Pipelines in NSW: what lies ahead?

In September 2012, the New South Wales Department of Planning and Infrastructure announced its Strategic Regional Land Use Policy, which was designed to “˜protect’ more than 2 million hectares of strategic agricultural land from coal seam gas (CSG) exploration activity, particularly in the Upper Hunter and New England North West regions. Key aspects of this new policy include the establishment of a Land and Water Commissioner to oversee regulation of exploration activity and the requirement of an agricultural impact statement at the exploration and development application stages.

In February 2013, the NSW Government announced a number of further measures to restrict the extraction of CSG in the region. Among these new restrictions is a 2 km exclusion zone around residential areas, including lands identified for
future residential growth, and critical industry clusters such as the viticulture and equine industries.

These policy changes have placed NSW at the centre of the national debate surrounding the natural gas industry, with many holding the view that NSW is staring down the barrel of a massive gas supply shortfall. According to the Australian Energy Market Operator, NSW is a net importing state and its customers have to compete for supply with growing demand in Victoria, South Australia and particularly Queensland, with major LNG projects set to come online in the next few years.

In addition, the policy changes have cast uncertainty over the future of some of the proposed projects in the region, including Infratil Energy’s Bamarang Power Station and Pipeline, Santos’ Narrabri to Wellington Gas Pipeline, the Hunter Economic Zone’s Hunter Gas Pipeline, Macquarie Generation’s Liddell Gas Pipeline and Metgasco’s Lions Way Pipeline, which are all now on hold.

Gloucester Gas Project gets the go-ahead

One project that had already received approval under the Environment Protection and Biodiversity Conservation Act 1999 before the policy changes came into effect is AGL’s Gloucester Gas Project.

The Gloucester Gas Project is situated in PEL 285 and will include the construction of up to 110 gas extraction wells, a central processing facility, a gas transmission pipeline and a gas delivery station to be located at Hexham.

The gas transmission pipeline is called the Stratford to Hexham Pipeline and will transport gas produced from the Gloucester Gas Project to an interconnection with the Sydney to Newcastle Pipeline. Based on the concept design, it will be approximately 95 km in length, 254-457 mm in diameter, is likely to be manufactured from API 5L X70 steel, and have a maximum allowable operating pressure of between 10.2 and 15.3 megapascals.

Front-end engineering design for the pipeline is expected to be completed in the first quarter of 2014, with tendering expected to commence in the second quarter of 2014. The pipeline construction activity is likely to commence in 2015, with the goal of commissioning in the second half of 2016.

Upstream of the pipeline, AGL will be constructing a central processing facility (CPF) to process and compress the gas before it enters the transmission pipeline. AGL will also be designing and building a gas and water gathering system upstream of the CPF to deliver low pressure gas and water to the CPF for processing. In addition to the CPF and gathering system AGL will also be constructing associated civil infrastructure to support the water and gas gathering system.

According to an AGL spokesperson, the development of new gas supplies to the growing Sydney and NSW market is important to guarantee supply.

“Without securing additional gas supplies from within NSW, we won’t be able to put downward pressure on gas prices and there are risks associated with unexpected disruption to a major supply due to an unexpected supply failure,” said the AGL spokesperson.

“The Gloucester Gas Project will provide the next step in helping to ensure that the supply of gas to the Sydney, Newcastle and wider NSW markets is more secure in the future.

“The Gloucester Gas Project would produce 20-30 petajoules of gas per annum which is approximately 10 per cent of the NSW market. There is also the potential to increase production rates over time.”

“˜More focused’ Narribri Gas Project proposed

Another project that could bring a significant amount of energy security to the region is the Narribri Gas Project. In July 2013, Santos sought approval for a more focused exploration and appraisal program, which targets areas in and around the Pilliga Forest in north-west NSW, stating that the Narribri Gas Project could potentially supply over 25 per cent of the natural gas used by NSW homes, small businesses, major industries and electricity generators.

The proposed exploration activity includes the recommencement of two existing pilots which were shut in when Santos took over the Narrabri operations from Eastern Star Gas, the drilling of one additional corehole, 12 additional pilot wells and the re-entry of three other existing wells.

Associated flow lines to transport gas and water between the pilots and facilities will also be referred.

According to Santos, the activities won’t impact strategic agricultural land, which the state government has protected under the new CSG regulations, but the company is still seeking various approvals from the government for this program.

Water pipelines progressing well

June 2013 was a big month for the water pipelines in NSW, with the Macquarie River to Orange Pipeline Project receiving approval from the NSW Planning and Assessment Commission and construction of the Split Rock Dam to Barraba Pipeline reaching completion.

According to Orange Mayor John Davis, the Macquarie River Pipeline still requires Federal approval but the project has been through a thorough assessment and he is hopeful that it will receive approval.

The project involves the construction and operation of a 39 km, 365-457 mm diameter pipeline with the capacity to transfer up to 7 megalitres per day of water from Macquarie River to Suma Park Dam. The pipe will be constructed from mild steel cement lined pipe.

Construction of the 27.2 km, 200 mm Split Rock Dam to Barraba Pipeline began in May and is now complete.

Leed Engineering contractors laid 5.5 m lengths of pipe at a rate of approximately 800 m per day.

According to the Tamworth Regional Council Barraba Pipeline Engineer Neil Sharpham, contractors pressurised the pipe for confirmation testing in August, which took approximately three to four weeks to complete.

Construction activity is now focused on completing a 300 kilolitre balance tank at the Barraba Water Treatment Plant, a 1.5 megalitre break-pressure tank at Red Hill near Barraba and a pump station at the base of the dam wall. Upgrade work at the Barraba Water Treatment Plant, including modification of pipe work, construction of a delay tank and the installation of powder activated carbon dosing for taste and odour control has also started.

Under the scheme, water from the Split Rock Dam will be conveyed to the Barraba water treatment plant for treatment and distribution to the Barraba community. Work is on schedule to be completed in early 2014.

Send this to a friend