The interaction between non-technical and technical risks in upstream natural gas project schedule overruns: Evidence from Australia

Abstract Upstream natural gas projects are extremely complex and encounter a range of non-technical risks (NTRs) and technical risks (TRs) that frequently get in the way of timely project delivery. Despite their economic and social importance and the massive investments underpinning them, these projects are frequently plagued by significant schedule overruns. Risks are considered during project planning, but the interactions between NTRs and TRs on project performance remain largely anecdotal and theoretically underdeveloped. In this paper, we apply structural equation modelling to data collected from natural gas projects in Australia to empirically investigate the relationships between NTRs, TRs, and project schedule delay. The results indicate that NTRs are much more significant than TRs in influencing delays, and have a stronger influence on TRs, thereby exacerbating delays. The moderation effect of project complexity related to project size is also found to have a significant effect on the relationship between risks and delays. These findings provide insight on the direct, indirect, and mediating effects of risks that decision-makers should take into consideration when assessing project risks. By shedding a useful amount of new light on these interactions and complexities, this contribution will deepen the theoretical understanding of these phenomena and help practitioners to improve project schedule performance within the extractive industries.