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New Zealand: maintaining a pipeline network on the Ring of Fire

Due to its location on a fault line, New Zealand is susceptible to earthquakes, creating a challenging environment for pipelines. Despite this, NZ has been able to mitigate these effects to maintain a gas network that includes over 3,500 km of high pressure pipelines.

NZ’s major pipelines include the Maui Pipeline, extending from South Taranaki north to Huntly, and Vector Energy’s network, which extends to most major North Island centres. Other transmission pipelines are owned by Origin Energy, Shell and Todd Energy.

The Maui Pipeline is NZ’s largest high-pressure transmission pipeline. It runs 307 km from the Oaonui Production Station, south of New Plymouth, to the Huntly Power Station, south of Auckland, in the North Island of NZ, traversing some of NZ’s most inhospitable terrain. The pipeline is made of steel and ranges in diameter from 750-850 mm.

Beginning transmission in 1979, the Maui Pipeline carried 17.9 PJ of Maui gas in its first year of operation. In 2010, it carried 128 PJ of gas – 74 per cent of NZ’s total supply.

There are currently six gas producers which directly inject into the Maui Pipeline and 18 gas consumers who take direct delivery of gas. These consumers range from small towns and gas distribution systems to thermal-generated power stations and petrochemical plants.

The Maui Pipeline operates under an “˜open access’ regime, which means that in addition to transporting gas from the Maui field, it also transports gas owned by other parties from other fields. There are currently twelve different parties who ship gas through the Maui Pipeline.

The pipeline is owned and operated by Maui Development Ltd (MDL), the agent and trustee of a joint venture entered into by companies from the Shell group, Todd Petroleum Mining Ltd and OMV NZ Ltd, which are collectively known as the Maui Mining Companies. Vector Gas Ltd acts as both the system and technical operator for the Maui Pipeline.

Upgrading the Maui Pipeline

In October 2011, the Maui Pipeline experienced a gas leak. At the time of writing, MDL had just released its technical investigation report into the pipeline outage.

The report, which was prepared by the pipeline’s operator, Vector, concluded that the gas leak and resulting outage was caused by a section of the pipeline in North Taranaki’s Pukearuhe area failing due to sudden overload caused by landslide movement. Metallurgical investigations have found that no property, defect, or flaw in the pipe itself contributed to the failure.

The Pukearuhe section of the pipeline has now been stabilised through a range of measures, including embedding it in loose granular material to facilitate movement, additional drainage of the area, and ongoing monitoring. In addition, a program has been established for evaluating the ongoing and additional monitoring that has been put in place to implement a longer term solution for this section of the pipeline.

MDL Chairman Rob Jager said “The Maui Pipeline traverses a range of challenging topographical and geological areas. MDL as the owner and Vector as the technical operator actively manage the risks this creates through a wide range of rigorous maintenance and safety processes, including monthly flyovers, walkovers, full internal inspections of the pipeline, ongoing geotechnical surveys, and scheduled upgrades.

“However, the reality is that in a country like NZ, the risk natural land movement poses to infrastructure like gas pipelines can be mitigated, but not eliminated entirely.”

Before the October 2011 incident, the Maui Pipeline had operated reliably and without a major incident for over 30 years and is well within its expected lifespan of 80 years.

A $19.3 million project is now underway to upgrade a section of the Maui Pipeline which has been identified as susceptible to erosion.

The Taranaki Regional Council gave resource consent to owner MDL and technical operator Vector in late October 2011 for the realignment of a section of the pipeline. The section – which is located 6 km north of the Pukearuhe area where the pipeline failed in October 2011 – is close to cliffs that are susceptible to coastal erosion and adverse weather.

MDL said that the pipeline is not under any immediate threat, and it would be a number of years before it would be at risk.

Front-end engineering design work is presently being carried out, ahead of full implementation.

Vector’s transmission network

In addition to operating the Maui Pipeline, Vector also owns approximately 2,288 km of high-pressure gas transmission pipelines.

The North System extends from the end of the Maui Pipeline at Rotowaro near Huntly to Auckland, then through to Kauri north of Whangarei.

The Central System consists of two parts. The Central (North) System extends from Rotowaro to Hamilton, and includes the Morrinsville subsystem; and the Central (South) System runs from the Kapuni Gas Treatment Plant to interconnect with the Bay of Plenty System at Pokuro.

The Bay of Plenty System extends east from Pokuru near Te Awamutu on the Maui line to Taurange, Taupo and Gisborne.

The South System extends south from the Kapuni Gas Treatment Plant to Wellington and Hastings. This system also includes two sections of looping – an 87.3 km, 300 mm diameter section between Hawera and the Kaitoke Compressor, and a 55.7 km, 300 mm diameter section between the Otaki tie-in and Belmont.

The Frankly Road to Kapuni System connects the Frankly Road Offtake Station on the Maui Pipeline near New Plymouth to the Kapuni Gas Treatment Plant, including laterals to the Taranaki Combined-Cycle Power Station and the ammonia-urea plant.

Gas from the Maui Pipeline flows into Vector’s interconnected pipelines and is used to supply major industrial plants, dairy factories and power stations. Gas originally transported through the Maui Pipeline is also used to supply local low-pressure distribution networks in Auckland, Wellington, Hamilton, Tauranga, and many other towns and cities throughout the North Island of New Zealand.

At the time of writing, Vector was undertaking a number of upgrades to its distribution network, involving the replacement of the existing low-pressure cast-iron pipelines with new medium-pressure pipes. These were being performed on the company’s Hamilton West, St Lukes, Oranga and Te Papapa gas networks, with the intention of increasing the gas capacity to provide for new connections.

In addition to operating the majority of NZ’s gas transmission and distribution network, Vector also offers other pipeline services such as cathodic protection, instrumentation, maintenance and pipeline defect repairs.

Contractors in NZ

McConnell Dowell, a company that delivers marine, civil, mechanical, maintenance, tunnelling, and pipelines services, has been heavily involved in the development of NZ’s pipeline network. The company was in fact founded in NZ in 1961 by Kiwis Malcolm McConnell and Jim Dowell, who instilled a focus on overcoming challenges and achieving engineering excellence into the business.

The courage to “˜take things on’ is what led them to design and build the offshore circulating water cooling system for Marsden Point Power Station in the mid 1960s. The typically complex project – then the largest subsea pipeline in the country – allowed McConnell Dowell to create a design solution which was a world-first in marine technology and made headlines in international engineering and construction publications.

McConnell Dowell continued to create many “˜firsts’, and by 1968, new opportunities had emerged from NZ’s natural gas resources. Construction contracts on the Kapuni natural gas pipeline and an innovative twin sand slurry pipelines system off the rugged west coast confirmed the company’s onshore pipeline capabilities.

With continued success in the 1970s, McConnell Dowell, as part of a joint venture, commenced construction of the Oanui and Maui pipeline from the Huntly gas pipeline in the North Island. The pipeline, which was constructed through difficult terrain, was a significant milestone in the company’s large diameter pipelaying capabilities.

Through the 1980s and 1990s, McConnell Dowell constructed a number of other gas pipelines in NZ, including the high-pressure natural gas pipeline, compressor and metering station from Te Awamutu to Kinleith, the offtake station and river crossing at Waikato on the Huntly to Papakura Pipeline, and the North Harbour natural gas pipeline from Taupaki to Albany.

In 1986, McConnell Dowell constructed the NZ Steel Primary Irons and Dewatering Plant with the world’s first polyurethane-lined, high-pressure underground pipeline transporting abrasive granular materials by positive displacement pumps. The project extended the then known bounds of slurry pumping technology.

In 2008, McConnell Dowell had been awarded the contract for the establishment and operation of a temporary spoolbase, to support the overall Kupe Gas Project in NZ by the Origin Technip Alliance. McConnell Dowell used an automatic welding process and inspected each weld using automatic ultrasonic testing. The spoolbase contract was an important part of the Kupe Project and included civil and structural works, and spoolbase fabrication.

Engineering, operations and training services provider OSD Pipelines also established a major presence in NZ in March 2010, after opening an office in New Plymouth, Taranaki. Since this time, OSD has been involved with the operations and maintenance of a large number of transmission and distribution pipelines on the North Island.

Pipelines for production

Shorter pipelines have also been incorporated into plans for some of NZ’s exploration and production programs.

Earlier this year, TAG Oil announced a $66 million capital expenditure program within its Cheal and Sidewinder fields, which would include construction of a new 6 km, open-access gas transmission pipeline to maximise the marketability of the company’s gas production. This follows the completion and commissioning of the Sidewinder production facility and its associated 3.5 km pipeline in November 2011.

New Zealand Energy Corporation (NZEC) also plans to build a natural gas pipeline to its Copper Moki-1 production facilities, which are also located in the Taranaki Basin. NZEC has started negotiations with gas supply companies in the area, upon completion of which the company expects to begin marketing its natural gas production. The direction and length of the pipeline are yet to be determined.

Taking steps to secure supply

The NZ Ministry of Economic Development (MED) is currently reviewing the country’s upstream petroleum settings to secure energy supply. The review aims to improve the co-ordination of health, safety and environmental matters; streamline processes associated with the Crown Minerals Act 1991; accommodate emerging technologies and resources; and ensure that there is more clarity for participants and greater transparency for the public in the development of new petroleum opportunities.

An MED spokesperson said “Gas has an important role to play in NZ’s overall energy mix. It has been a major energy source in NZ for more than 30 years, and is an important feedstock for electricity generation (it accounted for 18 per cent of generation in 2011).

“It is also an important direct source of energy in industry and homes. Should exploration activity increase, we would expect increased oil and gas production levels in future.”

Should these elevations in oil and gas production be achieved, it is likely that further upgrades and expansions, or even new pipelines will be required for both upstream and downstream transport.

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