin’ to service the proponents debts from ‘CapX’ infrastructure expenditure and proponents will need to borrow more from the banks, extend loan repayment terms or seek additional reinvestment;

  • For that price, resource companies will probably leave more CSG in the ground or stockpile it.
For good reason the world’s larger consumer of LNG, Japan is seeking LNG be unlinked from Oil and indexed to “Henry Hub”. ‘The Henry Hub Natural Gas (NG) futures allow market contributors to significantly hedge activity to manage risk with the highly volatile natural gas prices. (1) However, until this indexing change occurs we are all in the same ‘oil boat’ together.

On top of this, the Aussie dollars has fallen to approximately 81.1 US cents, the lowest it has been against the US dollar since mid-2010. Kochie would say, “the less our dollar is worth against the US, the cheaper our exports are to foreigners and more expensive imports are to locals” (2). The cheaper our exports, the less money we get for those goods we send overseas – meaning LNG.

The Sydney Moring Herald recently warned, “that lower global oil prices could be harmful to future income from Australia's liquefied natural gas (LNG) projects”, which have previously been cited by Westpac as a source of support for the Australian dollar as the ‘iron ore prices continue to slump’. So if our LNG exports are worth less now and the LNG income was part of the solution for a stronger Australian dollar – well let’s just say CSG/LNG proponents, Banks and Canberra will be getting a little nervous.

What has been the reaction of industry?

SANTOS recently reduced planned spending by $700 million and is considering following QGC lead and selling off fixed asset sales and slashing its interest in the controversial NSW Narrabri coal-seam gas project. Oil volatility has impacted SANTOS shares with a 52% hit and as a result the company secured a three-year, $1 billion bilateral bank loan facility from ANZ to provide a buffer for the current uncertain oil price environment. The SANTOS interest in the PNG and GLNG projects are on track and are expected to produce positive cash flow in 2015/16 and this is expected to bolster share prices.

The QCLNG LNG exports are on target for the first LNG loading at Christmas 2014. In fact a 283m LNG tanker the ‘Methane Rita Andrea’ is currently moored off Gladstone harbour awaiting regulatory procedures and clearance from the Gladstone Port Corporation. The Methane Rita Andrea’ is reported to be delivering its first LNG cargo to Singapore. To see pictures and track the tanker Methane Rita Andrea goto: The Methane Rita Andrea

QGC will also be reducing casual-contract staffing levels in the New Year as part of its shift from construction phase to steady state operations. BG Group is also confident in 2015. In a shrewd move BG Group has agreed to sell its Australian pipeline asset to APA Group for estimated US$5 billion. The Group expects the sale proceeds will be used to reduce net debt and to fund future growth investment.

APLNG partners (Origin 37.5%) ConocoPhillips (37.5%) and Sinopec (25%) have increased its loan facility to $7.4 billion and lengthening the repayment terms to place a buffer between itself and failing crude oil prices. The APLNG project is on track for a mid-2015 production and export of liquefied natural gas. In the current climate expenses are being reined in with slowing or stockpiling of gas supplies to insulate APLNG from the current oil prices ready for anticipated price rise in coming years.

The oil price reduction is not all bad. Companies with airline and transport interests will get a welcome boost to their bottom line from lower fuel costs.

As a side note:

Russia is not currently part of OPEC. OPEC members have around 67% proven oil reserves and are responsible for 42% of the global oil output. Russia is a large producer responsible for about 12% of (world) global production or about the same size as OPEC member Saudi Arabia. OPEC is currently courting Russia to join. If they do, OPEC will have control over 50% of Global oil output and over 75% of global oil reserves.(3)



Forecasters expect more of a rebound in oil that the market does. Click below Link
Oil Prices predictions

Tuesday, 16 December 2014

Who to employ? – unravelling Instrumentation qualifications

Over the past weeks many people have inquired about other formal qualifications in the Instrumentation and control field. In this post I hope this clear it all up any confusion from what is a confusing situation. This text applies only to Queensland training as I am not fully aware of when instrumentation training started in other states.
In Queensland instrumentation started in 1979. The course was called CN154 and basically covered many subjects not now in the current qualifications. This was the first of the instrumentation qualifications in Queensland and the outcome was a called a Fitter (instrumentation ) with a full restricted electrical license. Within this course was a full year of electrical training including all electrical theory now in the electrical course including  motors, generators, wiring etc as well as analogue and digital  electronics, pneumatics and all facets of instrumentation used in laboratories, quarries, gas plants, heavy refining industries and water sewage .
Over the years the trade has been minimized in some areas and expanded in others.  So it has been quite  a difficult prospect when one sits down and looks how the subjects related over the years. Having  done this I notice there are many gaps between training packages. .

All the MEM training packages in Queensland were a dual trade, 5 year apprenticeship.  As stated in the earlier blog this equated to the dual trade in the UEE package.
Here is a historical list of Instrumenatation qualifications

CN154 1985-1995 Fitter Instrumentation with full restricted electrical license 4 years
MEM40198 - 1998 Dual trade electrical instrumentation 5 years

MEM30498 - 1998 Instrumentation trade only 4 years
MEM40103 - 2003 Dual trade electrical instrumentation 5 years

MEM40105 - 2005 Dual trade electrical instrumentation 5 years
(UEE) CN100 ELK1C 1990 -1997 Dual trade electrical instrumentation 5 years

CN100 ELK1B 1990-1997 Sugar industry only did stage 2 instrumentation and full electrical course
UEE30809 1997-2009 instrumentation only 4 years

UTE39036 1997 – 2009 Dual trade electrical instrumentation 5 years
UEE31207 2009 March 2012 instrumentation only

UEE31210 (this one was only around for a very short time)
UEE 31211 current qualifications:  instrumentation only 4 years

UEE 30811/31211 current qualification: Dual trade electrical instrumentation 5 years
Now the problem is that over the years the qualifications have changed.  Some subjects have been dropped and others added.

Also there is an issue called “currency”.  Currency is whether the knowledge you have gained is relevant to the modern instrumentation industry today.

When I did my trade in 1979 we worked mostly in 4-20 mA loops, links and levers, electronics, electrical and pneumatic based instrumentation.
Some of the gear I worked on included mercury filled differential pressure flow meters designed by George Kent in the early 20tth century.   Now days that is all different we delve mostly in current /digital loops, protocols, DDC, some pneumatics and internet applications. Hart communicators and process calibrators are the norm today as is PLC applications, SCADA and Distributed control systems. In my day they were new.

So if one was trained in a course older than 5 years it is safe to say that there would be some subjects that that person may not have completed in the trade but could be deemed competent through an RPL activity.   As many instrumentation people I know still work in the industry they have been upskilled over the year. The basics of theory are the same when it comes to flow pressure level temperature process control and valves but the calibration and usage may have changed.  

This is what an RPL activity can do recognise areas that may need revisiting or upskilling in.  So to be current, as well have all done or are doing here now with teachers, we are upskilling through an RPL activity to obtain the new qualification. There has been a lot of change in some process and new solar and renewable energy applications. We are also heavily involved in the internet and networking capabilities now as with the introduction of foundation fieldbus and other protocols.  In my opinion if I was to maintain my currency I would go through an RPL process and see what new areas I would need to learn. This trade is changing all the time and in the future will be the forefront of all communications applications in plants.
Being in the field for over 30 years and being a teacher for half of that I keep my skills up to date by going back into industry and working with the new equipment.  Also where I work we only use the equipment industry now use so that people we train are work ready when returning to their worksite.

There is one qualification I have seen on the blog which I have little knowledge about UEE 42211.  This qualification is the next step for people who have UEE 31211 but it is mostly Hazardous areas subjects.  UEE 40411 only covers stage two instrumentation and UEE 42211 could be used for gaining the stage three instrumentation but will not give you a trade qualification.  I hope this clears it all up any confusion.

Mal in foreground with the SkillsTech Electrotechnology  team.


Malcolm Garrick
Business Manager - Delivery Teams
Educational Delivery
T: +617 3259 3052
M: +614 0759 0901
F: +617 3259 3078

A: 776 Kingsford Smith Drive, Eagle Farm, 4009

Thursday, 27 November 2014

Jobs for the next 5 years

A quick look in the job section in the Saturday papers will reveal that every employer seeking electrician to work in heavy industry has a preference for a Certificate III in instrumentation. Just this week two major companies one in Queensland and one in the Northern Territory are calling for these dual traded people.

According to various statistics there are over 20,000 electrical personnel working within Queensland. The statistics also indicate that the state will need an additional 15,000 more within the next five years.

Sunday, 23 November 2014

Hazardous Areas for CSG

EEHA (Electrical Equipment in Hazardous Areas) Training traditionally has been, and still is, a requirement of many companies who have an interest in or responsibility for work being carried out where an explosive atmosphere is or could be present.  Hazardous Area or HA for short training is used to give primarily electrical trade-persons in the CSG sector an insight and understanding of hazardous areas.
The training includes the standard activities performed by electricians in hazardous areas including installation, maintenance and testing and focusses on the requirements to perform these tasks in a hazardous area.  For example, interconnectors, pipelines, MLV’s, compressor stations and the LNG plants all qualify as HA’s in some or another.
What factors or events will deem an area as hazardous or explosive are also covered in the training as well as the nature of gasses and dusts which make them hazardous. Knowledge of the hazards and of the techniques used to overcome these hazards is reinforced by reference to International and Australian Standards.
The various methods used to prevent an explosive situation from occurring are explained in detail including an explanation of how they can prevent an explosion and what will happen if you do not follow correct procedures. The methods covered include exclusion, containment energy limitation and avoidance, better known as:- Exd, Exe, Exi, Exn, ExtD, Exp and so on. Participants are taught not only how they work but also what to look for during an inspection that would make the apparatus non-compliant. They are taught the basic principles in area classification which gives reasons for the area to be called hazardous and how hazardous it may be (zones).

Companies who employ electricians performing tasks in Hazardous Areas would benefit greatly by having their electricians trained in hazardous areas. These electricians will have a greater understanding of the equipment they are working with as well as the reasons behind the construction and installation guidelines for the equipment. This should give companies a sense of security in the knowledge that they are only employing competent trade-persons and will flow on to a greatly reduced risk of explosions and the catastrophic results of them.
Hazardous Area training is relevant to electricians who perform tasks in ALL industries where an explosive atmosphere may exist.
Keith Pattingale - Lead Vocational Teacher
TAFE Queensland SkillsTech - Eagle Farm Campus

Wednesday, 12 November 2014

Network Fundamentals for Instrumentation and Control Industry for the CSG industry

Industrial IT called 'Network Fundamentals for Instrumentation and Control Industry' has been developed and delivered by TAFE Queensland SkillsTech. Every industry and process is becoming more automated. With CSG proponent, SANTOS using the Emerson Delta V, Origin Energy using the Yokogawa Centum VP system, QGC have gone with ABB 800A, with Arrow Energy adopting the Honeywell, Distributed Control Systems (DCS).

The Industrial IT program objective is to provide a basic understanding of network fundamentals and provide practical skills in configuration, installation and fault finding of an IP based network system including switches, hubs and routers, says SkillsTech Australia. This will include LAN and WAN cables and wireless connectivity. In addition virtual LAN (VLAN), NAT and firewall security will be implemented.

Topics covered in the program include configuring LANs and WANs; hubs; switches; routers; network types; network media; routing and switching fundamentals; the TCP/IP and OSI models; IP addressing; extending switched networks with VLANs; determining IP routes; public versus private addressing; NAT and DHCP; managing IP traffic with access lists; implementing network security; establishing point-to-point connections; wireless technologies; and troubleshooting. The course will also describe how a network works and how to implement an IP addressing scheme and IP services to meet network requirements in a medium-size enterprise branch office network.

Participants learn how to configure, verify and troubleshoot a switch with VLANs and interswitch communications; and to identify security threats to a network and describe general methods to mitigate those threats.

Thursday, 11 September 2014

Who to hire? Certificate III Instrumentation graduate OR Certificate IV Electrical – Instrumentation graduate

As the lead institute in Electrical and Process Control and Instrumentation TAFE Queensland SkillsTech often fields industry calls seeking clarity around the confusion surrounding Instrumentation Qualifications.  Training managers and HR enquiries are probing if candidates who hold a Certificate IV in Electrical Instrumentation should be employed before a candidate holding a Certificate III Instrumentation and Control – well no.

To fully understand this difference between these two qualifications one should realise that the UEE31211 Certificate III is the full tradesperson qualification including associated licensed outcomes while UEE40411 is a post trade certificate IV qualification in electrical.

In Australia there are two training packages that have been used for Instrumentation and Control and Electrotechnology.  The first is the Engineering training package or MEM40105 (Certificate IV), and the other is the Electrotechnology training package or UEE31211 (Certificate III).  Both are trade qualifications and are 5 year apprenticeships (for UEE31211 TP00423 in SA it is a 48 month apprenticeship also gives a restricted electrical licence outcome).  On completion a full electrical license is issued. The reason for the mixture of Certificate III and Certificate IV is purely historical.  This approach was something that occurred back in the late 90's, and then one training package aligned itself with the UEE Certificate III and the other continued with the MEM Certificate IV – presenting confusion in the employment and recruitment ranks.

Geographically, Queensland, South Australia, Tasmania and New South Wales are using the Electrotechnology training package Certificate III UEE31211.  While Western Australia retained the Engineering training package (MEM40105). I should stress that this can be purely an employee’s choice as to which one they use – however from 2015 the MEM approach will not result in the electrical license outcome.

The end-result is there are the two qualifications that allow a person to be recognised as an Instrumentation and Control tradesperson, UEE31211 and MEM40105. For a person who holds the MEM40105 wishing to attain the UEE31211 this transfer can only been achieved via a RPL (Recognition of Prior Learning) process by an accredited Register Training Organisation (RTO). The reason for this is because MEM40105 may not cover all instrument units due the variations across the states.

To add more confusion

This had led to industry confusion with employers who wish to maintain a national footprint.  A new qualification called Certificate IV in Electrical - Instrumentation UEE40411 from the UEE training package has been in use since 2009. The Certificate IV Electrical - Instrumentation UEE40411 is a post trade qualification and was designed to give electrical people a ‘base’ knowledge in Instrumentation.  To enrol in the course you must already hold an electrical mechanics Licence.  Although popular UEE40411 does not fully satisfy the second stage of the instrumentation apprenticeship as there are three subjects missing which make up the stage 2 of UEE31211.  Athough UEE 40411 is often considered a higher qualification it is not an instrumentation TRADE Qualification it is a post trade electrical qualification.  Only seven competencies from the UEE31211 qualification (and when mapped to MEM40105) are offered in the UEE40411 post trade course.  The seven subjects offered in UEE40411 by most RTO’s are

•UEENEEI101A Use instrumentation drawings, specification, standards and equipment manuals
•UEENEEI102A Solve problems in pressure measurement components and systems
•UEENEEI103A Solve problems in density/level measurement components and systems
•UEENEEI104A Solve problems in flow measurement components and systems
•UEENEEI105A Solve problems in temperature measurement components and systems
•UEENEEI150A Develop, enter and verify discrete control programs for programmable controllers
•UEENEEI151A Develop, enter and verify word and analogue control programs for programmable logic controllers (not in trade).

Of course there are other requirements but these are the instrumentation competencies that align to the trade qualifications certificate III UEE31211 and mapped to the certificate IV MEM40105.

Unfortunately these subjects do not satisfy the actual stage 2 of the trade qualification.  Missing from the UEE40411 are

•UEENEEI111A Find and rectify faults in process final control elements
•UEENEEI107A Install instrumentation and control cabling and tubing,
•UEENEEI108A Install instrumentation and control apparatus and associated equipment

Although they can be found in the electives, when the rules of the package are followed a problem arises with the points required to obtain the qualification.

The Solution
SkillsTech Australia offers these subjects in the stage 2 Block to overcome this issue.  To be recognised as an Instrumentation and Control Tradesperson a person needs to complete 920 core points and 140 elective points. The lead institute in Instrumentation and Control in Queensland offers the following program.

Stage 1 of the instrumentation and control apprenticeship are electrical/ohs and environmental subjects
Stage 2 involves all of the subjects listed above.
Stage 3 involves

•UEENEEI106A  Set up and adjust PID control loops
•UEENEEI110A  Set up and adjust advanced PID process control loops
•UEENEEI112A  Verify compliance and functionality of instrumentation and control installations
•UEENEEI113A Setup and configure human-machine interface (HMI) and industrial networks
•UEENEEC024B  Participate in instrumentation and control work and competency development activities

Plus four electives
•UEENEEI118A  Set up weighting measuring and control instruments
•UEENEEI131A  Set up gas analysis measuring and control instruments
•UEENEEI132A Set up water analysis measuring and control instruments
•UEENEEI133A  Set up scientific analysis measuring and control instruments

Ok, so to put it simply
UEE31211 and MEM40105 are trade qualifications for instrumentation and control
UEE40411 is a post trade electrical qualification and does not satisfy a trade outcome nor the stage 2 of the trade competencies found in the core.

Mal Garrick has been involved with instrumentation since 1979. We have attached a link to you tube which highlights instrumentation.  I ask that you look at the equipment used to ensure that people do know how to work in the instrumentation field.


Monday, 7 July 2014

Gas Transmission Pipeline (GTP) training - UEG

In late 2013, TAFE Queensland SkillsTech (SkillsTech) was awarded the Saipem Australia Pty Ltd contract to deliver enterprise training on the 412 kilometre Gas Transmission Pipeline (GTP) that runs from Fairview in the Western Downs to Curtis Island just off Gladstone.

Saipem Australia Pty Ltd was the successful bidder to construct the DN 1050 42 inch gas transmission pipeline and ancillary equipment for gas giant SANTOS GLNG. The SANTOS GLNG ECP (engineering, procurement and construction) contract included a comprehensive training component and this was subsequently awarded to SkillsTech because of their experience in the sector.  SkillsTech’s role was to deliver the enterprise training on the specific gas pipeline and equipment, project manage other vendors such as industrial process control heavy weight Emerson, all within a very tight timeframe of three months.
The SkillsTech approach
The challenge for SkillsTech instructors was converting a comprehensive and complex vendor and equipment specification manuals into sequenced, clustered and logical educationally sound training programs for the SANTOS GLNG operational and maintenance (O&M) staff to follow.

The training was delivered over 2 x 5 week training sessions in Gladstone followed up with visits to various camps in the field starting at Fairview. The program started with a comprehensive review of the SANTOS Environmental, Health and Safety and Risk Management systems, safety procedures and EHS policies.  The program addressed: general description of the pipeline systems and ancillary equipment, pipelines routes and profile crossing the Calliope range to the Mount Larcom tie-in near the marine crossing at the ‘Narrows”.  Instructors explained specific pre-commissioning, operating and safe guarding philosophy, operating scenarios for normal and abnormal operations and all necessary cautions regarding the ‘steady-state’ operations and maintenance of the pipeline.
 The field visits comprehensively covered operation and maintenance of the pipeline assets including, Biffi MLV’s (main line valves), ESDV (emergency shutdown valves) stations, HPU (hydraulic pressure unit), CCTV, Solar panel operation, cathodic protection, SCADA (supervisory control and data acquisition) and Delta V DCS (distributed control system) telemetry of the pipeline back to the POC (Pipeline Operation Centre) on Curtis Island.

Malcolm Garrick, SkillsTech Business Manager and lead instructor on this project commented that “the project certainly was challenging, however the support of the Saipem engineering staff and SANTOS GLNG project staff in Gladstone was invaluable. We are really pleased with the outcome for Saipem and their client, SANTOS GLNG operations and maintenance staff.  We worked through all the P&ID drawings and used that as a starting point for all the identification, isolations and “what-if” scenarios “

Outcome for Saipem and Santos GLNG 
Whilst the enterprise training focus was specifically of the Saipem pipeline and equipment there was relatively straight forward mapping exercise to deliver a UEG11 Gas industry training package outcome.  Some units such as ‘pigging’ will not occur until later in the commissioning and subsequent handover, the participants are working through some theory gaps and keeping a log book to validate their additional field work.  All successful participants will gain a UEG30114 Certificate III in Gas Supply Industry Operations with some staff looking at the UEG40114 Certificate IV in Gas Supply Industry Operations.

Saipem Handover
Saipem is on track to handover the pipeline and associated infrastructure sometime in mid-2015 with SANTOS GLNG ready to take possession and run the GTP at steady state.  Mary Campbell TAFE Queensland SkillsTech’s General Manager said, “There is no other TAFE in Australia with this type of Gas Transmission Pipeline training experience. We are all very proud of the excellent work undertaken and have enjoyed working with our Saipem and SANTOS GLNG partners.

Saipem is a leader in oil and gas projects with substantial deep-water experience in the provision of engineering, procurement, project management and construction services. Saipem’s unique capabilities are in the design and the execution of large-scale offshore and onshore projects, and technological competencies such as gas monetisation and heavy oil exploitation. 

To know more about the UEG30114 Certificate III in Gas Supply Industry Operations,
please call/email:

Garry Hargreaves
Corporate Solutions Manager, TAFE Queensland SkillsTech
Ph: +617 3244 0771| Fax: +617 3272 4131 |

Malcolm Garrick
Business Manager - Delivery Teams, Business Manager, Educational Delivery
TAFE Queensland SkillsTech
Ph: +617 3259 3052 | Fax: +617 3259 3078 |
776 Kingsfordsmith Drive, Eagle Farm 4009 | Locked Mail Bag 2020, Archerfield QLD 4108



RTO No. 0275 | CRICOS No. 03020E