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2016: The year of gas

In 2016, major projects across the nation placed Australia to potentially become the largest exporter of LNG in the world by 2020.

The three Queensland projects were exporting to Asia, a growing market that in 2014 accounted for 75 per cent of global demand for LNG import, creating a huge, immediate drain on the domestic gas supply. Not helping the matter were campaigning environmental groups, who had gained the support of farmers, succeeding in stopping CSG development in New South Wales and Victoria.

By August, Victoria would announce a permanent ban on fracking as well as an extension of its moratorium on onshore conventional gas exploration and development.

Compounding the problem, the plentiful gas reserves outside of New South Wales and Victoria were not being developed. It frustrated many in the industry, leading to APGA calling on Australia to renew its commitment to its own gas industry and to encourage the use of the substantial gas reserves.

In an attempt to improve gas’s reputation three of the nation’s major gas representative bodies – APGA, Australian Petroleum Production and Exploration Association (APPEA) and Energy Networks Association (ENA) – aligned to produce a brochure, A Bright Future for Gas, to highlight some of the benefits of gas for consumers and the broader community.

Meanwhile, the pipeline industry pushed on with its gas projects. The focus was on the Northern Territory, with the announcement of the Northern Gas Pipeline (NGP) and the looming completion of INPEX’s Ichthys LNG Project – one of Australia’s largest LNG export projects.

Jemena was selected to build and operate the $800 million NGP, a 622 km, 12 inch pipeline between Tennant Creek in the Northern Territory and Mount Isa in Queensland. It would connect the Northern Territory market to the east coast, becoming a cornerstone of the national energy transmission network. It also had the potential to open new exploration and production in areas that had been too remote to be viable. McConnell Dowell had won the project’s construction contract.

Then Northern Territory Chief Minister Adam Giles and Jemena Managing Director Paul Adams announce the NEGI Pipeline in Darwin.

INPEX’s Ichthys Project, a critical part in the development of the Northern Territory’s gas infrastructure network, had reached the crucial stage of connecting to existing gas facilities in the territory. An 890 km, 1,050 mm diameter pipeline was to be constructed by Saipem Australia to connect Ichthy’s gas field to the onshore LNG processing facility in Blaydin Point in Darwin.

In New South Wales and Victoria, the final stages of the Victorian Northern Interconnect Expansion (VNIE) looping began in February. It involved the looping of sections of the 260 km Victorian Northern Interconnect (VNI) pipeline to increase firm peak winter gas flow capacity from the VTS into the Moomba to Sydney Pipeline System by 145 per cent. The expansion involved the construction of 165 km of steel gas pipeline – 95 km in Victoria and 70 km in New South Wales.

Also in Victoria, Cooper Energy signed its second gas supply agreement for the Sole Gas Field, located offshore Victoria, approximately 62 km from the Orbost Gas Plant. The development included a 350 mm diameter, 65 km pipeline that would run from the gas field to the onshore Patricia Balen Plant, with a capacity of 82 TJ/d. Front-end engineering and design (FEED) was completed in 2016.

In Queensland, pipeline projects continued to spring up, with a number of new pipelines underway, including: a 33 km steel gas pipeline and a 31 km water pipeline, as part of QGC’s Charlie Development located in the Surat Basin, Queensland; the 28.5 km Bundaberg Gas Pipeline (BGP) which began at the existing Wide Bay Pipeline, West of Bundaberg, to the Port of Bundaberg; and a 10.5 km high-pressure gas pipeline to supply the North Harbour development at Moreton Bay, Queensland.

Not all projects went to plan. Due to volatile gas prices, the Arrow Bowen Pipeline, a 580 km buried high-pressure steel pipeline to transport coal seam gas from the Bowen Basin to a gas hub 22 km north west of Gladstone, remained on hold. The original completion date had been December 2015.

In Western Australia, the first LNG shipment for one of the region’s largest LNG developments, Chevron’s Gorgon Project off the northwest coast, was exported to Chuba Electris Power in Japan.

Supplies arrive at Barrow Island for the Gorgon Project.

Western Australian projects were also impacted by unfavourable market conditions, which led Woodside and joint venture partners in the Browse FLNG (floating LNG) Project to put the development on hold indefinately.

In other news, the Young Pipeliners Forum (YPF) celebrated its ten year anniversary and Woodside and Monash University teamed up to launch a new Innovation Centre in Melbourne. Officially opened by the Minister for Resources, Energy and Northern Australia the Hon. Josh Frydenburg on 15 June, it aimed to rapidly advance commercial opportunities through materials engineering, additive manufacturing and data science.

The world’s first competency standards, APGA’s Pipeline Engineering Competency Standards, was launched on 21 April at APGA’s Perth Dinner. They gave Australia’s pipeline industry a single engineering competency system, which brought together the onshore and offshore sectors of pipeline engineering for the first time.

The competency standards were born out of a concern that the industry was experiencing generational change in a way that might lead to future gaps in knowledge. After seven years of planning, a comprehensive framework of competencies was presented.

L-R: Shaun Reardon, Cheryl Cartwright, Eric Jas and Ian Wilson at the launch of the APGA Pipeline Engineering Competency Standards.

Registration of oil and gas pipeline engineers based on the competency standards was adopted by Engineers Australia.

A harmonisation and review process on AS 2885.2, the standard that pipelines are welded and the NDT carried out on high-pressure pipelines, and AS 2885.4, which provides requirements for submarine pipeline systems, was completed. Low-hydrogen metal arc welding, gas tungsten arc welding and flux cored arc welding were all added to AS 2885.2 due to the introduction of larger diameter pipelines.

As Australia transitioned from construction to operations phase, edging towards the mantle of the world’s largest LNG producer, to also become the world’s leading LNG producer it would need to address the criteria – capacity, capability, competitiveness, regulatory framework and industrial relations – identified by Accenture in its report, Ready or Not? Creating a world-leading gas industry in Australia.

This article was featured in the 2018 APGA 50th Anniversary celebration book.

If you have news you would like featured in The Australian Pipeliner contact Managing Director David Convery at dconvery@gs-press.com.au

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