Phillips told the recent RIU Good Oil Conference in Fremantle that billions of dollars of shareholder value that has been destroyed by the duplication of infrastructure to support the six LNG trains developed by BG Group, Santos and Australia Pacific LNG, a situation that should never have been allowed to develop.
He said companies and regulators had been unable to come to terms with the speed with which the CSG-LNG sector developed since 2009.
"Schedule-driven decisions, building three plants at the same time, the competition for labour, the lack of government intervention to mandate single pipelines, single narrows crossings, single port facilities … that could have saved shareholders an enormous amount of money," he said.
Some estimates suggest some $6 billion was wasted by duplicating pipelines, power plants and other services that could have been shared.
"On top of that, I am pretty sure not everyone got Bechtel's A-team on the construction side, and what was lost, I think, on some of the players, was that the issues were in the upstream, and the delivery of huge numbers of wells into LNG projects was a fairly hard science," Phillips said.
Delivering unconventional gas at those volumes and rates had never been done before, and in the scramble to keep up Phillips believes a lot of the upstream experience was supplemented with a workforce that lacked the required skillset from related industries simply to meet the demand for boots on the ground.
The sheer number of wells required meant decisions were made based on inflexible schedules.
"One of the issues that was manifestly going to provide a challenge was the development of a regulatory regime at the same time as the activity was occurring … it very much was a case of the blind leading the blind in terms of the regulatory situation, and everyone trying to get changes to the regulatory framework," he said.
Phillips said there have been a lot of lessons learnt, but he is not sure the opportunity will ever happen again, especially at current prices, but if it does happen again corporations need to learn from the Gladstone experience.
Blue is speaking as a company with more than 4000 petajoules of uncontracted contingent CSG resources in the Bowen Basin, which it believes it can rapidly and cheaply covert to 2P resources, if its gas is needed.
Its main hope for development is a positive investment decision by Shell and PetroChina's Arrow Energy to construct a pipeline to Gladstone, with front-end engineering and design ongoing, but general expectations are that Arrow LNG will be subsumed into BG's Queensland Curtis LNG.
Some 3500PJ of Blue's contingent resources are in licences mixed in with Arrow's leases, and Phillips is obviously keen to see the pipeline constructed, a move that could unlock a 3.4 trillion cubic feet resource base the company claims to have defined.
While the Arrow pipeline would be a simple solution, although Blue is also optimistic that domestic demand will increase, with industrial users increasingly crying out for gas.
Blue is well positioned to step any supply gap, he said.
And he also sees increasing demand simply through an interest in reducing emissions, not only from coal fired power, but as a substitution transport fuel, with compressed natural gas lacking the particulate pollution issues of diesel, and it would be cheaper than diesel, which is heavily subsidised by the government for miners and farmers.
That has been one of the longest held dreams of the CNG sector, predating LNG export dreams, but so far the market has taken only baby steps.
Phillips believes Blue can step in to help meet the east coast gas shortage, because buyers are struggling to engage with the big resource owners, who control around 90% of Queensland's gas, and need to drill thousands of wells to meet the demands of their hungry plants at Gladstone.
Blue also has a position in the Greater McArthur and Wiso basins, and is potentially poised to benefit from up to seven wells being drilled north of its leases by groups led by Pangaea Resources and Origin Energy.
