Lessons from Down Under: Gladstone, Prince Rupert’s sister city?

If Prince Rupert had a sister city in Australia, Gladstone would certainly fit the bill

From LNG boom to port operations to fishing and Indigenous Peoples culture

If Prince Rupert had a sister city in Australia, Gladstone would certainly fit the bill.

From port operations, fishing and tourism to Indigenous Peoples culture, the similarities between Gladstone, a city of approximately 32,000 located on Australia’s northeast coast, and Prince Rupert are glaring.

Gladstone’s major industrial site is one of the busiest ports in the country, it has the Wiggins Island Coal Export terminal and north of the city, Curtis Island hosts three liquefied natural gas (LNG) plants.

While there are many comparisons between the two cities, Gladstone’s LNG development is several years ahead of Prince Rupert and taking lessons from a community that has already developed its LNG export market could help the North Coast avoid the bumps in the road ahead.

Mellissa Case is the Prince Rupert sustainability and community relations manager for Bechtel, an international engineering, construction, and project management company with deep ties to the Gladstone projects. Case, who worked on the Curtis Island LNG project near Gladstone is now working with the Pacific Northwest LNG proposed project for Lelu Island.

Recently, she offered a look into the crystal ball of what Prince Rupert can expect, if and when a proponent delivers its final investment decision (FID) to go through with an LNG project.

Build housing before they come

“As soon as an FID for a project is announced you’ll start to have a housing problem,” Case said.

Her suggestion is to start building now. She has already seen people arrive in the city from as far away as Manitoba looking for work opportunities and, as soon as an FID announcement is made, people will flock to the city.

Her other warning is that housing built 18 months after an FID will cause an over-supply in the market.

“It is a real balancing act to make sure you get the balancing act right,” she said.

In the last five years, Gladstone had three LNG terminals built and ready for export within six months of each other. During the construction phase, the workforce peaked at 14,500 people with 5,000 from the community.

Darryl Branthwaite, who has lived in Gladstone since 1982, was doing commercial real estate at the time and saw the demand for housing and rentals skyrocket.

“As those people left the region again instead of three to four per cent vacancy rates throughout the town you end up with around 10 to 12 per cent, maybe even 15 per cent. We’re talking going from 400 vacancies to 1,400 vacancies,” Branthwaite said.

He’s now the CEO of Gladstone Area Promotion and Development Ltd. which is attempting to prop up the city to be a tourist destination to make the city more sustainable.

Diversification

Gladstone isn’t only reliant on its port or the export of coal. Although, it is the fifth largest coal terminal in the world and its port handles more than 83 million tons of cargo each year, it also has 11 major industrial operations.

For example, Queensland Alumina and the Rio Tinto Yarwun refineries both send their Alumina to Kitimat. Gladstone has $65 billion worth in projects in the pipeline and a 50-year plan to turn the region into an industrial powerhouse in Australia.

There are other ways it has diversified as well.

“Gladstone has diversified quite a lot to take advantage of its industry and industrial tourism is huge and generates massive income for the region, which is really surprising,” Case said.

After the construction phase ended, many of the workers left, and Branthwaite said retail spending dropped right off. But in his role to promote and develop Gladstone, he is trying to turn the region into a tourism hub.

They have had two cruise ships this year and he said it’s lifted the community’s spirits.

“Now they can see a different industry coming a long way and they’re quite proud of it,” he said.

The region has a lot to offer, even though the city is starting its tourism business from scratch. It has national parks, a thriving commercial fishing industry, bizarre wildlife (at least to people from outside Australia), historical sites from 1770 discoverers, Aboriginal cultural sites and the Great Barrier Reef.

“Under our noses we haven’t been looking for tourism because industry has been keeping us afloat and now they have to look at tourism and change their focus to keep these ships coming in,” Branthwaite said adding that there are 17 more cruise ships scheduled to arrive in the next two years.

Finding a niche

Businesses in the Gladstone community experienced both the advantages to having a massive industrial project being built nearby and the disadvantage to losing employees who flocked to the higher paying industry jobs.

One success story Branthwaite offered was when all the engineering companies banded together to form the Gladstone Engineering Alliance. This allowed many of the smaller engineering companies in the region to share on some of the bigger projects and keep the money within the community.

Case’s advice for businesses in Prince Rupert is don’t try to be everything to everyone, and keep prices realistic and competitive. Putting a “local tax” on prices will only drive the proponent’s business elsewhere.

“A lot of businesses that were the most successful in Gladstone found a niche market, found a problem, and went out of their way to fix it. They were really responsive and they also didn’t extend too far beyond their capabilities,” Case said.

She gave examples of coffee shops and coffee vans that created a partnership. The vans would sell the goods from the shops and drive to the work sites to meet customers. They served breakfast and lunches to meet the market demand.

Another successful business venture was the German sausage man who would drive two hours to the community and would serve 2,500 sausages in two hours at $7 a piece.

“There are thousands of opportunities for local businesses. My neighbour completed a simple task that he could do in his own shop without employing extra people and ended up with a multi-million contract,” she said.

The development of the three LNG sites in Gladstone brought $1.5 billion in local wages, $200-million in social infrastructure investment and 36,000 purchase orders and sub-contracts to local businesses. $1 billion was spent with local businesses and more than 350 local businesses provided support for the project.

There were also 436 apprentices trained during the projects’ five-year period and half of them were from the Gladstone community, said Case.

Gladstone and its three LNG projects were not without its hiccups, which is why learning from its successes and challenges may be key for Prince Rupert. Mayor Lee Brain said he hasn’t connected with people in Queensland yet, but council is already studying the effects of what happened there for developing future policies and plans.