Welcome to the jungle: pipeline projects in PNG

Papua New Guinea (PNG) spans over 463,000 sq km and has a population of approximately6.1million people. The country’s terrain is rugged, with the New Guinea Highlands spanning the length of the country. The highlands are covered in tropical rainforest. Lowland and coastal areas are typically covered in dense rainforest and wetland areas around the country’s river system.

Despite the challenging terrain, there are currently two major pipeline projects proposed in PNG, both of which form part of LNG developments designed to tap into the country’s estimated 22.5 Tcf of gas reserves.

Liquid Niugini Gas LNG Project

Liquid Niugini Gas has proposed a two-train LNG plant adjacent to InterOil’s existing refinery at Napa Napa.

The infrastructure would include a 354km gas pipeline from the Elk/Antelope field to an LNG storage and handling facility at Napa Napa, near Port Moresby. The facilities would be designed to interface with the current refinery infrastructure.

Natural gas produced will be treated at a conditioning plant in the Gulf Province and then transported to the proposed LNG plant. The LNG facility will be designed to operate as a tolling facility, with LNG to be jointly marketed by the upstream owners on behalf of the joint venture. Bechtel has been contracted to provide the front-end engineering and design (FEED) for the plant.

First production of LNG is planned for late 2014 or early 2015.

Shareholders in the joint venture are InterOil Coproration, Pacific LNG Operations and the PNG Government-owned Petromin PNG Holdings.

PNG LNG Project

The largest industrial development proposed in PNG to date, the PNG LNG Project will involve the integrated development of the Hides, Angore and Juha gas fields, as well as associated gas from the Kutubu, Agogo, Gobe and Moran oil fields.

The gas will be transported by an approximately 850 km pipeline that will connect to a two-train, 6.6 MMt/a LNG facility site. The pipeline will have an onshore and offshore section. The project is in the early stages of its four-year construction period. Key activities since sales and financing arrangements were finalised in March have included establishing project teams and necessary infrastructure within PNG, and continuing pre-construction biodiversity and cultural heritage surveys. Construction activities have mostly focused on improving and upgrading infrastructure, including road and bridgeworks, telecommunications, and constructing camps to house the construction workforce.

The onshore pipeline and affiliated infrastructure will be built by French company Spie Capag. The onshore section will connect the Kutubu, Agogo, Gobe and Moran fields with the offshore pipeline shore crossing, a distance of approximately 300 km. Construction of the offshore pipeline will be undertaken by Italian company Saipem. The scope of work includes the engineering, transportation and installation of a 407 km, 864 mm diameter subsea gas pipeline connecting the Omati River landfall point on the southern coast of PNG to the onshore point near Port Moresby, where the LNG plant will be located. The contract also includes the shore approach excavation and backfilling at Port Moresby and the trenching and backfilling of a 75 km section of the pipeline at the Omati River landfall.

The pipeline enters Caution Bay through a gap in the barrier reef, crossing the deeper silt and clay sea bed and avoiding scattered coral reefs closer to shore. Maximum water depth along the route will be approximately 100 m. Marine operations will be carried out by the Semac 1 offshore vessel and activities are to be completed in the third quarter of 2012. Detailed engineering and execution planning is currently proceeding for both the onshore and offshore pipelines and pre-construction environmental and cultural heritage surveys are underway along the route.

Japanese engineering and construction firms Chiyoda and JGC have been awarded engineering, procurement and construction (EPC) contracts for the LNG plant. Currently, detailed engineering and execution is underway for the LNG plant along with early works to establish camps and infrastructure such as roads and security fences.

A joint venture between CB&I and Clough has been awarded an EPC contract for a gas conditioning plant. The joint venture will also be involved in the installation of nearby wellheads, and piping and infrastructure associated with the plant.

There will also be 16 new wells and two gas conditioning plants. The LNG facilities site will be located on the shore of Caution Bay, 20 km northwest of Port Moresby between the villages of Boera and Papa.

It is expected that the first LNG shipments will be delivered by late 2013 or early 2014.

Joint venture participants include ExxonMobil subsidiary Esso Highlands as operator, Oil Search, the PNG Government, Santos, Nippon Oil, Mineral Resources Development Company and Petromin PNG Holdings Limited.

Onshore pipeline routeing challenges

Coffey Environments is the lead environmental consultant for the environmental impact statement (EIS) as well as subsequent baseline studies and pre-construction surveys.

In a recent presentation Carmel Coyne, a Principal at Coffey International, outlined specific challenges of the pipeline routing of the onshore PNG LNG Pipeline.

Located in one of the most remote and least accessible parts of PNG, Ms Coyne noted that large parts of the project area are limestone karst and include extremely steep terrain, numerous active faults, unstable soils, high rainfall and large areas of swamp.

The pipeline routeing assessment process was advanced in two phases at two different scales – strategic and tactical.

The strategic was a broad regional scale that took place during the government permitting phase, and the tactical was a local scale during final planning of the route, using pre-construction surveys.

“There was an inevitable tension between economic pressures (cost and timing) and efforts to protect biological, cultural heritage and social values during each stage,” Ms Coyne said.

The pipeline routeing, Ms Coyne described, is the single and largest environmental impact of the project.

“Pipeline routing in the upstream onshore project area is highly constrained by physical, environmental and social factors, which can curtail some route options,” Ms Coyne said.

The pipeline route was optimally chosen in areas of reduced ecological value or risk such as clearings, previously logged forest and terrain with stable soils.

Previous pipeline experience: the Kutubu Oil Pipeline

In 1991 the Kutubu Pipeline project came face-to-face with the terrain of PNG. Strategic logistics were undertaken to take on the jungle features of the country, including the constant rainfall.

Oil of commercial quantities was first discovered at Iagifu in the southern highlands of PNG near Lake Kutubu in 1986, and was developed by a joint venture between Chevron Niugini and the PNG Government. The development comprised a 508 mm diameter, 171 km onshore pipeline, and an initiating pump station in the field, and a 500 mm diameter, 94 km offshore pipeline.

The final pipeline design was completed in November 1989 after the route selection, survey and engineering were completed. A joint venture between McConnell Dowell and Spie Capag constructed the onshore pipeline, while Bouygues Offshore was awarded the contract to lay the offshore pipeline and install offshore facilities.

The construction team of the Kutubu Oil Pipeline encountered difficult terrain.

At the completion of the project, McConnell Dowell Construction Manager Jeff Shepherd said “The Kutubu project was both exciting and dangerous. The terrain was 75 per cent swamp with numerous fast-flowing rivers and 25 per cent mountains. The climate was hot and humid with temperatures often reaching more than 30 degrees Celsius.”

For the pipeline to be constructed, helicopters were used to fly in contractors and carry out the route surveys.

In addition, having the Kikori River being the point where the onshore line finished and the marine line began made the Kutubu pipeline unusual. Entering the Kikori River about 4 km upstream from the Kikori village, the pipeline was routed down the channels of the Kikori and Nakari Rivers for a distance of about 48 km, where it entered the Gulf of Papua. On completion, the total river pipelay spread involved 12 vessels and 190 people.

The final pipeline testing and commissioning was completed in June 1991.

The challenges that the PNG terrain poses to pipeline construction companies and project developers are daunting, but the exciting opportunities that the country presents for gas development and commercialisation have made it a key nation for investment in the Asia Pacific region.

As the PNG LNG Project moves into its initial construction phase, and Liquid Niugini Gas refines planning for its proposed LNG project, the Australian pipeline industry awaits to hear about potential opportunities to be involved, and any innovative methods that may be developed to aid the construction of pipelines through such rugged and dense terrain.

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