Pilbara Ports Authority

The CEO of the newly formed Pilbara Ports Authority discusses the amalgamation of the Pilbara’s ports and the consequences for Western Australia’s world trade

About This Project

Recognised worldwide for its massive reserves of iron ore and other minerals, the Pilbara region in northwest Western Australia is the mining capital of the state and probably the country. The income from its mining exports contributes significantly to the state’s economy and helped keep Australia afloat during the global financial crisis. In facilitating this trade, the Pilbara’s bustling ports are crucial to the country’s success.

 

On 1 July 2014 the authorities for the Pilbara’s two main ports – Port Hedland and Dampier – combined into the one Pilbara Ports Authority (PPA). This new organisation initially manages the Port of Port Hedland on the northern coast and the Ports of Dampier and Ashburton to the south, but in time will also manage the proposed ports of Anketell and Cape Preston East in between the three.

 

The amalgamation was a major undertaking – one that was in the works as far back as 2012, explains PPA CEO Roger Johnston, when set in motion by government reforms.

 

“In 2012, the Western Australian Government announced a number of reforms to improve port governance, including the establishment of four regional port authorities,” he explains.

 

“In 2013, the Ports Legislation Amendment Bill was introduced to Parliament. The bill would see four new regional port authorities established, of which Pilbara Ports Authority is one.”

 

Formation

 

The three other new port authorities are Kimberley, initially comprising the port of Broome; Mid-West, the port of Geraldton; and Southern, the ports of Bunbury, Albany and Esperance.

 

The prominence of Port Hedland as the world’s largest bulk export tonnage port, in particular, makes PPA the largest and most nationally significant of all the new authorities. Nevertheless, where several issues prevented the amalgamation of the southern ports and delayed the creation of the Southern Ports Authority, the formation of PPA was completed without a hitch in time for the 1 July deadline.

 

“Fortunately, it has been a smooth and positive transition in the lead-up and commencement of PPA,” says Roger.

 

“This is largely due to the hard work, diligence and professionalism of staff based in Perth, Port Hedland and Dampier working together before and after the 1 July commencement date.”

 

PPA may be up and running but it stands to endure a few more changes under the state government’s reforms. Roger says that a further tranche of amending legislation is planned to be introduced to the state parliament in 2015 that will shift the responsibility and control of Shipping and Pilotage ports from the Department of Transport to the relevant port authority.

 

“PPA will at that time include the proposed port at Anketell and the SPA ports at Port Walcott, Cape Preston (East and West), Balla Balla, Varanus Island, Barrow Island, Airlie Island, Thevenard Island and Onslow,” he explains.

 

Objectives

 

The Western Australian Government had many reasons for amalgamating the ports. The state’s Minister for Transport – formerly Troy Buswell, now Dean Nalder – set out the objectives as thus:

 

  • Optimise the use of port infrastructure;
  • Improve investment decisions (such as a coordinated approach toward infrastructure funding and attracting private sector investment);
  • Enhance corporate governance via strategic, operational and financial planning, risk management, human resource and skills management, stakeholder management, safety management and environmental management;
  • Reduce expenditure through efficiency gains and reduced duplication of effort;
  • Improve commercial practices and skills, acumen and capability;
  • Ensure consistency of port views on regional issues; and
  • Improve marine safety and harbour master functions at ports that were established under the Shipping and Pilotage Act 1967.

 

In addition to enhancing the ports’ efficiency and financial management, the reform bill seeks to bring the ports’ management closer to the public and their scrutiny. It decreed the removal of commercial representation from the authorities’ boards, alongside the establishment of port community consultation committees through which information on port operations could be shared with the public.

 

In the interest of business, meanwhile, a standard provision was introduced to allow port authorities to operate 24 hours per day as long as they weren’t breaching noise level and other conditions outlined in the Environmental Protection Act 1986.

 

Consequences

 

As CEO of the newly formed PPA, Roger has observed several benefits for the ports’ employees, as well as the ports’ corporate users.

 

“The amalgamation offers opportunities for staff and proponents alike,” he remarks.

 

“For staff it offers enhanced career path opportunities as part of a larger organisation. For proponents, it offers the benefits of engaging with a single entity or point of contact when exploring or realising business opportunities.”

 

Roger adds that PPA benefits from having an oversight of all shipping across the Pilbara region, and from being the single point of contact for enquiries related to any or all of its ports. The amalgamation has “enhanced corporate governance,” he says, and allowed processes such as development applications to be streamlined.

 

The bringing together of such prominent industry hubs could also benefit the associated port towns and their residents, Roger explains. PPA’s incorporation of “the largest bulk export tonnage port in the world, as well as world-class oil and gas export operations from across the Pilbara region,” will lend it “increased national and international significance,” he says, that will “shine a spotlight” on the region’s towns.

 

“Communities can expect to benefit from a more responsive approach to managing port facilities,” he adds; an important point in an age where civilians often hold strong opinions concerning commercial developments.

 

Strong foundations

 

Roger himself has lived in Australia for 16 years, over which time he has assisted in the construction of Fisherman Island’s grain export terminal; helped manage the coal supply chain in the Hunter Valley; and worked in Western Australia’s construction materials business.

 

Prior to becoming CEO of PPA, Roger was CEO of the Port Hedland Port Authority. Within the two and a half years he held the role the port’s output grew from 200 million tonnes per annum (mtpa) to more than 370mtpa, while its profit grew from AU$4.6 million in financial year 2011 to approximately $158 million in financial year 2014. He is looking forward to overseeing continuing growth at Port Hedland, as well as at the new ports added to his remit.

 

“With import and export tonnages set to continue to grow in both Dampier and Port Hedland, PPA has identified a number of development opportunities to enhance the capacity to cater for existing and future port users’ needs,” says Roger. It’s a substantial list.

 

Plans at Port Hedland

 

At Port Hedland there is a drive to expand both public and private capacity, as well as to build new administrative facilities to manage this increased activity.

 

PPA recently received environmental approval to build two general cargo berths at Lumsden Point, as well as an access road linking to the new Great Northern Highway. The authority has also planned the footprint and location for the development of a Multi-User Outer Harbour (MUOH) facility to be located to the west of BHP Billiton Iron Ore’s proposed outer harbour development.

 

“The MUOH will allow proponents to build facilities in order to export product, with a range of commodities in both liquids and dry bulk provided for, and includes cargo planned through the Boodarie strategic industrial estate,” Roger explains.

 

Another plan outlines the creation of a new strategic land area called Boodarie Stockyards, to accommodate the needs of existing and future proponents exporting from the inner harbour and planned MUOH. This area will facilitate at least 200mtpa of trade for the MUOH, as well as the development of proposed transport corridors and strategic infrastructure for trade associated with the Boodarie industrial estate.

 

Plans are also underway to upgrade the existing, 40-year-old Control Shipping Tower with a brand new Integrated Marine Operations Centre (IMOC). This will accommodate all the Vessel Traffic Services (VTS) and marine functions of the port under one roof.

 

“The proposed site is immediately to the north west of the existing offices, enabling linkage to the existing offices; provides a tower for good line of sight across the harbour from Hunt Point to Stingray creek; and will include a new consolidated MSIC and reception entrance,” Roger elaborates. “The proposed IMOC will be in line with world’s best-practice VTS.”

 

Meanwhile, Fortescue Metals Group subsidiary The Pilbara Infratructure Pty Ltd has begun building its fifth berth at South West Creek, to be called AP5 (also mentioned in the Goodline piece).

 

“Dredging for the AP5 berth has been completed and planning has commenced for the development of a bulk liquids berth at AP6, to support the growth in hydrocarbon imports and bulk liquids,” says Roger. “In addition, Roy Hill is constructing a further two capsize berths at SWC1 and SWC2.”

 

Plans at Dampier

 

PPA is overseeing the development of a number of facilities, systems and features at Dampier Port too. The authority has obtained environmental approval for a multi-user general and specialised cargo load and unloading facility called the Dampier Marine Services Facility (DMFS) that is intended to increase berth and laydown capacity, as well as help private sector companies better manage their logistics.

 

A new Floating Deck Transhipment System (FDTS) will facilitate general and project cargo handling. “This includes one hectare of reclaimed land, which will provide space for the loading and unloading of large floating decks that are capable of completing transfers of cargo at sea,” Roger explains. “Construction of the landside facility commenced in August 2013, with the first cargo offloaded through it in April 2014.”

 

Like Port Hedland, Dampier is also gaining a new VTS facility and its construction is already underway. Expected to enter operation later this year, the VTS Operations Base will play a key communications and monitoring role for vessels using the ports of Dampier, Ashburton and, in the future, Cape Preston and Anketell.

 

Finally, the Floating Deck Installation (FDI) planned for Dampier will see a large pontoon deck installed at the end of the Dampier Cargo Wharf. This will provide additional berth capacity for offshore vessel tonnage.

 

“PPA will also continue to focus on advancing the greenfield port development projects of Anketell, Cape Preston East and Balla Balla, further expanding the potential of the West Pilbara and connection to international markets,” Roger adds.

 

Relationship with the mining industry

 

Both the ports of Port Hedland and Dampier each serve their share of large and globally significant resources companies. Port Hedland’s key proponents include BHP Billiton (ASX, LON, NYSE: BHP; JSE: BIL), Fortescue Metals Group (ASX: FMG), Roy Hill, Atlas Iron (ASX: AGO), Process Minerals International Pty Ltd, Consolidated Minerals (ASX: CSM) and Dampier Salt; while Dampier’s include Rio Tinto (ASX, LON, NYSE: RIO), Woodside (ASX: WPL), Dampier Salt, Yara Pilbara Fertilisers (OBX: YAR) and Mermaid Marine.

 

In addition to providing these proponents and other stakeholders with reliable port facilities, PPA helps to facilitate trade and business opportunities. Under state agreement with the Western Australian Government, PPA identifies “rights, obligations, terms and conditions for the development of projects whilst providing a framework within all parties must operate,” explains Roger.

 

The size and global standing of PPA’s mining industry proponents goes some way to explaining how its ports have continued to prosper even as the so-called Australian mining boom winds down and the industry’s smaller players struggle.

 

“The ports of Dampier and Port Hedland have continued to experience strong growth in both imports and exports, with frequent record-breaking figures achieved in recent years,” says Roger, adding that further strong growth is projected for the next five years.

 

“The port of Port Hedland achieved a record annual tonnage throughput of 372.3 million tonnes (mt) for the financial year, an increase of 29% from the previous year. The Utah Point Multi-User Bulk Export facility in Port Hedland recorded an annual total throughput of 18.7mt, an increase of 51% from the previous financial year. The Utah Facility achieved a significant milestone on 23 July 2014, with 50mt of product exported since its commissioning in 2010.”

 

Throughput at Dampier has not grown in recent years but it has stayed consistent, achieving an annual throughput of 177.1mt in 2013/14. Iron ore accounted for a staggering 82.5% of that, demonstrating the mineral’s enduring importance to the region’s economy. LNG made up about 11%, with salt, condensate, liquefied petroleum gas (LPG), ammonia and petroleum products making up the rest.

 

Future of the ports

 

Port Hedland is expected to grow even larger in coming years, culminating in a total throughput of 500mtpa by 2017/18. PPA is preparing for this anticipated growth with the aforementioned plans for additional berths at South West Creek, which will add an extra 55mtpa to the port’s export capacity, and potentially a Lumsden Point General Cargo Facility. The new MUOH facility will provide additional port capacity to accommodate greater volumes of bulk exports.

 

“PPA also recognises the economic benefits to the community associated with the arrival of cruise ships to the Port of Port Hedland, and will continue to facilitate further cruise ship visits in the future,” Roger adds, referring to the port’s growing popularity with tourists. The port has facilitated 11 cruise ships since 2011 – four of them in 2013/14 – and plans to accommodate five cruise ships each year going forward.

 

Dampier, meanwhile, will continue to focus strongly on iron ore and LNG exports as it gradually gains new facilities and capacity. One such facility is the Floating Deck Transhipment System (FDTS), which Roger says “will be seen as a key asset for expanding both import and export opportunities for a range of general cargo, including project base cargo”.

 

Construction at the smaller port of Ashburton, previously managed by the Dampier Port Authority, is expected to peak in 2014 with increased use of the Materials Off-load Facility (MOF) and other Common User facilities being developed in association with the Wheatstone Project. Majority owned by Chevron Australia, the Wheatstone LNG project is one of Australia’s largest resource projects. It is expected to produce its first gas in 2016.

 

With plans aplenty and even PPA’s smallest port harbouring a major up-and-coming resources project, it’s clear that the new authority is going to have its hands full for the foreseeable future. Supported by their years of experience at the world’s highest bulk cargo tonnage port, however, Roger and his team are looking forward to the challenging and exciting years ahead.

Company

Pilbara Ports Authority

Category

Mining

Phone

+61 8 6217 7112

Brochure

Category
Mining
Tags
Australia, Iron ore, mining, Pilbara, Ports, Spotlight