Which companies will win from the Gorgon gas deal?

The scrambling for a slice of the biggest ever resources project in Australian history has started. While most of the spoils from the $50 billion Gorgon liquefied natural gas project will fall to the gas companies behind the project, Chevron, Shell and Exxon Mobil, there will be plenty of opportunities for smaller companies to win work from the project, particularly during the construction and start-up phase.

Yesterday, engineering firm Clough emerged as one of the early winners after it won a slice of a $2.7 billion engineering and construction contract associated with the project.

The Chamber of Commerce and Industry in Western Australia says that nearly 15,0000 jobs will be created, and a whopping $33 billion spent on local goods and services over the life of the project.

That money will be spent throughout the economy, but there are a few main sectors which stand to benefit most:

Engineering and construction

Clough (which has a market capitalisation of $650 million) is part of a joint venture being run by US engineering firm Kellogg, which was yesterday awarded a $2.7 billion contract to engineer, procure and construction manage the LNG downstream and logistics portion of the project.

A smaller engineering firm called Forge Group (which has a market cap of around $77 million) recently won a $10 million contract for design and construction worth associated with the project, while Leighton Holdings has won $700 million worth of site-clearing and preparation work. Other engineering firms that could get a slice of the action include Worley Parsons, Downer EDI and United Group.

Cement

This project needs 23,000 cubic metres of the stuff, so there’s no surprise that tender is being hotly contested. While some analysts have claimed German company CEMEX is the frontrunner, local building materials company Boral has submitted a bid, and there is speculation that West Australian company BGC (owned by billionaire Len Buckeridge) is also in the running.

Marine

Mermaid Marine (market cap: $550 million) has already signed a deal with Chevron to expand its supply base to support the Gorgon project, so would be well-placed to win more work. Neptune Marine and Programmed Maintenance Services are other companies that are likely to be in the running to win contracts.

Housing

The workers flooding into WA to work on the project will need to live somewhere and the cost of building Gorgon’s accommodation village has been put at $500 million. Nomad Building Solutions has already won a $46 million contract as part of the village project and will not doubt look at winning further work.