Project Integration And Procurement Management

This report evaluates the Gas Market of Australia, to understand the role of gas providers in Australian Gas market. It also identifies the issues that are responsible for creating issues in the operation management of AGL. The report has indicated the upcoming trends in the Natural Gas market of Australia.

Running Head: Project Integration And Procurement Management
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PROJECT INTEGRATION AND PROCUREMENT
MANAGEMENT

Project Integration And Procurement Management
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Table of contents
Gas market in Australia...................................................................................................................3
Future Trends in Australian Gas Market.........................................................................................5
Sustainable Procurement Practices..................................................................................................6
Impact of technologies on customers..............................................................................................7
Impact of technologies on gas producers.........................................................................................8
Plan for project integration management.........................................................................................8
Procurement management plan for AGL.....................................................................................9
Responsibility and roles in the procure management................................................................10
Identifications of procurement needs.........................................................................................11
Vendor process of AGL Company.............................................................................................12
Conclusion.....................................................................................................................................12
Reference List................................................................................................................................13

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Gas market in Australia
A large part of the Australian population is dependent on the resource of natural gas,
which is widely available in a few distinctive parts of this country. The Gas markets are
concentrated in three parts of the country namely, Eastern, Western and Northern. AEMC or
Australian Energy Market Commission is the policy adviser to the Government of Australia
(Aemc.gov.au, 2018). Along with this, AER, COAG, and AEMO take important role in the
procurement and distribution policy of natural gas (Al Hinai et al. 2014). AGL is a provider of
electricity and gas in Australia and occupies a leading position in Australian gas market.
There are three independent market operators that regulate market operations in three parts of
the gas market. AEMO or Australian Energy Market Operator looks after the market operations
in South-eastern Australia. IMO or Independent Market Operator takes care of Western
Australia. Retail Energy Market Company Ltd or REMCo is the retail market operator in
Western Australia.

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Figure 1: Energy Supply Chain
(Source: Eex.gov.au, 2018)
The state purchasing boards procure natural gas from the gas producers through State
Purchase Contracts or SPC. Through these contracts, the states are entitled to get discounted
rates of natural gas. The supply of natural is dominated by a few suppliers that control the supply
chain management (Eex.gov.au, 2018). There are few components such as energy commodity,
network of services and Retail Services that constructs the supply chain of natural gas in
Australia.

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Local distribution network within each small area delivers gas to the business and
household properties of that area. Retailers are only responsible for the billing section of the
service. Among these retailers, there are few agents that also own the generation process of
energy.
Apart from these participants, there are the intermediaries who offer a range of services
to the consumers. Some of these services include security devices and other necessary
information on use and procurements of energy, including natural gas (Banks, 2017). Apart from
the four above mentioned bodies, each state has their own regulatory boards that regulate
Australian gas market under their limit of jurisdiction.
Future Trends in Australian Gas Market
Australia is a renowned producer in the world in case of liquefied Natural Gas
production. Since the trend of 2018 is showing that prices of crude oil are going to touch a higher
level, Australia stands a chance of taking a leading position in the production of LNG. As per a
newspaper report published in the Sydney Morning Herald, Australia is poised to take the
leading position from Qatar in LNG (Latimer, 2018). This report also informs that Department of
Innovation, Industry, and Science has assumed that LNG export of Australia may reach to $35
billion in by the end of 2018.
According to Fleming & Measham (2015), the Australian market for natural gas is aimed
at increasing the production and export without creating any adversities on environment and
participants in the supply chain management. As per the study of Rodger & George (2017), in
this transforming situation companies that are equipped with sustainable practices are going to be
benefitted from the surge in the Australian market of natural gas.

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Government is creating pressure on the Australian gas companies to reduce export of
natural gases so that in the time of volatile energy prices government can ensure smooth supply
of natural gases.
Australian gas market has witnessed many mergers and acquisitions in the last few years
(Kavonic, 2018). It can be expected that issues regarding export control would be resolved by the
end of this year. Kavonic (2018) opines that short-term contracts among the market participants
of gas market can be threatening because of volatile prices.
Sustainable Procurement Practices
AGL or Australian Gas Light is one of the major energy providers that supply electricity,
gas and solar power. AGL has many issues that are creating obstacles to the adoption of
Sustainable Procurement. Having an excessive number of suppliers is one of the reasons, for
which this company is more vulnerable with respect to the loss of the suppliers. Effects of
sustainable development have produced great results in energy market of Saudi Arabia (Islam et
al. 2017).
This company is also facing problems because those suppliers that do not provide profits
to the organisation. Sustainable procurement policies are emerging as a new model for procuring
natural gas from the producers as it has the potential of value addition in the services (Meehan &
Bryde, 2015). This is definitely an opportunity, of which Australian gas companies should adopt.
Apart from value addition, it is also beneficial for reducing production cost. Sustainable
procurement is not only related to the benefits of public and business houses, but it is also
positively connected with the overall development of the Australian economy. Sustainable

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procurement considers social, environmental and economic impacts of introducing these
practices (Ford, Steen & Verreynne, 2014).
Gas companies have adopted strategies that keep a check on unnecessary consumption
pattern. They have done it by managing the demand for gas in the particular areas.
Gas companies have also adopted processing of natural gas so that they create minimum
impact on the environment. Companies are applying select technologies that can reduce
environmental hazards. Australian gas companies are following sustainable procurement
policies.
In this respect, AGL can adopt Six Sigma for improving the quality of supply chain
management. As a result of the sustainable policies, it can reduce the distribution cost. Reduction
in the cost would enable AGL to increase their profit margin.
AGL has developed their sustainable procurement plan by including stakeholder’s
interest in procurements. It has developed the services by promoting supplier diversity. Instead
of depending on the suppliers for the supply of natural gas the company has developed the
quality of suppliers.
Impact of technologies on customers
Inclusion of latest technology in providing services to the consumers can create value-
addition in the products and services as it enables them quick and cost-effective services. The
inclusion of customer interests in the AGL services, the company can expand its realm of
business. Increase in the trust level with benefit AGL's policy of customer retention.

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Usage of latest technologies has increased the expectations of the consumers of this
company. This is because the use of technology has made the business efforts of the company.
Consumers expect that the company is more capable of providing cost-effective services to them.
As all the energy companies are vying for customer attention, AGL needs to offer a unique
service to the consumers. This would make sure that the organisation is not losing their valuable
customers.
Impact of technologies on gas producers
AGL has concentrated on making their services based on technology so that they can
provide better services to the consumers. It has not only made their services simple but has also
improved the company policies and service regulations.
The rapid expansion of automated technology has reduced the time of production.
Technologies such as control systems, handling big data and presence of sensor in their supply
chain management have brought transparency in the services by AGL.
The effect of mobile technology has also modified the reach of AGL to its consumers. Presence
of mobile technology has made services of AGL, safe and real-time. One of the main highlights
of this technology is that it is efficient and makes a minimum error. Because of mobile
technology AGL is able to communicate with their customers from any place.
Use of technology has made it easy for AGL to go along with the rules and regulations
applied by government authorities and boards. The presence of security features has enabled this
company to ensure data protection for customers.

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Plan for project integration management
The project manager of a project organises the task so that there is a minimum waste of
resources in course of Project execution. The stages of Project Integration Management are
divided into five stages, that are Initiation, planning, execution, monitoring-controlling, and
closure. AGL can proceed with Project Integration Management through six ways.
The first stage is to produce a Project Charter that would contain initiation of the project
idea. The charter is significant, as without it project manager cannot commence with the project.
It follows the project management plan that contains step-by-step procedures of the proposed
project. The participants of this project should consider the plan as the roadmap for the proposed
Procurement management plan for AGL
Procurement process Department Time allocation for the
process
Initiating the procurement
request through AGL
procurement department
managers
Procurement department 10-15 days
Developing of technical
advancements on Gas
production, quality
requirements and
identification of constraints
Technical department 20 days

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Procurement process for providing a new way to the company's Gas supplier for
transition from traditional approaches
Technical process
Implementation to extract the
natural gas from the
environment
Technical department 20 days
Preparation and arrangements
to transport the raw
extracting natural Gas to the
collecting point
Technical department 15 days
Processing of the refinery of
the extracting natural Gas
Technical department 20 days
Request approval by
procurement department
Procurement department 1 days
Purchasing authority Marketing department Of
AGL company
10 days
Proposal review of the AGL
procurement plan
Operations management
department of AGL
2 days
Contacting the AGL
management responsibility
Procurement department 5 days
Table 1: Procurement management plan for AGL
(Source: AGL, 2018)

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Responsibility and roles in the procure management
The roles and responsibility in the procure management of AGL is to organize an issue
identification committee for providing transparent information to all of the company's
stakeholders (AGL, 2018). The role and responsibility also determines the concernments of the
procure management department of the company for the carbon constrained future.
Identifications of procurement needs
Identification of the procurement needs reflects the review of the Australian renewable
fund. It can be considered that the procurement process of the AGL Company will be required
for sustainability development of the future resources. It can be further stated that, concernments
on extracting the natural gas will allow the gas suppliers for transition from traditional
approaches (De Silva, Simons & Stevens, 2016).
It will also bring an innovative approach in the AGL Company’s operations management.
The extraction of natural gas and concernment of using renewable energy source will assist the
company for unlocking the investment for huge amount renewable energy generation.
The procurement needs will also highlight the requirements for conducting the retailer led
trial of the AGTL Company. It can be observed that, the using of renewable energy help the
company to thrive in Australian fuel industry. The procurement process of extracting the natural
gas will also reduce the total investment business capital of the company.
The procurement process or the project integration management will also direct the
company to apply the emerging technology in the technical operations of the company. The
procurement process arranged for using the renewable energy sources regarding emerging
technologies to reduce the electricity augmentation costs of the company.

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On the other's hand company also approached resource management plan review in the
procure management plan, For this reason AGL company arranged some training session for the
company employees to gain the knowledge regarding resource management.
Vendor process of AGL Company
In the vendor process of project integration management AGL Company will also
concern to describing the process which the company vendors or suppliers will use for
sustainable development. Timesheet approval from the procure management end is also a vital,
activity in the procurement management plan. It also includes the invoice processing, status
reporting, contact renegotiation, status reporting and the last of all the scope change requests.
Conclusion
The report has identified the issues that are responsible for creating issues in the
operation management of AGL. It has also evaluated the Gas Market of Australia, to understand
the role of gas providers in Australian Gas market. The report has indicated the upcoming trends
in the Natural Gas market of Australia. In a circumstance where the oil price is reaching a higher,
level every day. This has expanded the chance of market-capturing for AGL.
This company has already applied many procedures of sustainable procurement. It can expect to
reap the result of this sustainable approach within a few years. Adoption of management
integration would also help the company is creating its space in Australia. The report has shown
how AGL can apply Six Sigma to eradicate the issues in its supply chain management.

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Australia is on the verge of taking a leading position in International LNG market. It has
provided a golden opportunity in front of AGL. The company should master the idea of
sustainable supply chain management to make a leading position in the industry.
Reference List
Aemc.gov.au, (2018). About Us. AEMC. Retrieved from https://www.aemc.gov.au/energy-
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AGL (2018). AGL Essentials.Just low rates. Retrieved from https://www.agl.com.au/. Retrieved
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Banks, F. E. (2017). The political economy of natural gas. Abingdon: Routledge. Retrieved from
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Eex.gov.au, (2018). The Energy Supply Chain. Energy Exchange. Retrieved from
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energy-pricing/the-energy-supply-chain. Retrieved on 2 September 2018.

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Fleming, D. A., & Measham, T. G. (2015). Local economic impacts of an unconventional energy
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