Natural gas pipelines: firing up Australia
Owner of the Dampier to Bunbury Natural Gas Pipeline (DBNGP), Dampier Bunbury Pipeline (DBP), completed its $660 million Stage 5A expansion of the pipeline in April, while also announcing a Stage 5B expansion.
Stage 5B will involve a further 440 km of looping, which, when completed will result in the DBNGP system being more than 75 per cent duplicated. Construction of the expansion project is planned to begin in 2009, with pipelaying tenders under review at the time of print.
In May, DBP entered into a conditional agreement to lease a portion of the capacity in Epic Energy’s Burrup Extension Pipeline in order to supplement the capacity of the DBNGP and reduce the total costs of the Stage 5B expansion project. DBP said that this approach allows the company to defer any requirement to expand the capacity of the section of the DBNGP that runs through the Burrup Peninsula.
DBP said that it was encouraged by an increased level of interest being shown by upstream producers in new domestic gas developments, creating confidence that further pipeline expansion will be required by 2011-12 when a number of these developments are targeted for completion.
One such development is Apache Energy’s Reindeer/Devil Creek Gas Project. Sanctioned in April this year, the project involves the development of the Reindeer Gas Field, located approximately 80 km offshore from the Port of Dampier. The field is to be linked to a proposed Devil Creek Gas Plant via a 105km pipeline. An onshore single 3-phase 16 inch raw gas sales pipeline will link to the shore crossing and tie-in to the DBNGP. Clough has been awarded the engineering, procurement and construction contract for the Devil Creek Gas Plant and the installation of the gas field platform and pipeline. First gas is targeted by the end of 2010.
Also planned to link into the Devil Creek facility, is Apache’s Julimar Gas Discovery, located in the North West Shelf area southwest of the Reindeer Gas Field. The project and associated 100 km pipeline is expected to be sanctioned in the fourth quarter of this year.
The importance of new gas field developments was highlighted by a pipeline rupture on Varanus Island in June, which supplies 30 per cent of Western Australia’s gas. Government and industry rallied to ensure supplies were back on course with Clough appointed to assist Apache with repairs to the Varanus Island facility and the DBNGP increasing its shipments of gas from the North West Shelf joint venture facilities on the Burrup Peninsula by more than 25 per cent to counter shortages. Production from the John Brookes field, located approximately 116 km west of Dampier, resumed two months after the incident, while full production is expected to be restored by the end of the year.
In addition, the recently elected Western Australian Government has said that it plans to construct a $225 million natural gas pipeline from Bunbury to Albany. The proposed South West Pipeline will measure 200 mm in diameter and is expected to carry around 50-100 TJ/d of gas. The development will be conducted as a joint venture between a government-owned utility and a private sector proponent. Western Australian Premier Colin Barnett said that the gas pipeline grid could enable the installation of gas turbines in the region to support the electricity grid in times of high demand, taking pressure off the electricity transmission system.
In May, AJ Lucas began construction on APA Group’s 280 km Bonaparte Gas Pipeline. The $170 million high pressure gas transmission pipeline will run from the onshore gas plant at Wadeye to the existing Amadeus Basin to Darwin Pipeline. First gas supply to the Northern Territory’s Power and Water Corporation is expected in January 2009.
Gas from Eni Australia’s Blacktip Gas Field development, located in the offshore Bonaparte Basin, is planned to be piped to a processing facility plant at Wadeye where it will then be transported to the Amadeus Basin to Darwin Pipeline via the Bonaparte pipeline. Initial works such as the trenching and pipepull contracts have been awarded to Van Oord for the gas field’s development.
In Queensland, Epic Energy awarded Nacap Australia the construction contract for the 180 km Queensland to South Australia/New South Wales (QSN) Link, which will extend Epic’s South West Queensland Pipeline (SWQP) and has been designed to transport up to 250TJ/d when fully compressed. The pipeline completes the final link between the Queensland, South Australia and New South Wales gas markets. The project also includes compression and a start of line station at Wallumbilla. At the time of print, 113 km of the DN 400 Grade X70, Class 900 pipeline had been welded out, with construction expected to be complete by December 2008.
Epic is also currently undertaking a front-end engineering and design (FEED) study into the Stage 3 expansion of the SWQP. The FEED study will investigate the feasibility of further expanding the SWQP through either full compression or by looping, following significant interest from potential shippers and is expected to be completed by the end of this year. Epic has also commenced the process of obtaining the necessary approvals to construct the Stage 3 expansion and has said it will investigate potential financing options.
Jemena has announced that it will expand the capacity of the Queensland Gas Pipeline via compression at Rolleston and Banana and looping between Moura and Bell Creek.
Also in Queensland, Arrow Energy and ERM Power executed a Partnership Agreement to jointly develop the estimated $545 million, 450 MW Braemar 2 Power Station and 107 km pipeline, located in the south of the state. In March, Delco was contracted to construct the 16 inch, Class 900 gas pipeline with the project scheduled for completion by January 2009.
Arrow is also continuing to develop the 440 km Central Queensland Gas Pipeline (CQGP) with joint venture partner AGL Energy. The $475 million pipeline will form a key link in delivering coal seam gas (CSG) from the Moranbah Gas Processing plant to Gladstone where it will connect into the pipeline grid. In September, the Queensland Government awarded joint venture partners a 45 year point-to-point gas pipeline licence PPL 121, for the development of the CQGP.
In August, Arrow and AGL confirmed the completion of the $205 million sale of the 392 km North Queensland Gas Pipeline to Victorian Funds Management Corporation.
May saw the completion of construction activities at APA’s Brooklyn to Lara looping project in Victoria. The $62.5 million pipeline, constructed by AJ Lucas, comprised 58 km of 500 mm diameter pipe.
Offshore Victoria, Esso Australia’s Kipper Gas Project continued progress with the fabrication of the pipeline and umbilical tubes complete. Gas is to be piped to shore and processed via Esso and BHP Billiton’s infrastructure and processing facilities in Gippsland. First gas is expected in 2011.
The Basker Manta Gummy Gas Project received an increase in 2P reserves in August, justifying a larger facility for the offshore processing of gas. The development involves drilling of gas wells into the Manta and Gummy fields, with installation of a gas pipeline to join the Eastern Gas Pipeline and a new Floating Production Storage and Offtake (FPSO) vessel to replace the current Crystal Ocean FPSO.
In addition, Nexus Energy has raised $143 million for the Longtom Gas Field Development, located about 35 km off the Victorian coastal town of Orbost. A pipeline licence for the project was secured in May, with the Aussie 1 pipe-lay barge scheduled for mobilisation to the field in November. The 19 km pipeline will connect to Santos’ Patricia Baleen Pipeline for gas delivery to the Patricia Baleen facilities onshore.
This year, APA announced a number of expansions to its pipelines including the Goldfields Gas Pipeline, Carpenteria Gas Pipeline and the Moomba to Sydney Pipeline (MSP). The expansion of the Goldfields Gas Pipeline will involve two compressor stations being built at Wyloo West and Ned’s Creek, which will increase the capacity of the pipe by 20 per cent. At the Carpenteria pipeline, an additional compressor station at Davenport Downs will be built to increase the pipeline’s capacity by 15 per cent. Demand from the NewGen Power Station at Uranquinty will also see a new compressor at Culcairn on the InterConnect branch line off the MSP, with commissioning due in mid-2008 to increase its capacity by approximately 20 per cent. The expansion program is set to cost in the order of $100 million.
Coal seam gas: in the pipeline for the east coast
In July, APA entered into a Heads of Agreement (HoA) with Eastern Star Gas (ESG) to investigate arrangements to transport ESG’s CSG to south eastern Australia gas markets from the Gunnedah Basin CSG Project. The HoA will involve the construction of a new pipeline to connect the Gunnedah Basin project into APA’s Central West Pipeline for delivery to the Narrabri area into the New South Wales gas market.
The agreement followed APA’s purchase of the Central Ranges Gas Pipeline and associated distribution network, which runs between Dubbo to Tamworth, meaning that APA’s system was located approximately 100 km from ESG’s project. APA acquired the pipeline through the purchase of 100 per cent of the shares in Country Pipelines for $23.5 million. The 294 km Central Ranges pipeline connects to the Central West Pipeline at Dubbo.
Metgasco’s 145 km high pressure Casino to Ipswich Pipeline was declared a major project by the New South Wales Minister for Planning. Metgasco is developing the interstate gas transmission pipeline to supply gas from its CSG project in the Clarence Moreton Basin to the South East Queensland energy market. Environmental Assessment and development approval for the Casino to Ipswich pipeline was undertaken in March and construction for the pipeline is expected to commence in 2010 and finish in 2011.
Metgasco also entered into a Memorandum of Understanding (MoU) with BP Australia to conduct feasibility studies for the extension of the pipeline to BP’s refinery facilities at the Port of Brisbane.
The proposed 820 km Queensland Hunter Gas Pipeline (QHGP), set to deliver CSG collected in southern central Queensland fields to Newcastle in New South Wales, progressed well throughout the year. The project’s proponent, also named Queensland Hunter Gas Pipeline, awarded a FEED contract to URS in May. In June, an agreement was reached to transport 50 PJ/a of gas for 20 years for a 400 - 600 MW power station proposed by Queensland Gas Company (QGC), ANZ Infrastructure Services and Toyota Tsusho Corporation. This equates to one-third of the pipeline’s ultimate capacity and involves the construction of a 120 km offshoot pipeline to connect to QGC’s Berwyndale South Gas Field. Construction of the pipeline is anticipated to start late next year with first gas expected in the first quarter of 2011.
In addition, QGC and AGL reached an agreement to develop a 113 km long, 400 mm diameter high pressure steel pipeline to transport gas from the planned Condamine Power Station, located east of Miles, to the Wallumbilla gas hub. The Berwyndale to Wallumbilla Pipeline would provide increased capacity for the transport of QGC’s gas into western Queensland and, ultimately, the southern states. In August, Diversified Construction Corporation and WorleyParsons executed a Professional Services Agreement encompassing engineering, design and construction planning for the pipeline.
Earlier in the year, Origin Energy announced its expansion of the Spring Gully CSG Field in Queensland’s Surat Basin, involving the construction of a $90 million, 200 km Wallumbilla to Darling Downs Pipeline to run between the gas hub at Wallumbilla to the Talinga field and the proposed Darling Downs Power Station. Construction is expected to commence this year.
Origin said that construction activities at the Darling Downs Power Station site are progressing with excavation and foundation works for major equipment items nearing completion. The power station will have a capacity of 630 MW and will take advantage of Origin’s CSG reserves predominantly in the area around Roma and Chinchilla.
In June, Icon Energy entered into a non-binding MoU with Babcock & Brown (BNB), for the sale of CSG from Icon’s ATP 626 tenement, located in Queensland’s Surat Basin. The MoU includes the construction of a 100 km pipeline from the company’s ATP 626 tenement to an appropriate distribution point. The Gas Supply Agreement foresees the supply of a minimum of 10 PJ/a of gas to BNB from 2012 for a period of fifteen years, with an option for BNB to purchase additional volumes of gas as produced.
Australia: gushing over LNG
Over the year, Woodside Petroleum has secured a number of contractors for its Pluto Gas Project, located near Karratha in Western Australia. The project involves a 4.3 MMt/a LNG production train at the Burrup LNG Park to be connected by a 180 km, 36 inch offshore pipeline from a platform in 85 m of water.
WorleyParsons successfully completed FEED for the project early in the year, while Clough and Interbeton were awarded a contract to construct a 300 m long LNG jetty berth in April; Foster Wheeler Energy was awarded an engineering and materials supply contract for two gas turbine exhaust waste heat recovery units for the processing train; and, a joint venture between Technip, Chiyoda and Fluor was awarded a contract for the preparation of a basis of design for a proposed second LNG train for the project. At the time of print, Woodside was continuing discussions with potential contractors about the engineering, procurement and construction management contract.
The North West Shelf Venture project began operation and production of LNG for export from the fifth LNG processing train in September.
J Ray McDermott was contracted to construct the North Rankin B platform substructure and piles earlier in the year. The platform will be connected by a 100m bridge to the existing North Rankin A platform. Upon completion, both platforms will be operated as a single integrated facility.
The Angel Gas Field achieved mechanical completion in August. The development included the North West Shelf Venture’s third fixed platform that will be remotely operated, three wells, and a 49 km pipeline to join the existing offshore trunkline to shore.
In September Chevron extended the FEED contract for its Gorgon LNG Development, being undertaken by the Kellogg joint venture of KBR, JGC Corporation, Clough Projects Australia and Hatch Associates Group, to incorporate a third 5 MMt/a LNG train to be developed at the same time as the original two.
In addition, Chevron announced in August that it plans to incorporate a 300TJ/d gas processing facility located on the central-east coast of Barrow Island as part of the foundation project. Previously the company had said that this would be considered in the future.
The Gorgon project is located approximately 130 km off the northwest coast of Western Australia and tenders have been requested from a number of suppliers including provision for pipeline and cable supply as the project moves toward a final investment decision.
In May, then Western Australia premier Alan Carpenter opened the Broome power station, marking the completion of Energy Development’s West Kimberley Power Project. The project involved the construction of five new power stations in Broome, Derby, Fitzroy Crossing, Halls Creek and Looma to supply Western Power’s electricity needs in the West Kimberley for 20 years.
Inpex and joint venture partner Total E&P have been considering whether to develop a facility for their $12 billion Ichthys LNG Project in Western Australia or the Northern Territory, located in the offshore Browse Basin.
The companies are considering developing the proposed 8 MMt/a LNG facility either in Darwin or the Maret Islands. The two sites would both require long pipelines from the field, with Darwin located 850 km from Ichthys, and the Maret Islands located 190 km away.
In February, the Northern Territory Chief Minister Paul Henderson signed a Project Facilitation Agreement with Inpex, demonstrating that the option to bring gas from the Ichthys gas field to Darwin was being given serious consideration. May saw a notice of intent lodged with the Northern Territory Government and environmental referrals with the Australian Government regarding the Development.
In addition, Inpex has said that it would transport gas 400 km from its Masela block in the Timor Sea, via subsea pipelines to an LNG Plant in Darwin. The announcement followed a doubling of reserves estimates for the Masela block to more than 10 Tcf, which make it the largest liquid hydrocarbon reserve found in Australia since the discovery of the Bass Strait oil fields, boosting plans to develop an LNG terminal.
In August, Karoon Gas announced it was ready to commence a Browse Basin drilling program in late 2008 and exploration and appraisal drilling in early 2009, with a view to discover 7 Tcf of gas for the sanction of a possible LNG project and associated pipeline. The joint venture project with ConocoPhillips would include the construction of a 1,000 km long natural gas pipeline running through the Timor Sea to connect the Browse Basin to an onshore LNG plant.
Coal seam gas-fired LNG developments
Earlier in the year, QGC signed an agreement to establish an alliance with global energy company BG Group to co-operate in exploration and the development of the estimated $12-14 billion Queensland Curtis LNG Project, which includes a 380 km pipeline from QGC’s Surat Basin tenements to a port site and construction of a world scale LNG plant.
The Queensland Government has awarded the Curtis LNG Project ‘significant project’ status and QGC has signed significant Native Title agreements with the Barunggam people that concerned the land on which Curtis LNG Project would be developed. In July, Bechtel Oil, Gas and Chemicals was secured as project contractor and the FEED study commenced immediately. A seamless transition into procurement and construction is planned to follow a final investment decision on the project, scheduled for early 2010.
In addition, the boards of QGC and Sunshine Gas reached a unanimous agreement regarding the takeover of Sunshine Gas for more than $830 million. QGC said that the merger will provide additional CSG reserves for participation in the Queensland Curtis LNG Project with BG Group.
Earlier, Sunshine Gas had signed a Heads of Agreement with Sojitz Corporation to jointly develop a 500,000t/a LNG plant, which would be scalable and supplied from Sunshine’s Lacerta CSG Project near Gladstone. The plant was to be located at the Fisherman’s Landing site at the port of Gladstone, situated 5 km from the Queensland Gas Pipeline. A pipeline survey licence for the required 5 km feed gas pipeline has been lodged with the Department of Mines and Energy and has been granted ‘environmental authority.’
Santos and Petronas have agreed to jointly develop the Gladstone LNG Project (GLNG). The project comprises a 3-4 MMt/a LNG processing train and associated infrastructure, including the construction of a 450 km pipeline linking a compressor station to the liquefaction plant.
The projected total cost of the project is between $5-7 billion and will sell LNG to Petronas’ customer base in Japan, Korea and Taiwan.
In April, Santos awarded two parallel FEED contracts to Foster Wheeler and Bechtel to each undertake a six month study of the project. A decision to move to a formal FEED process is anticipated by the end of this year or early next year, with a Final Investment Decision by the end of 2009, and first LNG cargos early in 2014.
LNG Ltd has proposed the Gladstone ‘Fisherman’s Landing’ LNG Project, which will have an initial design capacity of 1.5MMt/a of LNG with the provision for expansion of up to 3 MMt/a, subject to the availability of additional gas. The plant will source gas from Arrow Energy’s Moranbah Gas Processing plant via Arrow and AGL Energy’s proposed Central Queensland Gas Pipeline (CQGP). The pipeline is set to be approximately 440km in length.
In addition to proposing the development of the CQGP, Arrow Energy is investigating an option for developing a 400–500 km pipeline from its Surat Basin tenements to Gladstone, as part of its CSG to LNG Project with Shell. The pipeline would require an investment of approximately $500 million.
After much anticipation, Origin Energy selected ConocoPhillips to acquire a 50 per cent share in a CSG to LNG joint venture for approximately $9.6 billion. The joint venture will involve the development of a four train LNG project utilising Origin’s Queensland CSG reserves and resources. The agreement followed BG Group’s attempt to take over Origin. BG has subsequently withdrawn its takeover bid.
Energy World Corporation (EWC) has plans to establish 1-5 MMt/a LNG plants in Queensland at Abbot Point and Hay Point to exploit gas reserves located in ATP 549 and the Gilmore Gas Field in PL 65 in the Eromanga Basin.
EWC said a pipeline will be built to connect Abbot and Hay Points to the Bowen Basin and eventually through to the Cooper Basin. A spur gas pipeline can also be added to collect gas from the Surat Basin. The target date for LNG productions from the facilities is 2012 or earlier if the required licences and permits can be obtained on a priority basis.
Following the flurry of proposed developments in Queensland, the State Government declared a 90 km infrastructure corridor from Stanwell to Gladstone a State Development Area, enabling construction of major water, gas and slurry pipelines. The proposed Stanwell-Gladstone Infrastructure Corridor will be typically 100 m wide, but up to 500 m across in sections where construction is complex.
Across the Torres Strait, the PNG LNG Project has moved forward throughout the year with joint venture partners in the project including ExxonMobil and Oil Search formally signing and executing a joint operating agreement in March. The project will see gas transported to an LNG plant near Port Moresby via a large diameter pipeline.
In April, a fiscal terms agreement was reached concerning the project. Shortly after, the PNG LNG joint venture signed a gas sales agreement with the PNG Government, with the project formally entering into FEED. FEED activities will include detailed work on optimising facilities design, landowner, environmental and regulatory affairs, and the selection of an EPC contractor. The Final Investment Decision is scheduled for the fourth quarter of 2009 with first LNG cargo expected at the end of 2013.
Pipelines: the good oil
Diversified Construction Corporation completed construction at Santos’ 273 km Jackson to Moomba Pipeline in July. The 8 inch pipeline will transport oil from the Jackson plant to the Moomba plant in the Cooper Basin.
In April, Santos announced that it would not re-open the Moonie to Brisbane oil pipeline (MBP), which had been closed since July 2007 due a pipeline leak that occurred in the Brisbane suburb of Algester.
Water pipelines make a splash
A considerable Federal budget allocation resulted in a boost in proposed water pipelines, following the Australian Government’s announcement that it would invest $254.8 million in more efficient water infrastructure, and refurbishment to older pipes and water systems, as part of its $12.9 billion Water for the Future plan.
In the first stage, the Government said it will commit $104.5 million to 20 projects outlined in Labor’s 2007 election commitments – including $20 million contribution to Queensland’s proposed Gladstone to Fitzroy Pipeline. As part of the plan, the Government has allocated $35 million to the Water Efficiency– Western Australia measure that will contribute to the Harvey Water Piping Project, which is set to save Western Australia 17 billion litres of water.
The construction of the Gladstone to Fitzroy Pipeline Project was awarded to a joint venture between Clough, Diversified Construction Corporation, and United Infrastructure. The 115 km pipeline will run between the Fitzroy River and Gladstone via the proposed Stanwell-Gladstone infrastructure corridor. The Australian Government funding together with the $48 million already committed by the Queensland Government will contribute to the overall cost of the project that is expected to total some $345 million.
March saw Diversified Construction Corporation selected as preferred proponent for the $200 million Wivenhoe Cressbrook Pipeline Project, located in Esk Shire. The project involves the design and construction of a 27 megalitres per day water pump station and 37 km of buried pipeline between Wivenhoe Dam and Cressbrook Dam, and is part of the South East Queensland Water Grid.
The Queensland Government also said it will build a $187 million 40 km pipeline to pump water to Toowoomba from the Wivenhoe Dam. Construction of the pipeline will be completed by an alliance between Clough, Diversified Construction Corporation and Maunsell.
The Queensland Government and SunWater committed $3 million for a feasibility study into a 130 km water pipeline from Burdekin River to Bowen. If approved, the pipeline will pipe more than 60,000 ML of water into the Bowen region from the Burdekin Falls River.
Stage 1B of the Western Corridor Recycled Water (WCRW) Pipeline was completed in August. Purified water from the Bundamba Advanced Water Treatment Plant is now being pumped to the Swanbank Power Station near Ipswich, and the Tarong Power Station, located 195 km northwest of Brisbane. A workforce of 1,000 people continues to complete the final stage of the WCRW project focused on the Luggage Point and Gibson Island Advanced Water Treatment plants and the final 20 per cent of the pipeline to connect to corridor.
The Southern Regional Water Pipeline completed construction in August, with an official ceremony with Queensland Premier Anna Bligh signing and witnessing placement of the final air valve in the pipe at Oxenford on the Gold Coast. The $901 million project is a potable water pipeline that links the Mt Crosby Treatment Plant to Molendinar on the Gold Coast and includes five pump stations, four reservoirs and 11 tunnels. The project was constructed by the Southern Regional Water Pipeline Alliance, which consisted of Abigroup, McConnell Dowell and KBR.
In Victoria, John Holland Group has begun construction of the 70 km Sugarloaf Pipeline, which will connect the Goulburn River north of Yea to the Sugarloaf Reservoir in Melbourne, despite numerous obstacles affecting the project throughout the year.
In February, Melbourne Water released a Project Impact Assessment (PIA) report for the Sugarloaf Pipeline, which provided an integrated assessment of the potential impacts of the preferred pipeline corridor. The PIA included environmental, social, cultural and economic impacts, and recommended ways to avoid or minimise those impacts.
The project was postponed from April to until June due to the State and Federal approval process, however, Melbourne Water stressed that the project was still being developed in its original time-frame for delivery in the first half of 2010. In August, Victorian Planning Minister Justin Madden endorsed the preferred corridor for the pipeline.
September saw Federal Environment Minister Peter Garrett grant conditional environmental approval, which was met with a hostile reception from landholders and protesters.
Supply Systems 1, 2, 5 and 7 of the Wimmera Mallee Pipeline Project (WMPP) were completed during the year. The pipeline network is to be used to replace around 18,000 km of open irrigation channels covering an area of around 2.5 million hectares in western Victoria. Staged construction of the project, through a number of contracts, will be completed by early 2010. Mitchell Water is continuing construction at Supply Systems 3 and 4, while proponent Grampians Wimmera Mallee Water has commenced planning and consultation for Supply System 6. Mitchell Water has constructed all supply systems on the project except Supply System 5, which was completed by Nacap Australia.
In April, Goulburn-Murray Water awarded a $179 million irrigation infrastructure upgrade contract that will see the development of as much as 170 km of pipeline infrastructure. The contract was won by FutureFlow, a consortium comprised of Transfield Services, Comdain Civil Constructions and Sinclair Knight Merz. FutureFlow will undertake modernisation works including pipeline construction, installation of automated channel regulators, channel lining, installation of new meters and channel modelling. Completion is expected by the end of 2009.
Water flowed through the 87 km Ballarat leg of the Goldfields Superpipe for the first time in May, marking the completion of the $180 million project.
In addition, a $50 million project to construct two pipelines supplying potable water to Lower Lakes’ communities was presented to the South Australian Parliament’s Public Works Committee. South Australian Minister for Water Security Karlene Maywald said that approximately 120 km of pipeline would be built, improving water security and consistent water quality for communities currently sourcing water from the Lower Lakes. First water will be delivered to communities by early 2009.
Liquid metal
The Southdown Magnetite & Kemaman Pellet Project and associated slurry pipeline, located 90 km northeast of Albany, received the Western Australian Environmental Protection Authority’s project approval. Under the proposal, the magnetite concentrate will be pumped as slurry, approximately 100 km to a concentrate storage facility at the port of Albany before being loaded onto vessels and shipped to an iron ore pellet plant to be located in Kemaman Malaysia. Filtered water recovered from the slurry will be pumped back to the mine site for re-use in the concentrator via a return water pipeline buried beside the slurry pipeline.
In Queensland, the route selection for the Gladstone Nickel Slurry and Water Pipeline was finalised by Gladstone Pacific Nickel in June. The company said that it will use the upgraded Government Pipeline Corridor from Yarwun to its Residue Storage Facility. This means that the pipeline will follow a similar route to that used by Rio Tinto for its Yarwun Alumina Refinery pipeline.
Pipelines: politics and policy
In July, Federal minister for Resources and Energy Martin Ferguson announced the commencement of the National Gas Law (NGL), a major reform for that will regulate gas pipeline services throughout the nation.
“The NGL brings natural gas pipeline regulation under the national energy market institutions alongside electricity network regulation. This means that the Australian Energy Regulator (AER) is now the national regulator for gas and electricity networks and that the Australian Energy Market Commission is responsible for developing rules made under both the national gas and electricity laws. This will ensure consistent regulatory decision making across the energy sector,” said Mr Ferguson.
Another major talking point of the year was the Emissions Trading Scheme (ETS). The Australian Pipeline Industry Association (APIA) warned that the gas industry could be severely disadvantaged by an ETS if the transportation companies were to be prevented from recouping costs. In its submission on Ross Garnaut’s discussion paper, APIA said that most gas transmission companies provide transportation services under long-term contracts and if an ETS is introduced during the terms of these contracts, the companies will face substantial costs if those costs cannot be passed through.
In July, the Rudd government released a Green Paper on the Carbon Pollution Reduction Scheme (CPRS), containing proposals for a new plan to tackle climate change by reducing carbon pollution.
In September, The Australian LNG industry appealed to the Australian Government for recognition of their unique position as “clean global contributors” and their need for support under the ETS. Woodside Petroleum said that the Australian Government’s Green Paper threatens the competitiveness of Australian LNG as operational costs are predicted to double. Prime Minister Kevin Rudd assured the industry that the proposed ETS will not adversely affect Australia’s emerging LNG industry.
Looking forward
The number of pipeline projects that are under construction or proposed for future development bodes well for the future of the pipeline industry. Particularly, the number of proposed LNG projects in Queensland will see increased pipeline construction in the state.
Projects under construction such as the QSN Link and proposed projects such as the Queensland Hunter Gas Pipeline will connect Queensland’s gas fields to the south eastern states, which will see a shoring up of the gas markets on the east coast. In the west, the development of offshore gas fields will aid the increase of gas supply.
Also, the Government’s launch of a Global Carbon Capture and Storage Research Initiative will investigate large scale sequestration and its potential to demonstrate the technical and commercial feasibility of carbon capture and storage, including the unique challenges that transportation of carbon dioxide presents.
