Ever since the shale revolution in the U.S., the natural gas industry has been completely revolutionised. With supply and demand both still growing globally, there is vast potential within both emerging and established markets.
With Gastech 2018 in Barcelona around the corner, Gastech Insights spoke with confirmed speaker and President & CEO of McDermott, David Dickson to discover his views on the offshore gas market and how he sees it changing.
Gastech Insights: With the merger now completed between McDermott and CB&I, the combination of onshore and offshore skills will open many opportunities – how do you see the organisation growing in the market?
David Dickson: We are excited about the combination with CB&I and so are our customers. They view our combination of offshore and onshore capabilities favourably because it gives us the ability to solve a wider scope of challenges.
We will generate synergies on both the revenue side and the cost side. On the revenue side, our comprehensive capabilities give our customers the option of working with a single contractor on a wide variety of scopes. Additionally, McDermott’s existing strong regional presence and client relationships in the Middle East and Asia will open up significant onshore opportunities.
On the cost side, in addition to the economies of scale we gained from the combination, we believe we will uncover ways of executing our work that will transfer across offshore and onshore and make us more efficient, effective, flexible and innovative.
Gastech Insights: Where do you identify key opportunities in the current offshore gas market?
David Dickson: In the Persian Gulf, we have a substantial presence, improved by our combination with CB&I. The Gulf States are very active on the gas side of the industry, with a number of very large opportunities in the works right now. Other regions where we’ve identified key opportunities and feel that we are well positioned are Mexico and off of the eastern coast of India.
There’s also the market for gas that feeds LNG plants. We just completed the subsea installation of the Ichthys project that will supply gas to an onshore LNG facility in Australia. In Mozambique, most of the future production is slated for the LNG market, and we are active there.
We see key opportunities in the subsea market through our joint venture with Baker Hughes GE. Our recent offshore wins in West Africa and Southeast Asia are evidence that our combined offering is competitive and attractive in the marketplace.
Gastech Insights: You have previously credited McDermott’s success to its vertically integrated business model. With the industry continuing to evolve, how will McDermott remain dynamic and key to gas players?
David Dickson: McDermott’s offering now spans upstream, midstream and downstream through petrochemicals and even to the Power market. We believe this will be attractive to our gas-based customers. Our gas processing and LNG expertise are desirable by both onshore and offshore customers.
In addition, we are now one of the industry’s leading technology licensors. The Lummus Technology business gives us early visibility to our customers’ capex priorities, which helps us maximize pull-through offerings for other parts of the company. We also gained key pipe fabrication, modularization and storage capability through our combination with CB&I. We’ve strengthened our regional presence through the combination, and the size of the company gives us the ability to take on larger scopes than before.
Gastech Insights: With the US natural gas market continuing to boom with the abundance of shale, how do you think this will affect the offshore gas industry in the long term?
David Dickson: The U.S. shale success has changed the outlook for gas on a global scale in a positive way. With vast increases in gas supply have come equally vast potential demand markets, such as China, India and many other countries, as they try to improve their environmental situation or improve the availability of energy for their people. In some cases, such as the Gulf of Mexico, offshore gas is currently at an economic disadvantage, but over time the price of gas will eventually rise and offshore gas development will flourish. In other areas, such as the Persian Gulf, shale gas has had little effect on the gas development market. Most energy forecasts envisage a significant demand for offshore gas in the medium to long-term.
Gastech Insights: What are you most looking forward to at Gastech 2018 in Barcelona?
David Dickson: Historically, McDermott’s expertise and capabilities were in upstream, offshore and subsea oil and gas projects, but that changed significantly when we completed the combination with CB&I. So this is my first time attending Gastech.
I’m looking forward to highlighting McDermott’s wide-ranging capabilities in many areas of the natural gas industry. From our offshore and subsea expertise to LNG, gas processing, electric power and petrochemicals, McDermott offers full EPC and EPCI capabilities, and we look forward to discussing how we can help customers meet their development challenges.
If you would like to hear more from Mr Dickson, book your delegate pass now for Gastech 2018 (17-20 September) to attend the CEO Panel – “How can EPCs deliver new gas & LNG projects in low-cost, low-margin times?”
Image courtesy of McDermott
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