Coal seam gas (CSG) production has increased significantly in the past seven years, with its share of total Australian gas production increasing from 2 per cent in 2002–03 to 9 per cent in 2008–09.

This increase is set to not only be used as feedstock for several LNG projects planned in Gladstone, Queensland (see page 116), but also to boost domestic gas supply as Australia transitions into a cleaner energy economy. As such, there are many opportunities for the construction of new pipelines, and for the expansion of existing infrastructure on Australia’s east coast.

Queensland

South West Queensland Pipeline Expansion – QSN 3

Nacap is set to start construction of Epic Energy’s Stage 3 expansion of the South West Queensland Pipeline (SWQP), dubbed QSN 3. The project will involve 938 km of looping on the entire SWQP mainline and the QSN Link. The new line will have a diameter of 457 mm and will operate at a capacity of approximately 380 TJ/d, providing CSG companies in Queensland with increased options to commercialise their CSG reserves as the pipeline links Queensland’s CSG fields with markets in Adelaide, New South Wales and northern Queensland via links with the Moomba to Adelaide, Moomba to Sydney and Carpentaria pipelines respectively.

At the time of writing, design of the looping pipeline was complete, with design of the new Wallumbilla Compressor Station approximately 60 per cent complete.

Manufacture of the 938 km of line pipe is over 60 per cent complete and the delivery of 2 Layer FBE coated API 5L X70 pipe has started to stockpiles along the pipeline route. Epic has said that all the

prime contracts are in place and activities associated with the detailed design and preparation phase are almost complete. The Wallumbilla compressor units have been ordered and the contract for compressor station construction is soon to be awarded.

Nacap will commence construction in July. The pipeline construction will include two horizontal directional drills for crossings. The project is expected to be completed by January 2012.

Central Queensland Gas Pipeline

Arrow Energy and AGL Energy are looking at building a new 420 km CSG pipeline from Moranbah to Gladstone, following the success of the North Queensland Gas Pipeline, which runs from Moranbah to Townsville. The X70 pipeline will connect the national pipeline grid at Gladstone.

The Queensland Government has issued an initial advice statement regarding the proposed pipeline and significant project status has been granted. Details regarding the capacity of the pipeline, sources of gas and potential gas buyers are yet to be determined. The pipeline will have metering stations at Gladstone City Gate and Fisherman’s Landing.

Arrow has said that a takeover offer from a joint venture between Shell and PetroChina must be resolved before a final decision on the project is made. In March 2010, Arrow recommended its shareholders accept the takeover offer.

Icon Energy

Icon Energy recently completed a feasibility study to link its Lydia CSG Field to the existing Queensland gas market.

Icon and Stanwell Corporation had previously signed an agreement to jointly develop a 110 km pipeline. The agreement would see Stanwell become the foundation customer for the project, purchasing up to 225 PJ of gas over a 15-year period.

In addition, April 2010 saw Icon sign a Memorandum of Understanding (MoU) with Sino Gas to provide 40 MMt of LNG to China, with shipments to commence in 2014. As such, the feasibility study provides a pipeline option for the transportation of gas from its CSG tenements to a suitable port for liquefaction and export.

Bow Energy

Bow Energy has said that it is moving to the next phase for a proposed gas pipeline from its Bowen Basin tenements to Gladstone.

The company has completed preparatory work for a proposed 257 km pipeline, which will lead from its Bowen Basin tenements to Gladstone. The company now plans to undertake an environmental impact study for the project.

“We have a survey licence and have had consultants going out to survey the land and look at the optimum route,” said a company spokesperson. “It will go from Blackwater through to Rockhampton, and then follow the existing corridor that the Queensland Government has from Rockhampton down to Gladstone.”

A final investment decision is expected on the pipeline by of the end of 2012. The Bow spokesperson said “What we’re trying to achieve is gas into Gladstone by late 2014 or early 2015, so [the pipeline] will be based on what volumes of gas we would execute – we would look towards a pipeline completion date around that time.”

The company expects that the pipeline will be approximately 24 inches in diameter, with a capacity of 100 PJ/a.

Previously, Bow has investigated the feasibility of constructing an approximately 50 km pipeline from its Blackwater and Don Juan CSG fields to a point along Arrow Energy and AGL Energy’s proposed Central Queensland Gas Pipeline. The company has also looked into the development of a 140 km pipeline joining the Blackwater field to the Queensland Gas Pipeline at Moura.

Blue Energy

Blue Energy has been awarded a pipeline survey licence – PSL 49 – and is investigating possible pipeline routes from its Galilee Basin and Moranbah permits to potential export locations on the east coast of Queensland between Abbot Point and Gladstone.

The company has said that no timing has been set on the construction of the pipeline, and the exact route will depend on gas reserves found in the company’s permits.

New South Wales

Lions Way

Metgasco has proposed to construct the 140 km Lions Way Pipeline from its Clarence Moreton Basin CSG tenements, located near Casino, New South Wales, to Ipswich in Queensland, where it will supply gas to Metgasco’s Clarence Moreton Basin partner, CS Energy.

The pipeline will traverse the Border Ranges National Park, and the company expects to lodge environmental assessment reports with regulatory authorities for the pipeline soon.

Metgasco has also entered into a MoU with BP Australia to conduct feasibility studies for the extension of a pipeline to BP’s refinery facilities at the Port of Brisbane. The MoU covers the supply of CSG, in excess of 15 PJ/a from Metgasco’s Clarence Moreton Basin operations to BP.

Construction on the Lions Way Pipeline is expected to begin in 2012.

Liddell Gas Pipeline

Macquarie Generation has proposed the 75 km Liddell Gas Pipeline, which will be located north of Sydney, New South Wales. The pipeline will transport either CSG or coal mine methane from a number of nearby coal mines in the Hunter Valley to the Liddell Power Station. Macquarie is awaiting a decision on the product to be transported from the coal mine operators.

The pipeline is expected to be no more than 500 mm in diameter, and will be constructed out of either polyurethane or fibreglass. The project will likely involve two separate pipelines to carry pre-mine drainage and post-mine drainage, and there will be provision for looping.

No timetable has been set at this stage for the start of construction.

Eastern Star Gas

Eastern Star Gas (ESG) has completed preliminary constraints studies to select preferred pipeline routes for a number of different development options for its Narrabri CSG Field in New South Wales.

The company has recently signed an MoU with ERM Power for the supply of gas to a 600 MW power station approved for development in Wellington. ESG said that it expects to finalise a full gas supply agreement for the Wellington Power Station by the end of 2010 so that final project commitments can be made in mid-2011. The company is working with ERM regarding the construction of a pipeline to the power station site.

In addition, ESG has a Heads of Agreement with APA Group to facilitate the development of necessary infrastructure for the commercialisation of the Narrabri field in a staged manner. The company said that it is considering an extension of the Central Ranges Gas Pipeline to Newcastle via Bayswater.

A pipeline link such as this would aid development of ESG’s proposed Newcastle LNG Project. The company recently signed a MoU with Hitachi Limited and Toyo Engineering Corporation to develop a feasibility study for this project.

ESG Chief Commercial Officer Roland Sleeman told The Australian Pipeliner that detailed design, procurement and construction activities regarding pipeline options are anticipated to commence in late 2011.

“Diameters and capacities for various pipeline sections will be finalised, taking into account market sizes and locations,” he said.

Queensland Hunter Gas Pipeline

Queensland Hunter Gas Pipeline (QHGP) Pty Ltd has said that ESG’s plans to develop an LNG facility in Newcastle could provide the financial incentive to move development on the 840 km QHGP forward. The proposed project would transport CSG from southern Queensland gas fields near Wallumbilla, to the Hunter Valley region in New South Wales.

QHGP Managing Director Garbis Simonian has said that a contract to transport gas to the LNG facility could be enough to secure finances for the pipeline.

Originally the pipeline was expected to begin construction in late 2010–11. However, the project was delayed after a previous foundational agreement to transport 50 PJ/a of gas for 20 years to Chinchilla fell through following QGC’s decision to cancel its 400–600 MW power station. Construction on the pipeline is now scheduled to begin in 2012, with completion and commissioning targeted for later that year.

The pipeline route includes 220 km in Queensland and the remaining 620 km in New South Wales. It will be 500 mm in diameter and have a capacity of 85 PJ/a. A small lateral — approximately 10 km in length — will also extend from the main corridor to the Maitland area in New South Wales. There are currently two metering stations planned, located at Wallumbilla and the Hunter Valley, while others will be constructed as required.

QHGP Pty Ltd is holding discussions with engineering and procurement companies for the pipeline’s construction. The shortlist includes Leighton Holdings, Laing O’Rourke and McConnell Dowell.

QHGP are also awaiting a decision from the New South Wales Government on electricity privatisation, which would make the development of the project more attractive.

Stratford to Hexham Pipeline

Route selection and refinement is underway for a pipeline proposal to deliver gas from AGL Energy’s Gloucester Basin CSG Project to Hexham.

If central processing facility (CPF) Site 1 is chosen as the final location for the CPF, the pipeline corridor would be approximately 100 km in length. Should CPF Site 7 be the preferred option, the pipeline would extend for approximately 95 km to the Hexham Delivery Station (HDS) near Newcastle. The pipeline is expected to be between 245–457 mm in diameter, depending on storage needs.

Industry keeps up with the CSG pace

The pipeline industry has recognised the large contribution that it can make to the development of the CSG sector, via both the construction of additional transmission pipeline capacity, and construction of infield polyethylene (PE) pipe for both gas and water. APIA members have noted that safety in this sector of the industry, particularly for pressure testing and commissioning, must be addressed.

While the existing Australian standard for PE 100 pipe and materials exceeds the current ISO standard, an APIA working group is preparing a code of practice to meet the industry’s holistic requirements similar to the suite of AS2885 standards for high pressure steel pipelines.

The draft is to be completed by mid-2010, for finalisation by mid-2011. The working group comprises members representing producers, designers, constructors, materials and fittings suppliers, and all major CSG producing companies.

Charged for the future

Australia’s gas transmission pipeline system has almost trebled in length since the early 1990s.

With the increase in CSG production in Queensland and New South Wales, and the many associated pipeline projects in planning, the length of Australia’s gas transmission pipeline system is set to grow further in the future.