Oil and gas project flows for global New Zealand company

Internationally successful New Zealand industrial equipment supplier Flotech has won its first major project at home, thanks in part to work done by the Industry Capability Network (ICN) to identify opportunities for Kiwi companies in large projects here.

Flotech has been awarded a multi-million dollar contract to supply compressors for the Kupe oil and gas project, the largest of its kind so far in New Zealand.

The Kupe Alliance, made up of Australia’s Origin Energy and Indonesia’s Technip Oceana, is constructing an offshore oil platform to extract raw natural gas and light oil from the field that will be transferred to a processing plant it is building onshore.

New Zealand’s ICN has been working with Origin Energy since 2004 to identify competitive companies from New Zealand and Australia which are capable of supplying products and services to the project.

Flotech was put forward by the ICN as a candidate for supplying the mission critical compressors, which will be used at the onshore plant to process gas from the Kupe field. The company is a world-leader in this field, having supplied compression technology to projects in Europe, Asia and the United Kingdom.

Against overseas competition, Flotech was awarded the Kupe contract – a result that cements the company’s international credibility in its home country.

Flotech group managing director Steve Broadbent says the company found the ICN’s comprehensive networks in New Zealand and Australia, as well as its knowledge of the industry, invaluable.

“The real challenge for us was not so much knowing that the project was happening, but more ‘who is the contractor, who is the purchaser, where are they from and what are they after ?’ – information which the ICN was able to provide.

“They’re a good intelligence network and, because they’re not acting commercially for themselves, they also have access to higher levels of people involved in the project than we might have.”

ICN Project Manager Bob Murdoch says the network identified the Kupe project back in 2004 as an important opportunity to kick off a long-term relationship with Origin Energy.

“Kupe is Origin’s first major project in New Zealand but it has bought oil and gas licenses on the East Coast also. We hope that by showing them how capable local companies are for Kupe, that they will use these companies again in any future projects.”

Mr Broadbent adds that ongoing relationship will also be important to Flotech, which is also eyeing up further opportunities to supply New Zealand’s oil and gas industry.

“Kupe is a landmark contract for us to some extent in that it means the industry players here get to see that high quality, tailored equipment can be designed, made and serviced from New Zealand.

“It’s probably fair to say that capability hasn’t always been recognised in the past, which is why Flotech has tended to focus its efforts overseas – it’s nice now to be involved in a major project back in our own country.”

The Kupe development remains on track to begin producing gas in 2009. Mr Murdoch says Origin has done a good job of assessing the ICNs initial recommendations of local suppliers to ensure local industry has a full and fair opportunity to compete.

“Every component of the project has companies from around the world competing for it, meaning New Zealand and Australian companies are footing it against some of the best in the world,” he says.