GAS Today / November 2010
Transcripción
GAS Today / November 2010
Issue 14 November 2010 Construction contractors Exporting LNG CSG fires up at Condamine 22–24 March 2011,Brisbane • The magazine for Australia’s natural gas industry • What we do Welding Victorian Desalination Plant 85km DN1950 Stringing Walloons DDPS Origin Energy 205km DN450 Lowering QSN Link Epic Energy 182km DN400 What we’re about do no harm . leadership . team work . integrity . passion for results . quality . entrepeneurship we bring energy to its destination www.nacap.com [email protected] Thinking ahead about innovation. Which gasMWM engine is FP the right one for you? Ask the inventors. In 1880 Carl Benz invented the first stationary gas engine, thus laying the foundation for the company MWM. Today we are the specialists in high-performance gas and diesel engines for power generation. Our engineers work constantly to improve performance values, fuel consumption and reliability for MWM engines, and can optimize output for emissions and efficiency. For more information contact MWM Energy Australia Pty Ltd +61 (0)3 9262 3000 [email protected] www.mwm.net After all, each advance pays off in your bottom line figures. MWM’s technical leadership reduces energy consumption, and offers energy solutions from waste recovery and renewable fuel sources in the interests of our environment. November 2010/Issue 14 REGULARS 6 64 46 47 48 Editor’s comment Advertisers’ index, Subscription request, Coming soon in future editions NEWS 8 CONSTRUCTION PROJECTS Gas Today Update 50 PERSPECTIVE 12 Great Southern Press Great Southern Press Pty Ltd A.C.N. 005 716 825 (A.B.N. 28 096 872 004) GPO Box 4967 Melbourne Vic 3001 Australia Tel: +61 3 9248 5100 Fax: +61 3 9602 2708 [email protected] www.gastoday.com.au Editor: Scott Pearce Associate Editor: Katherine St Lawrence Contributing Editor: Lyndsie Mewett Journalists: Erin Radford, Kim Haworth, Sally Commins, Melanie Ryan Sales Manager: Tim Thompson Sales Representatives: David Marsh, Brett Thompson Design Manager: Michelle Bottger Designers: Lela Sablic. Venysia Kurniawan and Ben Lazaro Event Manager: Elissa Duck Publisher: Chris Bland ISSN: 1832-0562 Condamine Power Station. Image courtesy of AE&E Issue14 November2010 ExportingLNG CSGfiresupat Condamine 22–24March2011,Brisbane •ThemagazineforAustralia’snaturalgasindustry• 2 GAS Today / November 2010 CSG fires up at Condamine Power Station 2010 election: repercussions for the gas industry REGION REVIEW – New south wales Short-term gas trading market begins operation Technology 52 54 Gas generating interest in NSW Coal seam gas: the new Star of NSW RETAIL 16 LNG 20 26 Negotiating Australia’s first LNG export contract LNG high on the agenda in the Northern Territory COAL SEAM GAS 28 30 32 34 36 38 Safeguarding the Queensland CSG industry The reverse osmosis option Enerflex open for Brisbane business Global support for local CSG industry Safety under pressure: tendering for major projects PPI: piping CSG TRANSMISSION 40 42 52 iGas: break-through application for gas to fuel large highway trucks AGiT 59 Young ones pipe up at Gas Speak FutureGAS 2011 60 Get ahead – get to FutureGAS 2011! EVENTS 62 62 63 63 LNG in focus at SEAAOC ENA Gas Seminar New gas opportunities on agenda at APIA 2010 Calendar of events Compensating for the Joule-Thomson effect APA: expanding pipeline system capacity across Victoria and New South Wales The magazine for Australia's natural gas industry Construction contractors Gas to the max: Wollert – Euroa pipeline gets an upgrade Driving the LNG highway Pipeline technology ploughs into the CSG industry Average Net Distribution 2980 Period ending March 2010 Unless explicitly stated otherwise in writing, by providing editorial material to Great Southern Press (GSP), including text and images you are providing permission for that material to be subsequently used by GSP, whole or in part, edited or unchanged, alone or in combination with other material in any publication or format in print or online or howsoever distributed, whether produced by GSP and its agents and associates or another party to whom GSP has provided permission. This magazine is available to interested parties throughout Australia and overseas. The magazine is also available by subscription. The publisher welcomes editorial contributions from interested parties, however, the publisher accepts no responsibility for the content of these contributions and the views contained therein are not necessarily those of the publisher. The publisher does not accept responsibility for any claims made by advertisers. GAS Today / November 2010 3 Event partner Major Sponsor Australia’s whole-of-industry gas event GSP DPS 22–24 March Brisbane Convention & Exhibition Centre Register now at www.futuregas.com.au Editor’s comment A ustralia decides. Almost. Since our last edition in August, Australia went to the polls and delivered a decisively inconclusive result. After 17 days of negotiations with the cross benches that covered a wide range of issues, the Labor Party was successful in gaining support to be returned to government. The Hon Martin Ferguson has retained his Energy and Resources portfolio which has been well received by the industry. Industry stalwart Ollie Clark has a thought-provoking article in this edition that looks back at the election and forward to the issues facing the Government for the current term. The Government has since instigated its Policy Transition Group who will advise on the transition of existing petroleum projects to the Petroleum Resource Rent Tax (PRRT). The Group has released a PRRT Issues Paper which sets out its view on the mechanics of how the PRRT should apply to coal seam gas (CSG) and LNG projects. From here, draft PRRT legislation for public comment will be issued before June 2011, and then the Government will introduce legislation to Federal Parliament in late 2011. With numerous LNG projects at varying stages of development around Australia, we look back to the one that started it all. Gas Today’s Associate Editor Katherine St Lawrence recently interviewed Shane McCarthy – who was a lawyer at Shell and intimately involved during the negotiation of the original contracts for the NWS joint venture. His account is a fascinating insight into the process and no doubt one that is being replicated, in many ways, across boardrooms throughout Asia with respect to current Australian LNG projects. Looking towards developing the projects that this LNG will be contracted from, Federal Environment Minister Tony Burke recently gave conditional environmental approval to the Santos-led GLNG Project and BG Group’s Queensland Curtis LNG Project along with approving the dredging works for Gladstone Port’s western basin to allow LNG tankers access. As we know, CSG will be the feedstock for the various Queensland LNG projects and in this edition we look at CSG issues 6 GAS Today / November 2010 including safety and water management as well as reporting on those who are servicing and supplying the industry. Against this backdrop of activity in Queensland, FutureGAS 2011 (22–24 March 2011 in Brisbane) will be discussing issues including LNG, CSG, domestic gas needs and supply, the latest project developments and also the future of the industry – what are the new frontiers for the natural gas industry including new uses and sources. Two speakers that we are delighted to have addressing the event are the recently appointed Queensland Gas Commissioner Kay Gardiner, as well as Tony Petersen from the DomGas Alliance in WA. Their perspectives on where the industry is headed and the issues that need to be overcome will be a highlight of the event. In addition, this year we will have a one-day technical stream that will address issues and developments for engineers and technologists. You can follow developments in the program, find out more about the event and also register to take advantage of the earlybird rates at www.futuregas.com.au The Short Term Trading Market (STTM) commenced operations in Sydney and Adelaide on 1 September this year, the result of a lengthy process aimed at improving transparency and efficiency of the east coast gas market – we speak with those active in the market to gain their impressions on the performance of the STTM to date. An issue that we regularly promote in Gas Today is natural gas as a transport fuel. In this edition we hear about a new technology to drive heavy transport and developments to create a refuelling network along major routes. Finally, we take a look at activities in New South Wales including their growing coal seam gas industry and gas-fired generation. With this our last issue for 2010, we hope you have had a successful year and look forward to reporting to you throughout 2011. Scott Pearce Editor ERHP 1/21 NEWS Lifting the Curtin on tight gas in WA In order to further tight gas exploration in Western Australia, researchers from Curtin University, the University of Western Australia and CSIRO will work with Whicher Range Energy to study the tight gas sands of the South Perth Basin. A review will be taken of the geology, wireline logs, geomechanics and drilling issues of the Whicher Range field and the tight gas sweet spots will be mapped. The project is funded by the Western Australian Government’s Exploration Incentive Scheme. Government gives green light to GLNG and QCLNG Federal Environment Minister Tony Burke has granted conditional environmental approval to Santos’ proposed GLNG Project and BG Group’s proposed Queensland Curtis LNG (QCLNG) Project, both to be located in Gladstone. Mr Burke has established more than 300 new conditions that the projects’ proponents must adhere to in order to maintain the environmental approvals, including groundwater protection related to the production of coal seam gas (CSG), which will be used as feedstock for both projects. ERHP 2/21 Macedon development gets BHP go-ahead BHP Billiton has approved the development of the offshore Macedon gas fields in the Exmouth Sub-basin, Western Australia. The Macedon Gas Development will commercialise natural gas from offshore production lease WA-42-L, located 100 km west of Onslow. The project involves four offshore production wells supplying a 90.5 km, 500 mm diameter wet gas pipeline to an onshore gas treatment plant. The plant will have a nominal capacity of 200 million cubic feet per day and will be constructed at Ashburton North. First production is expected in 2013. New gas supplies for WA Santos has announced that it will develop new gas supplies for the Western Australian domestic market by developing and producing gas from the Halyard and Spar fields, which it owns with Apache Energy. The two companies will complete and tie back the Halyard well in WA 13L and the Spar-2 appraisal well in WA 4R, both located in the offshore Carnarvon Basin. The area contains expected recoverable resources of approximately 335 petajoules, which could supply the state with gas until at least 2025. Halyard is expected to be operational in mid-2011, and Spar in late 2012. Continued on page 10 > Can’t wait for the next edition of Gas Today? Get the latest news at www.gastoday.com.au/news 8 GAS Today / November 2010 Coates Hire can provide you with a totally reliable solution to help maximise productivity on any Oil and Gas project. With more than 1.5 million items of equipment, plus over 200 branches nationwide, Coates Hire is the largest and most experienced hire company in Australia. So talk to the experts at Coates Hire, they’ll make sure you get the right advice and right gear for your project. coateshire.com.au Envestra seeks price rise to support capital works program Envestra has lodged submissions with the Australian Energy Regulator (AER) in support of its request for an increase in gas distribution tariffs in South Australia and Queensland. The average charge for delivering gas to domestic customers would rise by approximately $1.40 per week in South Australia and $1.60 per week in Queensland if the company’s proposal is accepted by the AER. Envestra Managing Director Ian Little said “Subject to the AER allowing an acceptable, market-related investment return, we will spend around $675 million on capital projects over the next five years.” The requested increase comes as part of the review of the company’s access arrangements. The revised access arrangements are for the five years commencing 1 July 2011. It is expected that the AER will issue its draft determination in early 2011 and the final determination in April 2011. Unlock the value of stranded gas with Black & Veatch’s PRICO® LNG technology LNG production to be exempt from PRRT Coal seam gas (CSG) operations and LNG projects will be subject to a different point of taxation to other resources under the extended Petroleum Resource Rent Tax (PRRT), according to a new Issues Paper from the Federal Government’s Policy Transition Group. They will be taxed at the point where a marketable petroleum commodity has been sold, further processed or treated, or has been moved from its place of production. Onshore petroleum ventures, and the offshore ventures that were previously exempted from the PRRT, will now move to the regime under measures announced by the Federal Government. flexible | reliable Our PRICO process advantages are applied across a broad range of plants: 15 Plants in Operation 35 Years of LNG Production 140 MM Tons of LNG Produced 6 Plants Under Development Covered by Three U.S./International Patents • • • • • • • Providesbulkgasreleaseupto600kPa Improvedwellheadextractionrates SuperiorCorrosionPerformance -316StainlessSteelbody&Ertalonendcaps Lightweight(12kg)–afractionofnearestcompetitor Includesthreadedriserkittoallowforpossiblegasre-injection 2”NPTthreadedfittingforattachmenttothemainpipeline DesignedandManufacturedbyGFR–AllAustralianproduct The Solution GFR Vent Master HRAE High Point Vent The Ventmaster HRAE valve is the ONLY engineering solution to handle the large amounts of dissolved methane that comes out of the fluid at the high points of CSG water management pipelines. Fitting this valve results in the pipeline running at much higher efficiencies, electrical pumping costs are greatly lowered, surge is mitigated and flowmeters actually read correctly. GFR Perth Head Office e: [email protected] p: 08 9250 2944 w: www.gfr.com.au 10 GAS Today / November 2010 efficient ERHP 3/21 Can’t wait for the next edition of Gas Today? Get the latest news at www.gastoday.com.au/news METHANE VENTING IN CSG WATER MANAGEMENT LINES | www.bv.com | proven Our environmental 2010 election: repercussions for the gas industry advantages give you the confidence you need. By Ollie Clark, AM As the dust settles and the Gillard Government gets down to business, one might well ask whether there are implications for the gas industry. The top issues are the stances the new government will adopt with respect to the control of greenhouse emissions and regulation of the production sector of the gas industry. I t is, I think, significant that the energy portfolio will continue under the stewardship of Martin Ferguson, AM, and that the influence of the Greens has been strengthened – including a Greens member of the finely balanced House of Representatives, and a total of nine Greens Senators, as of 1 July 2011. Carbon costings Happily, there seems to be growing consensus within the Parliament and broad acceptance amongst the citizenry, of the wisdom and inevitability, respectively, of some form of carbon dioxide emissions penalty. A simple “$ per tonne” tax seems likely to eventuate. This path was pretty much Labor Party policy before the recent election and is likely to gather pace per favour of the Greens, and the reappointment of the Treasurer and the Minister for Energy. The rate at which this tax will influence behaviour will depend on the initial carbon price ($20 per tonne?) and the rate at which it is increased. The purpose to which the potentially huge sums raised are put, assuming – perhaps naively – they will be invested to further the cause, will also influence the rate of uptake. Given all Australian governments’ reluctance (or perhaps refusal) to even consider nuclear power generation, and given the Labor/Greens alliance’s strong commitment to greenhouse gas reduction, the focus for growth will clearly be on the renewable energies and natural gas. It seems to me that sequestration of carbon from coal-fired power stations has a long, long way to go even to abate, somewhat, the emissions from existing coal-fired power stations. Gas and generation There appears to be a general lack of understanding in the community of the significant carbon dioxide emissions reductions available via the use of natural gas in combined-cycle (or better still, cogeneration and trigeneration) power generation, due to: (a) the greatly improved thermal efficiency it affords; and, (b) the intrinsic nature of natural gas, which has the lowest carbon-to-hydrogen ratio of all the fossil fuels. The net result is a reduction of approximately 60 per cent on a per kilowatt hour basis, compared with coal-fired generation. Despite what I read, I cannot for the life of me see why the capital cost of gasfired generation (nor for that matter the maintenance costs) is quoted as excessive. C ERHP 4/21 onocoPhillips is committed to protecting the environment that we all share. Employed in LNG facilities around the world for over four decades, the ConocoPhillips Optimized Cascade® Process continues to set new standards in the design and operation of efficient and cost-effective LNG facilities. The technology has strong environmental advantages, including: Ollie Clark, AM. In my view, it should be a fraction of the cost of coal-fired plants considering the huge infrastructure required to support the latter, which are often built in rather remote areas necessitating the installation of costly transmission networks. This raises the point that in this day and age the opportunity is there to move away from the traditional model of a small number of very large generators to a large number of very small generators – embedded generation. This concept is gaining acceptance worldwide, even to the individual household level. Natural gasfuelled embedded generation facilitates the use of waste heat for domestic, commercial and industrial use, with the potential to raise thermal efficiency to combined-cycle level and beyond. • Advanced aeroderivative gas turbines. • Integrated NGL extraction. • Integrated waste heat recovery. • Gas and liquid expanders. • Minimized plot space requirements through equipment modularization. • Inlet air cooling of gas turbines. • Minimized flaring. To discover additional reasons why you should choose the ConocoPhillips Optimized Cascade® Process, please contact us at: Web site: LNGlicensing.ConocoPhillips.com e-mail: [email protected] phone: 01-713-235-2127 Continued on page 14 > All the reasons. All the confidence. 12 GAS Today / November 2010 © ConocoPhillips Company. 2010. All rights reserved. Optimized Cascade is a trademark of ConocoPhillips Company. Urban renewal and the quest for improved thermal efficiency in buildings offers wonderful opportunities for this application. We would hope that the development of communities such as the transport oriented developments proposed for the Adelaide metropolitan area would use this proven technology, which is freely available. Reforming regulation Apropos the matter of recent proposals with respect to regulation, I must admit to a limited understanding. The point I would make however is that regardless of the outcome of the Petroleum Resource Rent Tax review, it should, in my view, be aimed entirely at the LNG export component of production. We are constantly assured that LNG exports are vital to our future prosperity and that the global market will become immense. Luckily, we have a vast (and growing) natural gas resource and should be able to support the local market – currently around 1,250 petajoules per annum (PJ/a) – and the growing export market, which some commentators seem to think may reach 5,000 PJ/a by 2020. It is to be hoped that the Government will acknowledge that the multi-million dollar liquefaction plants are solely for the Specialist Gas Testing Services Coal Seam Gas Natural Gas LNG LPG Biogas Leeder Consulting offer an extensive range of analytical services to meet all your Gas Testing requirements. With access to leading technology, our experienced chemists will work with you to develop the most appropriate sampling and analysis program. 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Fuelling the future Finally, (and here he goes again, I can hear some saying!) in a country starved of oil, and which imports, in net terms, of the order of 1,000 PJ/a of crude oil and refined products, costing $15–30 billion annually, should we not be moving actively towards the introduction of natural gas as a major component of the transport fuel mix? To put the costs into perspective, with the exception of aviation, all transportation could be fuelled for around $7.5 billion using natural gas exclusively, and all concerns about security of supply would disappear! Returning to the subject of the new Labor Government and what it might mean for the natural gas industry, let me quote the Minister for Resources, Energy and Tourism Martin Ferguson, in his “Foreword” to the 2009 and 2010 Energy in Australia reports: “The energy sector has a critical role to play in meeting our nation’s basic social and economic needs, with energy security being vitally important. It underpins every form of our economic activity, powering our industries, our vehicles, our workplaces and our homes. “Against a strengthening global economic backdrop and increasing demand for energy exports, Australia must continue to address the issue of domestic energy security.” Paradoxically, in my view, we are repeatedly told that it is not the role of the Government to “play favourites” and we must allow “the market” to sort it out. I cannot accept this easy escape from a fundamental responsibility. There are a number of influential groups within the energy industry, each with deep rooted vested interests which do not necessarily coincide with the best interests of the nation. Their views must remain subservient. Governments are responsible for setting sound policy. Setting sound policy is leadership; it is not playing favourites. Australia desperately needs, and deserves, a clear, all embracing energy policy (something it has never had) with clear environmental, social and governance imperatives. The nation’s vast natural gas reserves offer the environmental and social solutions. Let us hope the Gillard Government will provide the vital governance framework. a part of your logistics pipeline ERHP 5/21 Whether it’s Breakbulk or Rolling Cargo, WWL has the specialised Ocean Liner Services vessels to handle your valuable and time sensitive equipment. Contact our Customer Service Hotline on 1300 885 995 or one of • Europe to Oceania • West Coast USA to Oceania • East Coast USA to Oceania • USA Gulf to Oceania • South America to Oceania • Trans Tasman • Australian Coastal • North Asia to Oceania • Oceania to Asia, Europe & Americas our Breakbulk Specialists below. www.2wglobal.com With frequent liner sailings and an Oceania market presence of over 110 years, WWL’s global delivery network is there to support the oil and gas industry. With a fleet of modern and flexible RoRo ships, WWL is committed to greener shipping and optimal logistics solutions. Ocean Transportation – Supply Chain Management – Inland Distribution – Technical Services – Terminal Services Auckland +64 9 356 2387 Brisbane (07) 3000 7850 Sydney (02) 9200 2138 Melbourne (03) 8605 8055 Adelaide (08) 8341 0466 Fremantle (08) 9239 8951 Short-term gas trading market begins operation Gas to Energy Solutions. FP Ad 1/21 Talk to the experts. Following its official launch by the Australian Energy Market Operator on 1 September 2010, the short-term trading market is making a significant impact on the way the Australian gas industry operates. Gas Today spoke to an industrial user and a retailer about the changes to the market. T he short-term trading market (STTM), is a transparent wholesale spot market for the trading of natural gas, which will determine daily market prices and a timetable for gas deliveries from pipeline transmission users and hubs. The market is currently operational in Sydney and Adelaide, with Brisbane to join in 2011. Increasing competition, decreasing costs Australian Energy Market Operator (AEMO) Chief Executive Officer and Managing Director Matt Zema says “The STTM is a key step in gas market reform that will improve transparency, efficiency, and competition across the gas sector in New South Wales, South Australia, and Queensland (for 2011). It provides clearer price signals, incentives for efficient management of resources, and enhanced market liquidity.” Adelaide Brighton is an industrial end user of gas, and General Manager Commercial Michael Williams says that the STTM “provides us with the opportunity to reduce our annual gas costs by buying a proportion of our gas from the STTM when prices are low relative to long-term contracts.” Mr Williams says “These low prices are expected to occur during the mild seasons of the year when there is a surplus of gas. Conversely, there will be times of the year when gas demand is very high and at these times there is the opportunity to sell gas that is excess to our operating requirements. “From an operational perspective, the STTM places increased importance on our capability to accurately forecast our gas consumption one day ahead. The STTM requires additional management of costs and risk management processes; however, the cost of the additional management processes is recovered quickly through the cost savings,” Mr Williams says. From a retail perspective, the new market, which integrates AEMO’s roles as both the retail market and wholesale market operator, offers an opportunity for a “more integrated interface to deal with as participants,” says AGL Manager Gas Market Development George Foley. Mr Foley says that while the market is an ex ante market, there is provision for Continued on page 18 > Our in-house engineers have over 100 years of combined experience in the implementation of power generation equipment. This, coupled with being the exclusive distributor of GE Jenbacher’s gas engines is unique in the industry today. 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The STTM enables a mechanism to easily match sellers who are long term and looking to sell gas at attractive prices to buyers. “One benefit of the market is that large industrial gas users can offset the increasing gas prices of their long-term supply arrangements with the ability to purchase some of their gas requirements at lower prices when demand is not high. “Whilst the market prices are unlikely to be able to be effectively used by large industrial users when seeking long-term supply contracts, it does provide the opportunity for large users to manage their own gas requirements and seek to reduce costs by having at least a partial exposure to the market price.” Mr Williams remarked that another strength of the market is that it provides transparency. “Historically, the gas industry has tended to function as a close knit industry with very little transparency. “Gas users have not been in a strong position in terms of information and options when going into long-term contract negotiations with major gas suppliers and, as a result, long-term gas contract prices have probably been higher and less flexible than they could have been. The STTM has created far greater transparency of the gas market, will encourage new gas entrants, and will produce more efficient outcomes than the previous bilateral arrangements.” Room for improvement? Mr Foley suggested that “the rigid manner in which trading rights are registered may mean a slight loss of portfolio diversity for the industry as a whole.” Mr Williams and Mr Foley agreed that 3 Great Companies working together on a Cure for the introduction of user-to-user market schedule variations (MSVs) would help to contribute towards the STTM’s continued efficiency. Mr Williams said that “MSVs – transactions to balance gas between participants after the gas day has finished – are traded bilaterally. All parties benefit from undertaking MSVs and we would like to see a mechanism whereby these can be traded and settled via the STTM rather than requiring a separate bilateral negotiation and settlement with each participant on each gas day.” FP Ad 2/21 Disaster Prevention A gas market for the future The process of changing any of the key features of the STTM is prescribed by the National Gas Law and National Gas Rules. AEMO and participants can propose changes to the features of the market. To this end, AEMO established an open consultative forum (the STTM Consultative Forum), which is one vehicle to consult with industry on STTM development issues. “In this way, progress will be made in a consultative way, which has been important in the development and implementation of the STTM for commencement, and will be important in the future development of the market,” says Mr Zema. by AMOT With over 60 years experience in the Oil & Gas sector, Macquarrie’s expertise backed by Murphy and Chalwyn components is delivering results that cuts costs and helps prevent disaster. Frombasicannunciationandcontrolsolutionstomoresophisticatedsystemsutilising programmablelogiccontrollers,wespecialiseinworkingcloselywithourcustomersto developcustomisedsolutionsthatfityouruniqueapplicationneeds. RELIABLE POWER FOR DEMANDING APPLICATIONS If your business is building or operating oil and gas production facilities, you need a reliable supply of prime and essential services power. 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CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. 18 GAS Today / November 2010 Energy Power Systems 1852-1010 Design Post (03) 9899 3100 Speak to a Project Engineer at Macquarrie to discuss a preventative solution to help protect your assets, employees and environment. Ph: (03) 9358 5547 Negotiating Australia’s first LNG export contract Australia has been supplying Asia with LNG since 1989. Gas Today interviewed former Shell lawyer Shane McCarthy, now retired, about his experience negotiating the contract that delivered Australia’s first ever LNG exports. S hane McCarthy started his career with Shell in 1971 after completing his law degree at the University of Melbourne in 1963. In 1978, Shell posted Mr McCarthy to London, where he worked on ship chartering, oil trading, and natural resource development, in particular LNG. It was here that Mr McCarthy gained a basis of experience in negotiating LNG sales contracts. “I worked on the Brunei and Malaysian projects in 1980. At that stage, the first Malaysia LNG Project was getting going and I helped develop a sale and purchase agreement with the buyers, getting it in final shape to go to the board of the Malaysia LNG company.” In 1979, the sellers from the North West Shelf Project were starting to develop a relationship with some Japanese buyers, who eventually came up with an eight-buyer consortium: Tokyo Electric Power, Chubu Electric Power, Kansai Electric Power, Chugoku Electric Power, Kyushu Electric Power, Tokyo Gas, Osaka Gas and Toho Gas. “I started advising on the Memorandum of Intent (MoI) from London in that year, and when I moved back to Australia, I brought the first draft of the contract with me,” Mr McCarthy says. The MoI was signed on Bastille Day, 14 July 1981. Gas on the North West Shelf In the 1970s, the North West Shelf Joint Venture (NWS JV) participants discovered vast quantities of natural gas and condenContinued on page 22 > GAS Today / November 2010 Shane McCarthy, 2010. The North West Shelf Venture participants today are BHP Billiton Petroleum (North West Shelf), BP Developments Australia, Chevron Australian, Japan Australia LNG (MIMI), Shell Development (Australia), and Woodside Energy as operator Currently, all participants have an equal one sixth share in the project. The North West Shelf Gas Project LNG processing facilities. Image courtesy of Woodside Petroleum. 20 FP Ad 3/21 Shipping Upon Mr McCarthy's retirement in 2004, he was offered passage to Japan on board an LNG tanker. sate on Australia’s northwest continental shelf. The first development of the NWS Gas Project began in 1980 with the construction of the Karratha Gas Plant and a jetty for the loading of LNG and condensate. Domestic gas supply from the project to Western Australia began in 1984. In 1985, Woodside began construction of the first two LNG processing trains and four LNG storage tanks at the Karratha plant. The first LNG train was commissioned in 1989, and four additional trains have subsequently been brought online. Process of negotiation Mr McCarthy’s visits to Japan during the negotiations ranged from a few days to up to six weeks, and were an intense mix of work and socialising. He quotes an American colleague who said, “We work hard, we play hard, and one justifies the other." Because there were eight buyers and, ultimately, six sellers, the Japanese recognised that having representatives from every buyer would be unwieldy. The buyers were jointly represented by just four companies, called the secretariat buyers. So meetings consisted of the secretariat buyers, the sellers, Mitsubishi & Mitsui as sellers' helpers, and Nippon Oil as an advisor to Chevron. Negotiation meetings usually involved a roomful of 30–35 people. At the buyers’ request, the sellers were represented by one speaker. A total of 48 separate contracts were 22 GAS Today / November 2010 negotiated between the parties, though Mr McCarthy says they were almost identical and in practice, they functioned as one. He says that initially, buyers were mistrustful of negotiating with sellers from a joint venture. For contracts on previous projects, buyers would deal with a company set up to sell the LNG. The Malaysia LNG Project set up a separate company to market the LNG, so the buyers dealt only with one seller. “It took until 1985 to sign the contract because we were not just drawing up a contract, we were developing a relationship, and we wanted to make the document as good as the relationship.” The original NWS LNG contracts has a price clause which looks forward to negotiation when deliveries would start, and eventually the sellers developed a series of rolling five-year price contracts. The details of the price contracts, Mr McCarthy said, were too confidential to talk about with us. “Mostly, when commercial things like price were under negotiation, the number of people in the room diminished dramatically. “They said to the lawyers, ‘You can go and have a holiday.’ So we did! A lawyer from BP and I went down to Kamakura for the day.” The first big point of negotiation, Mr McCarthy says, was the shipping arrangements. The MoI had left open who would do the shipping, and the sellers recognised that there was a Japanese interest in shipping. Mr McCarthy says the main concern when negotiating the shipping of LNG is timing. “In the past, iron ore had been sold on a free-on-board basis. Buyers send their ships to the port to load the product. If they don’t want the iron ore, they don’t send the ships. “That would be intolerable in an LNG project, where everything works to extremely fine tolerances. So we wanted to be able to control the shipping,” he says. “Our original preference was for CIF shipping – cost, insurance and freight.” Under CIF, the seller loads the product onto a ship, and the ship owner issues the seller with a bill of lading, which acknowledges that goods have been received on board as cargo. The ship owner acts as custodian of the product on the voyage, and the transfer of the bill of lading then transfers ownership of the cargo from seller to buyer at some point during or after the voyage. “But the buyers said, ‘We don’t have a relationship with the ship owners, so we want you to bring the gas to our ports.’ “That kind of a sale is called an exship sale, which means the buyer takes delivery when the product is discharged from the ship.” The buyers’ interest in shipping was satisfied by a complicated arrangement for providing ships through charter parties. Japanese ship owners chartered two ships into the NWS project and they became the sellers’ ships, and both the ships were built in Japan. FP Ad 4/21 • CSG drilling & completions • coil tubing unit • gathering systems • compression & process facilities • pipelines • fabrication • water desalination & pumping stations • water & sewage treatment plants • micro tunnelling Will you marry us? Gas liquefaction was a proven technology by the 1960s, with Malaysia LNG and other suppliers already supplying gas to Japan, and further projects proposed in the Middle East, Indonesia and Canada. Mr McCarthy explains that other projects were not necessarily competitors to NWS LNG. “Because of the nature of the MoI and the commitment it involved, there wasn’t competition in the sense of people beating at the door, looking for the same tranche of business.” Continued on page 24 > Energy & Infrastructure Specialists P: +61 7 3292 0800 “Once we’d signed the MoI, we knew that unless something serious broke down, we would have a deal.” Mr McCarthy calls the contract a sort of marriage, and the MoI was “like an engagement.” This commitment was expressed to Mr McCarthy on a number of occasions during negotiations. “I rode from the airport with one of our Mitsubishi advisors, and on the way we started talking about the process and the project and where it was at, and so on. “The Mitsubishi advisor said to me ‘You know, they’re not really negotiating the contract with you. They’re negotiating to get to know you better.’ “After one meeting in the early 1980s, I was standing outside a lift with one of the Japanese representatives and I asked him how the North West Shelf contract was shaping up compared with the deal they were working on for Dome Petroleum’s Western LNG Project in Canada. “He said, ‘Compared with the Dome project, we have one divorce, one marriage.’ And I knew which was the marriage! “It didn’t mean that we didn’t have a hard negotiation on every word in the contract. It’s probably the most comprehensively and thoroughly negotiated contract I’ve ever worked on. “It took until 1985 to sign the contract because we were not just drawing up a contract, we were developing a relationship, and we wanted to make the document as good as the relationship,” Mr McCarthy says. “The spokesman for the sellers addressed the group at one point and said, ‘Before we were two teams negotiating one contract. I can say now that we are one team.’ And boy, did the Japanese like that. The relationship was solid. “It still breaks me up to think about – the negotiation was a very emotional process.” Mr McCarthy uses the Brunei LNG Project to illustrate the strength of the seller-buyer relationship with Japanese clients. Offtake from the Brunei project was contracted to TEPCO and Osaka Gas at a fixed price in 1969, as opposed to the NWS contracts, which had five-year rolling price contracts. “In 1973, the first oil shock occurred and the price of oil went through the roof. LNG prices are very strongly linked with oil prices, and so the Brunei project was left basically stranded because it was on a fixed LNG price. “But, the buyers and the seller came together and the buyers agreed to an increase. They didn’t have to, but they did, because the Japanese don’t like contracts or relationships where there is one winner and one loser. They like it to be mutually beneficial – win-win.” Today Mr McCarthy says the biggest change in the LNG market now compared with the 1980s is the development of a spot market. “We had some occasional spot sales of LNG; the biggest customer was Enagas, the Spanish company. At one point we were supplying 10 per cent of Spain’s gas requirements.” The NWS project has also supplied LNG to Louisiana, USA, to Korea Gas Corporation, to Turkey, and to other Japanese buyers as well. Mr McCarthy’s advice to companies looking to negotiate future LNG supply contracts is to be honest. “Honesty is so important if you’re building a relationship based on trust. There is even a clause in this contract referring to trust and understanding. That is very uncommon in Western contracts, but it reflects the fact that we were negotiating a cross-cultural relationship.” HYDROSTATIC TESTING SERVICES GFR for BIG Solutions in GAS! 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GFR Group Services include: FP Ad 5/21 • CSGgasgatheringandwatermanagementHDPEpipelines • FastFusionandConventionalWeldingtechnology • Trenching–“Chainsaw”RocktrencherandConventionalExcavation • SpecialisedMethaneReleasevalvesforCSGwaterlines • CustomHDPEfabricationsandmanifolds • DamandPondlining • Tanks–FabricatedHDPEorSteelwithliner • Dripperlinesystemsforagriculture/beneficialwaterre-use • Reinjectionbores • SupplyandinstallationofROplants Learn more at www.gfr.com.au GFR Perth Head Office e: [email protected] p: 08 9250 2944 w: www.gfr.com.au • • • • • • UNDERGROUND AND ABOVE GROUND PIPELINES FACILITIES TESTING PIGGING, CLEANING & DRYING MOBILE TESTING LABORATORIES NATA ACCREDITED TEST PERSONNEL 400-1600 CFM DESICCANT / REFRIGERANT DRYING UNITS • 40000 kPa TWIN RANGE PRESSURISATION PUMP NON DESTRUCTIVE TESTING • • • • • API 653 TANK INSPECTIONS PRESSURE VESSEL & SRV INSPECTIONS GAMMA & X-RAY FACILITIES ULTRASONIC INSPECTIONS MAGNETIC PARTICLE INSPECTIONS MACKAY OFFICE Mr Peter Nelson Ph. 61 (07) 49525500 Fax 61 (07) 49525511 Email: [email protected] 24 GAS Today / November 2010 ROCKHAMPTON OFFICE Mr Brett Nelson Ph. 61 (07) 49264744 Fax 61 (07) 49264788 Email: [email protected] HYDRO NATA Accreditation: 12649 You can also contact GFR Group’s other offices: GFRMelbourne GFRDarwin GFRPilbara e:[email protected] e:[email protected] e:[email protected] m:0400250442 m:0400240478 m:0400240409 p:0393907302 p:0889472797 p:0891891166 See our web site for more details www.axsndt.com.au Design · Supply · Install The Darwin LNG Plant. the right person can transform a business LNG high on the agenda in the Northern Territory LNG export projects represent a significant commercial opportunity, a fact that the Northern Territory Government well recognises. Gas Today spoke to the Northern Territory Government about how it is working to develop the industry. N orthern Territory Chief Minister Paul Henderson has said that the Ichthys LNG project, together with the existing Darwin LNG project, will underpin the Territory’s economy for decades to come. But these two projects only represent the start of an LNG industry in the Territory. Along with proposed projects like the Tassie Shoal Methanol Plant and LNG Project, floating LNG (FLNG) technology presents a significant opportunity. Northern Territory Minister for Primary Industry, Fisheries and Resources Konstantine Vatskalis has even said that the Northern Territory could become “the floating LNG capital of the world”. “Within ten years...[the Northern Territory] could have five to seven FLNG projects under development or in production,” says Mr Vatskalis. In order to further LNG investment, the Territory Government is working to support the industry on several fronts. Working with businesses The Territory operates a wholeof-government taskforce for LNG developments. This taskforce approach aims to identify and resolve issues early, and to help proponents understand local requirements and expectations. It also provides a strong mechanism for information sharing and accountability. The Department of the Chief Minister leads co-ordination of engagement between proponents and relevant government agencies. As an example of this business engagement, the Department of Business and Employment and the Department of Education and Training are working 26 GAS Today / November 2010 with INPEX to prepare for the training needs for its Ichthys LNG construction workforce. This will be followed up on completion of the development with engagement in relation to the operations workforce skills needs. The Northern Territory Government also says that it provides a greater level of regulatory certainty for proponents than other Australian jurisdictions. Notably, there is no third-party appeal embedded in the Territory’s environmental assessment process. Onshore infrastructure The Middle Arm Peninsula of Darwin Harbour, which hosts the Darwin LNG Plant, has been reserved for industrial development. Aside from its proximity to a deep water harbour, making it wellsuited to accommodate LNG tankers, the site includes nearby gas pipeline infrastructure, port infrastructure for project cargoes, and good road and rail connectivity. These factors make it a particularly attractive greenfield development site, says the Territory Government. The first stage of a Common User Facility has also been established in the Darwin Business Park, adjacent to the East Arm Wharf. The facility now enables local industry to participate in larger fabrication projects by amalgamating smaller fabrication modules for load out over the East Arm Wharf. The Common User Facility will also cater for a range of demands, including short-term lay down for resource projects. Looking for more offshore The Northern Territory Government sees the potential rise of FLNG projects in the region as an opportunity rather than a challenge. There will be a synergy with existing businesses supporting and servicing both offshore oil and gas production and onshore LNG production, the Government says. It plans to align existing initiatives to grow the supply and service industry with the FLNG industry as it establishes and expands. It foresees that an increasing number of FLNG projects and their cooperation with onshore LNG projects will build a critical mass for an everincreasing number of specialised support industries. Meet the market The Chief Minister, along with other cabinet members, has made numerous visits to Japan and China to promote investment and exploration opportunities in the Territory’s energy and minerals sector. The Territory Government believes that to attract investment from these markets, government support is an essential element for success. In order to promote the local resources sector supply and service industries, the Government has also organised and lead delegations to overseas markets and trade expos. On a recent roadshow promoting business and investment, Chief Minister Paul Henderson highlighted the Territory’s advantages for potential LNG production and export projects, noting that “our proximity to Asia is a key and critical difference to the rest of the country, as is our size – we are small enough to make it easy to make things happen.” We are the experts in recruitment for the oil and gas industry. Our global network of consultants provide recruitment solutions across the entire oil and gas project life cycle from exploration, project development and construction to asset operations and maintenance. With Hays, you have a recruitment partner that understands and effectively services all aspects of your business. Our expertise, combined with the world’s most extensive database of candidates and fast, accurate response ensures that we bring the right people to you. That’s why, for over 34 years, Hays has powered the world of work. FP Ad 6/21 We are recruiting experts in: • Geoscience & Petroleum Engineering • Project Design & Development • Subsea & Offshore Engineering • Construction • Asset Operations & Maintenance • Equipment Manufacture, Supply & Service • Trades & Labour • Corporate Services contact your local hays oil & gas office: perth T: 08 9226 5766 E: [email protected] melbourne T: 03 9670 2066 E: [email protected] sydney T: 02 9249 2299 E: [email protected] brisbane T: 07 3137 6400 E: [email protected] adelaide T: 08 8212 5242 E: [email protected] Wellington T: +64 4 473 6860 E: [email protected] hays.com.au Safeguarding the Queensland CSG industry Wood Group Wagners Integrated Solutions for CSG By Stephen Matheson, Chief Inspector Petroleum and Gas Inspectorate, Queensland Government As industry activity expands significantly to cater for the emerging export LNG industry in Queensland, issues about the safe operation of CSG wells, facilities and pipelines have been expressed within the community. FP Ad 7/21 C oal seam gas (CSG) activities – including exploration, appraisal and development – first began in Queensland in the 1980s, and CSG has been safely produced in the Bowen and Surat Basins for the domestic eastern seaboard market since 1996. This increased activity brings its own set of challenges in the areas of health and safety to address community concerns. The CSG industry has grown sharply in recent years, with more than 2,700 coal seam wells now mostly located in southwest Queensland. Keeping Queensland safe The Queensland Government regulates health and safety in the petroleum and gas sector and is working with industry to address safety concerns raised by the community. For example, there has been a full safety audit of all CSG wells, and community forums have been held in relevant regions to talk to landowners about the industry, and the government is deploying additional petroleum and gas inspectors throughout the state. Wellhead inspection program Earlier in 2010, the Queensland Government ordered all CSG producers to review their operations, to ensure their gas wells and associated equipment meet appropriate health and safety standards. Under the program, all CSG producers were required to do a re-inspection and risk assessment of all existing wellheads and report back to the Government. The preliminary report released in July 2010 found that more than 2,239 individual wells, or 95 per cent, came back absolutely clear of any safety issues. While small leaks were detected in the remaining 5 per cent of wells, none have been found to pose any threat to public health and safety and all are operating within national health and safety standards. 28 GAS Today / November 2010 Wood Group Wagners Pty Ltd are a recognised industry leader in the field of CSG production with extensive knowledge and proven capabilities, offering clients performance based solutions in the following areas: CSG well safety inspections. Drilling & Completions The Petroleum and Gas Inspectorate is currently completing the final wellhead safety audit report and this is expected to be released in the near future. New recruits The Queensland Government is investing an additional $14.6 million over the next four years to substantially increase the number of Petroleum and Gas inspectors throughout Queensland. In 1985, there were a total of 12 inspectors, a number which has increased only to 15 in 2010. As of 30 August 2010, six additional Petroleum and Gas inspectors have been employed by the Queensland Government. Two new recruits are based in Toowoomba and Bundaberg to increase the Government’s regional coverage. The remaining four are stationed in the Brisbane Southern Regional Office where they will significantly increase the Inspectorate’s capacity to service the whole Southern Region; including monitor compliance of CSG activities in the Surat Basin. The Department is currently recruiting an additional two inspectors to be based in the Dalby and Roma districts. Further, an additional Principal Inspector position was also advertised and a dedicated full time investigator is also being recruited in the second half of 2010 to assist inspectors with significant compliance investigations. This recruitment drive will increase the number of State Government Petroleum Supply Chain & Logistics Engineering and Gas Inspectors working throughout Queensland to 24. This expanded inspectorial service will enable a higher level of inspection, audit and investigation activity to work with industry on compliance issues. Project Management Wood Group Wagners Operations & Maintenance Safety for the future Activities in the CSG area are set to increase as project proponents gear up to meet commercial supply contracts which, in some cases, start from 2014. The Petroleum and Gas Inspectorate duties include the administration of petroleum and gas operations from exploration and production through transmission, reticulation and all forms of domestic and commercial use. The Government is taking action to put in place additional inspectors to ensure the safety and health of this expanding workforce and to have people on ground in the regions where they are needed. The Queensland Government is committed to maintaining the health and safety of the petroleum and gas industries and the community as these industries continue to grow. Geographic Information Systems Health, Safety, Environment Compliance Production Water Management Ph: 07 3258 8001 Brisbane Head Office The reverse osmosis option As coal seam gas developments come under closer scrutiny than ever before, water management becomes a major concern for developers. However, the produced water stream can become a revenue stream through reverse osmosis treatment. C orporate social responsibility, stakeholder issues and now Queensland legislation mean that water treatment options are a key consideration for coal seam gas (CSG) developers. Desalination of the brackish water extracted can be achieved through a number of methods. The most common processes fall into three categories; membrane, chemical or thermal. Reverse osmosis (RO), a membrane technology, provides the finest level of filtration available, says RO plant developer and operator Osmoflo. It removes 95–99 per cent of dissolved salts, inorganic molecules and organic molecules with a molecular weight of greater than 100. It also removes 98 per cent of residual biological and colloidal matter from the feed water. Salinity of CSG water varies greatly, from drinking quality – less than 500 milligrams per litre (mg/L) – to more than 10,000 mg/L. Typically, CSG water contains between 1,500–10,000 mg/L of dissolved solids. How does it work? Osmosis is the tendency of water to flow from a purer solution through a semi-permeable membrane into a more concentrated solution, equalising the solute concentration on either side of the membrane. Solute molecules do not naturally pass through the membrane. Pressure can be used to reverse the natural course of osmosis. As such, RO involves applying pressure to brackish water to make it pass through a membrane, removing solutes. Depending on the quality of the water, which varies considerably across sites, pre-filtration by other technologies also may be used in CSG water desalination plants. This ensures that larger particles that could damage the RO membranes are filtered out. Considerations Key issues in the installation of RO plants relate to water quality and variability. Water contaminants, which include silica, iron and hydrocarbons can all affect the performance of the system, as can extracted water temperatures. The 30 GAS Today / November 2010 Above: Diagram of Osmoflo’s RO plant at Roma. Left: Osmoflo’s RO plant at Roma. changing nature of water volumes over the life of the project – increasing then decreasing – also needs to be considered. The remote location of CSG fields can also pose a challenge. The use of modularised plants can help minimise onsite construction and commissioning activities, says Osmoflo. Compared to other desalination technologies, Osmoflo believes that the disadvantages of RO are negligible, a result of new innovations in energy recovery and brine minimisation. The advantages, aside from the fine level of filtration, include its ability to treat very large volumes of water very effectively, its small footprint and its cost-effectiveness. Existing plants Testament to the flexibility of RO in the treatment of CSG water is the diversity of its existing applications in Australia. Veolia installed water treatment systems at the Condamine and Braemar 2 CSG power stations in Queensland. The plants combine a number of purification processes with RO, including clarification and microfiltration at Condamine and ultrafiltration and continuous deionisation at Braemar 2. The water has a variety of uses, including cooling tower basins, potable water, process water and demineralised water for boiler feed. Osmoflo built and operates the 5.5 mega litres per day (ML/d) RO plant at QGC’s Roma CSG fields in Queensland. The plant uses oxidisation of iron, microfiltration and RO. The treated water is used for irrigation. In August 2009, Impulse Hydro was awarded a contract to provide RO to Eastern Star Gas’ Narrabri CSG project in New South Wales. Previously, produced water at Narrabri had been disposed of using evaporation ponds, which was common in early CSG projects. As such, the RO system was installed in a way that would accommodate water from existing evaporation ponds as well as water straight from the well. FP Ad 8/21 Prepared for anything. Water reuse When constructing RO plants, it is the desired end use for the water that determines the level of filtration. Water treatment can be tailored to client needs, be they municipal or industrial. Treated CSG water can be used for a range of purposes, depending on the purity of water the client specifies. Given the often remote location of CSG projects, one of the key issues is the cost and infrastructure needed to transport water for use other than at the immediate location, says Osmoflo. As such, water produced at CSG sites will tend to be used for irrigation, for general use onsite, or fed into local streams. Dräger X-zone 5000: reacts to up to six gases. State-of-the-art area monitoring - the Dräger X-zone® 5000, in combination with the Dräger X-am® 5000 or X-am 5600 gas detection instruments, can be used for the measurement of up to six gases. This easily transportable, robust and water-proof unit extends mobile gas detection technology to a unique system with many applications. Call 1800 67 77 87 or visit www.draeger.com for more details. Enerflex open for Brisbane business In July 2010, Enerflex launched a new Brisbane manufacturing facility, located at Trade Coast Central, Eagle Farm, Queensland. The new facility will become the company’s first dedicated re-packaging and reassembly facility outside of North America. E nerflex General Manager Chris Lewis, President and Chief Executive Officer Blair Geortzen, Managing Director AustralAsia Steve Dropulich, President International Bill Moore, Executive Director AustralAsia Kelvin Andrijich, and Queensland Minister for Natural Resources, Mines and Energy Stephen Robertson were present to celebrate the facility’s opening. Mr Robertson gave a keynote address and congratulated the company on its success. In particular, he acknowledged Enerflex’s involvement in the development of the coal seam gas (CSG) industry in the east coast of Australia. On the back of the huge market opportunity driven by the burgeoning CSG-fed LNG industry in Queensland, the differing regions of Enerflex collectively and collaboratively designed the facility to suit the expected quantity and specification of the compressor packages to be delivered to their customers. 32 GAS Today / November 2010 Furthermore, the size and configuration of the facility allows Enerflex to leverage off this core competency and further supply triethylene glycol and process equipment packages, undertake revamps and compressor optimisation and execute fabrication and assembly works as part of turnkey and integrated projects. The new facility features 2,000 square metres (sq m) of office area with an option to expand a further 1,000 sq m to house their teams. The office has been designed keeping in mind the dynamic nature of Queensland’s work styles and workforce. The workshop has a floor area of 3,650 sq m to support the range of services and workshop functions required by Enerflex. This includes overhead cranage, welding and fabrication capabilities, vehicle access, stores and associated support infrastructure. As part of the company’s ongoing commitment to pioneering best practice, Enerflex is the first company in Australia to be awarded a 4.5 GreenStar rating by the Green Building Council of Australia using a pilot tool developed specifically for the industrial sector. The GreenStar system evaluates the environmental attributes of the built space and allows for benchmarking across the sector. Some of the sustainable initiatives included the use of recycled rubber (including that from used tires) in lieu of carpet, an operable louver system to manage radiant heat whilst maintaining views, recycled water for sanitary use and irrigation, minimal use of PVC and materials with a low volatile organic compound content, as well as energy efficient lighting and air conditioning systems. “Enerflex’s continued, demonstrated leadership in design and construction will set the standard for Australia’s natural gas industry going forward,” says Mr Andrijich. enerflex 9/21 Global support for local CSG industry Global Oilfield Services subsidiary Global Artificial Lift is a leading electric submersible pump supplier for the coal seam gas market in the United States of America with an install base of over 5,000 systems. The company recently opened a Brisbane office to service Australia’s burgeoning CSG industry. Proven Technology for Australia’s CSG Challenges Global Artificial Lift now has sales, service and technical support personnel located in Australia to provide tangible solutions to the challenges of our customers’ coal seam gas wells. In the past 25 years, Global Artificial Lift has worked on more than 5,000 wells in support of the Wyoming Powder River basin coal seam gas business. Now, our experienced personnel bring their innovative solutions and industry focus to meet similar challenges in Australia. M embers of Global Artificial Lift’s unconventional gas division have been actively involved in coal seam gas (CSG) since 1982. This vast experience base covers dewatering vertical and horizontal wells and the company has developed unique processes and procedures to deal with the challenges of these applications. Challenges of CSG Since 1982, there has been a very steep learning curve with dewatering CSG wells. Most of the expertise initially came from the oil industry. It became apparent early on that the same technology that had been proven in the oil industry was not applicable to CSG challenges. The mechanical differences and associated challenges of CSG production – including dealing with solids, turbulent flow conditions, gas locking, pulling the water down below the bend of a horizontal well, and others – demanded products and service changes to meet these differences. It was also apparent that the economics of CSG were very different from the oil industry and therefore using the same products were cost prohibitive. Global has met the mechanical and the economic challenges by developing specific costeffective products and developing new processes and procedures for this industry. A new product for a new industry For many years electric submersible pumps (ESPs) had been viewed as products best suited for high volume wells, and are still excellent pumping platforms to accomplish that. Due to years of experience and development, Global has developed CSG systems that are also capable at low levels of production – down to 50 barrels per day. This product development has led to industry-changing solids control both at the time of drilling and in existing Applications • Coal seam gas wells Global Artificial Lift 10/21 • Disposal water reinjection Benefits • Downtime minimized with fast service and efficient, reliable operation • Fine solids plugging effectively controlled • Gas locking eliminated by enhanced gas separation Global Artificial Lift's electric submersible pumps. wells. Products have been developed and patented for unique gas bypass systems that considerably reduce the risk of gas locking and increase gas production by drastically reducing the amount of free gas lost with the water during the dewatering cycle. Reinjection of the produced water has become a paramount environmental issue and systems have been developed that include being able to reinject water without ever bringing it to surface or creating a closed loop so as not to allow oxygen back into the system. Supporting CSG One of the most important things that has been learned since 1982 is that every basin can be different, every field can exhibit its own set of challenges, and we are going to learn something new that can be applied to applications somewhere else. The CSG industry appears straightforward on the surface but has at times baffled the most experienced. We have also learned that bringing high cost oil field equipment to CSG has proven ineffective and too costly for the economic structure of CSG. A substantial amount of time and money has been invested in the development of products that specifically address the common mechanical and economical challenges faced by artificial lift. Global is excited about bringing proven and economical dewatering and reinjection products along with years of practical experience to the Australian CSG market. • Anti-corrosion and anti-abrasion options • Longer run times and reduced operations costs Features • Global Linear Lift Systems require no large cement pad, are air-transportable to remote sites, and are suitable for all kinds of wells—from conventional oil wells to gas-well dewatering. • Patented fines filtration accessories • Unique gas lock bypass option • Remote monitoring by phone, radio or data modem © 2010 Global Oilfield Services, Inc. All rights reserved. 34 GAS Today / November 2010 Artificial lift is our focus. From proven ESP technology to the Global Linear Lift System, we have the equipment and accessories to deal with the top challenges facing coal seam gas producers—solids plugging, gas locking and corrosion—that cause downtime and rob you of profits. Our experienced engineers and technicians can help you choose the right system for your specific situation—all from our Brisbane location. Our goal is to work with our customers to design the best possible solutions for the Australian coal seam gas industry with proven technology, deep experience and unparalleled service. Global Artificial Lift Level 24 AMP Place 10 Eagle Street Brisbane, QLD 4000 Australia Phone: +61 (0) 7 3303 8617 | Fax: +61 (0) 7 3303 8618 Mobile: +61 (0) 450123 699 www.globaloilfieldservices.com Value delivered, guaranteed! MERCER VALVES SAFETY RELIEF VALVES for CSM APPLICATIONS • • • • Compressors Separators Scrubbers&Dehydrators GasProductionPlants andTransmissionLines • Air,Gas&LiquidRelief ASME VIII Division 1 certified Field Proven Soft Seating Threaded½”-3”,CtoKorifice Flanged½”-4”,CtoMorifice Modulating & Snap Pilots Inletsizes1”-8”,DtoTorifice and1½”-8”FullBorerange Pressure and Safety Systems Melbourne(03)96997355 [email protected] Perth(08)92278744 [email protected] 36 GAS Today / November 2010 Safety under pressure: tendering for major projects As proving safety credentials becomes increasingly important in being awarded major project service contracts, Pressure and Safety Systems has adopted a ‘no harm’ policy. In the competitive world of tenders for large-scale pipeline project service contracts, proving your safety credentials is becoming increasingly important. L arge-scale pipeline projects carry with them significant risks to workers, contractors, equipment and assets as well as the environment. Minimising these risks through a coherent safety policy is critical to the success of these projects. In awarding contracts for the provision of services on these projects, big companies are increasingly looking to the safety credentials of its potential contractors and equipment suppliers. Pressure and Safety Systems, an Australian service partner which provides Mercer Safety Relief Valves, has adopted a ‘no harm’ policy to increase its chances of winning contracts on major projects. Engineering Manager Malcolm Reeve says “We are passionate about contributing to a ‘no harm’ environment on Australian projects when supplying our Mercer Safety Relief Valves.” Mr Reeve says that Mercer Flanged Safety Relief Valves are between 27 and 64 per cent lighter and are considerably smaller than other conventional spring operated valves, guaranteeing less physical strain on all workers involved in the fabrication of the wellhead skids, onsite commissioning of skid valves and long-term in-field maintenance of the valves. “Easier to handle valves ensure a reduced risk of injury for employees and contractors, and greater occupational health and safety compliance,” says Mr Reeve. The valves also protect equipment and assets as they are designed with a unique Pressure and Safety Systems supplies Mercer valves. spherical seat which incorporates a soft seat seal. Mercer valves are capable of surviving rough in-field handling without damage to the sealing capability of the valve and, unlike other valves, are not required to be transported vertically. Equipment downtime is also minimised with Mercer valves as they require no seat lapping when an overhaul is undertaken. Instead, a new seat is easily fitted in a very short time and the valve can be re-set and back in service extremely quickly and all to manufacturers’ original specifications. Pressure and Safety Systems also has a ‘no harm’ policy regarding the environment. As Mr Reeve notes “It is vital that as little gas as possible escapes to the environment.” Mercer valves are tested for zero leakage at 95 per cent of set pressure. Where old style metal-seated valves tend to trap particles between the disc and seat after blow-off, causing significant leakage, the unique ‘lip seal style soft seat’, ensures no loss of gas to the atmosphere even after the valve has operated many times. Pressure and Safety Systems has offices in Melbourne, Perth and Brisbane. For more information call 03 9699 7355 or visit www.pressureandsafetysystems.com.au FP Ad 11/21 Jemena is a leading national gas, water and electricity infrastructure company. We not only own major gas assets but we design, construct, maintain and operate gas transmission and distribution pipelines across Australia. Jemena – we know the difference the best solution makes. www.jemena.com.au orange is good PPI: piping CSG Hobson Stud Bolt Kits: Combining experience, expertise and strategically located manufacturing facilities, PPI knows how to service the coal seam gas industry; providing a wide range of polyethylene, pipe and affiliated products. W ith the emergence of the coal seam gas (CSG) sector as one of Australia’s fastest-growing industrial markets, polyethylene (PE) pipe manufacturer PPI Corporation is continuing to grow. PPI has supplied PE pipe to numerous CSG projects throughout Queensland and New South Wales. Among these projects is a QGC development near Chinchilla, Queensland, for which PPI supplied over 300 km of PE pipe. PPI has also supplied Delco Australia (now known as WDS Oil & Gas) with PE pipe for their contracts with Arrow Energy. Delco Australia constructed the gathering pipeline systems at Arrow Energy’s Moranbah and Dalby CSG sites in Queensland. In New South Wales, PPI has supplied PE pipe to AGL for use in the Camden area. PPI has been manufacturing PE pipes for nearly 30 years, providing pipe for water, gas, slurry, drainage, irrigation, electrical and communications purposes. The company’s PE pipe range includes: • Multiple pipe extrusion lines up to 800 mm in diameter; • Manufacturing efficiency with high quality extrusion equipment; • A full range of electrofusion and welded fittings up to 800 mm and SDR 7.4; • Specialist products like Schedule 80 PE to steel transition fittings; • Project management, production and delivery scheduling; • PE recycling capability; and, • Full quality assurance/quality control testing capability. PPI also offers a range of fittings for the expanding PE pipe market. The company’s largest production facility in Brisbane is able to efficiently service key CSG areas in Queensland as well as in the northern parts of New South Wales. As the only manufacturer of large bore PE pipe in Adelaide, PPI’s upgraded facility in South Australia is able to service the needs of the local mining industry. This site also enables PPI to competitively service Victoria and the Northern Territory. For further information contact the PPI Mining, Industrial, Civil sales office on 07 3860 0388 or email [email protected] PE Pipe: Carrying the Future’s Water & Energy PPI Metric poly pipe & fittings to 800 mm P StudBolts and Hex Bolts manufactured to ASTM A193/A193M and A320/A320M. Heavy Hex Nuts manufactured to ASTM A194/A194M. P Tested in Australia by an independent NATA approved laboratory. NATA Certificates available on request. P Accredited to ISO9001. P Material grades B7 | L7 | B16 | B5 | B6 | B8 | B8M | B8T held ex-stock for fast delivery. P Fast reliable delivery on coated items (including Mechanical Plating, Inorganic Zinc Silicate (ESSO Spec.), 1PX1 (Moly), Xylan 1424 Series - Blue & Green, Cadmium plated, Zinc Plated and Hot Dip Galvanised). FP Ad 12/21 Hobson Engineering is a leading supplier of the 3000lb and 6000lb High Pressure Fittings range to the resource and commercial industries. Hobson supply M.E.G.A quality fittings. Hobson High Pressure Pipe Fittings: P P P P P P P P P PPI Polyethylene Strength and flexibility 38 GAS Today / November 2010 PPI Corporation Pty Ltd -– Mining, Industrial & Civil Sales Phone: Sales Fax: Email: (07) 3860 0388 (07) 3860 0392 [email protected] Manufactured from ASTM A105N steel. Shell / Mobil / Caltex / Exxon approved product. Swage Nipples manufactured to ASTM A234WPB MSS-SP95-86. Seamless Pipe Nipples manufactured to ASTM A106B B36.10-95 Stainless Fittings manufactured to ASTM A182. Threads according to ANSI/ASME B1.20.1. Material according to NACE MR0175 / 2003 Lot trace number on each Fitting. Test Certificates are available on line at www.hobson.com.au. www.hobson.com.au AS/NZS 4130 Lic21212 No.9000117 quality matters The National Association of Testing Authorities ( NATA ) is Australia’s national laboratory accreditation authority. NATA accreditation recognises and promotes facilities competent in specific types of testing, measurement, inspection and calibration. Compensating for the Joule-Thomson effect By Brian Walkington, Grimwood Heating Managing Director When choosing a direct electric heater, it is important to take many factors into consideration, including the Joule-Thomson (J-T) effect. Grimwood Heating can analyse your process conditions to accurately confirm the true J-T effect based on the gas composition. What is the J-T effect? Typically, the J-T effect refers to the drop in temperature that occurs when gas pressure is reduced. The magnitude of the temperature drop depends on the starting pressure, the pressure change and the composition of the gas. The J-T coefficient, or the change in temperature per unit change in pressure, is not a constant and is highly variable for any particular gas mixture depending on the starting and ending conditions. Heat tracing Heat tracing involves wrapping a heating cable around a length of pipe to heat the pipe and its contents. Heat tracing is simple to install, requires no ongoing maintenance, and can be retrofitted to an existing pipeline. Disadvantages of this method are that it can be difficult to get fine control with variable flow, and it requires a reliable power supply onsite. Water bath heaters Under large pressure changes, the temperature of the gas or gas mixture can fall to a point where the gas or a component of the mixture starts to condense into a liquid, or in extreme cases to solidify (such as ice formation where traces of moisture exist). This can cause equipment to malfunction with catastrophic consequences. The way to prevent this is to preheat the gas before the pressure reduction so that the temperature after expansion is above the saturation temperature of components of the gas mixture. A water bath heater is typically a horizontal, cylindrical, water-filled tank with a fire tube in the bottom and a gas pipe serpentine through the water to raise the gas temperature. Water bath heaters may also be heated with hot oil. While fine control is also difficult with water bath heaters, they can operate in remote sites with no electricity supply and can use waste heat from other processes. On the other hand, they can be high maintenance, requiring repair and replacement parts. The water must be treated, and there can be issues of corrosion. All these lead to planned and unplanned downtime. Gas heating options Direct electric heating Compensation There are three main methods of heating gas flows: heat tracing the pipeline, a water bath heater, and direct electric heating. Finally, direct electric heating involves electric elements in the gas stream to heat the gas as it flows over the elements. The benefits of direct electric heating are Reliability? High. its compact size, and therefore small footprint. While this method does require a reliable source of power onsite, fine and accurate control is possible, which maximises energy efficiency, especially under fluctuating flow rates. This method also requires no ongoing maintenance, and therefore it has low levels of downtime. Minimal heat is lost during this process, and the method is flexible in location – the unit can be positioned at any angle, and can be indoors and immediately adjacent to the point of consumption to minimise ‘cold slug’ on start up. Total cost of ownership? Low. Accurate? Without a doubt. Why choose a Grimwood direct electric heater? FP Ad 13/21 Grimwood has the proven capability to design and build direct electric heaters to the highest and most stringent standards in the world. It was the first heater manufacturer in the world to obtain an International Electrotechnical Commission Explosive Certificate of Conformity for these products. Grimwood can design and build the control system to heat gas to the temperature required depending on the flow rates, and inlet temperatures and pressures without unnecessary and wasteful overheating. The company can deliver the heater with a short lead time, reducing overall project lead time and working capital investment. the most reliable, easy to maintain and cost-effective gas monitors in the world. Why? Because our innovative gas detectors and DrägerSensors are designed and manufactured by us for optimal performance. For the lowest cost of ownership of any single gas monitor, choose our long-life Dräger Pac® 5500. The new Dräger Pac® 3500 provides 2-year maintenance-free warning of H2S, CO, and O2 levels. Our reliable and easy-to-use bump test station provides workers with confidence and protection they can trust. Quality ISO 9001 ContaCt us to reCeive 1 free Dräger PaC® 3500 or Dräger PaC® 5500 for every 2 you buy.* *Limited time offer until 31st December 2010. Call 1 800-677-787 or visit www.draeger.com/gasdetectionoffer GAS Today / November 2010 pdf2146 40 Wollert Compressor Station. APA: expanding pipeline system capacity across Victoria and New South Wales From Young to Wagga Wagga, Wollert to Euroa, keeping regional Australia connected to natural gas supplies is serious business for APA Group. The company is undertaking expansion projects across its Victorian and New South Wales pipeline systems. I n 2008, construction of the Uranquinty Power Station was completed. Located on the Moomba to Sydney Gas Pipeline southern lateral near Wagga Wagga, the power station has significantly increased gas demand on this section of the New South Wales transmission system, and required expansion pipeline infrastructure to meet the increasing demand. Since then, gas usage for the power station has continued to increase and a decision to further increase to the capacity of the Young to Wagga Pipeline was made in October 2009. This will remove capacity constraints on the Moomba to Sydney southern lateral, and provide additional gas storage capacity for the Uranquinty Power Station. The existing Young to Wagga Pipeline, constructed in 1981, provides gas supply to towns in central south New South Wales including Griffith, Cootamundra, Young and Wagga Wagga. In 1998, the 18 inch Interconnect was built connecting Bomen (Wagga Wagga) and Barnawatha in Victoria, which enabled gas to flow between the two states. The Young to Wagga Looping project is designed to additional provide flexibility of supply, security of supply and gas storage. Stage 1 of APA Group’s Young to Wagga Looping project involves the construction of 61 km of 18 inch diameter gas transmission pipeline from Bomen north to Bethungra. The looping pipeline will be positioned 7 m away from the operating Young to Wagga Pipeline, with line valves at Wantiool and Bethungra, and cross tieins at Bethungra and Bomen. Construction contractor WDS Ltd has mobilised approximately 115 people to work towards the project’s completion, expected by mid-November 2010. 42 GAS Today / November 2010 Construction commenced on 25 May 2010 and has been affected by weeks of rainfall. APA has also commenced the formal approvals process for Stage 2 of the looping project, which entails looping of the Bethungra to Young section of the Young to Wagga Pipeline, and will be in a position to commence construction in approximately October 2011 if necessary. Navigating new project approval regulations The Young to Wagga Looping is the first APA pipeline project to go through the new NSW major projects approval Part 3A regulations under the Environmental Planning and Assessment Act 1979. “APA has gone through a very detailed approval process including the approval process for the Construction Environmental Management Plan (CEMP). We have also had to appoint an independent Environmental Representative for the project,” said Manager Projects New South Wales, Australian Capital Territory and Western Australia Prakash Mehta. The Part 3A approval process required preparation and submission of the Environmental Assessment Report (EAR). The EAR was placed on public exhibition, and the submissions received from the New South Wales Department of Planning were responded to in the Submissions Report. The project was approved with conditions of approval which were incorporated into a CEMP, and are being implemented during construction of the project. Construction underway Construction crews targeted a production rate in the order of 2 km of pipeline per day. Temporary facilities for the project include site office and work areas for material and equipment, workshop for equipment maintenance, a dam to store water for hydrostatic testing and borrow pits to source additional fill material if required. Access tracks and additional gates have been constructed to access the pipeline easement and work areas and existing roads, access tracks and disturbed areas have been used to minimise disturbance to the surrounding areas. Installing compressors in Victoria: the Wollert Compressor Station upgrade APA is also undertaking an upgrade of the Wollert Compressor Station, designed to expand capacity on the Wollert to Euroa Pipeline on the northern section of the Victorian Transmission System. The Wollert Compressor Station upgrade involves the installation of two Solar Centaur 50 Low NOX emission gas turbine driven compressors, fin fan after coolers, gas filters and all associated services and piping. Construction commenced with earthworks in December 2009, with completion of the upgrade scheduled for early November 2010. The two Centaur 50 compressors will supersede the existing three Saturn compressors. With each Centaur machine having more than five times the capacity – 6,102 horsepower each – of the older units, the station’s overall capacity will be increased by over three times. Provision has also been made for further compressors in the future. Following completion of the Wollert Continued on page 44> FP Ad 14/21 Compression project and the maximum allowable operating pressure pipeline upgrade project, the pipeline’s pressure limit will be 8,800 kilopascals (kPa). The new Wollert station has been designed for 10,200 kPa for potential future pressure requirements. 3D modelling software was used to virtually assemble the project before construction. APA Manager Projects Victoria Tom Carroll said “The use of 3D modelling software has allowed for the entire project to be assembled in the virtual world before any construction began.” “The benefits of this technology were apparent from early in the design phase – allowing the end users to review the entire project easily and have their input – through to construction, with the minimisation of site work as a result of highly accurate design drawings,” he said. The design of the Wollert Compressor Station was influenced by APA Asset Management and Engineering’s strategy to standardise designs nationally across all of APA’s future installations. Under the new strategy all compressor stations will be standardised across key deliverables, site layout, diverging plant configuration and equipment purchase. Process Plant Solutions • LNG Plants • CO2 Capture • Clean Fuel Technology • Scrubbers • Natural Gas Dehydration and Fuel Gas Conditioning Engineered Products • Demisters • Internals Vessel Internals • Mist Eliminators • Ejectors and Eductors Process Materials Overall the project will involve the installation of ten major equipment items, 20 km of instrument and electrical cable, 2.5 km of piping and 40 tonnes of structural steel. Approximately 10,000 tonnes of reclaimed soil and 12,000 tonnes of imported select fill were used to complete site levelling. Keeping safe Part of the design concept was to locate the new station in a greenfield site, outside the existing Wollert Compressor Station’s operating assets, thereby minimising the risk of construction personnel working in the vicinity of live plant. This had the combined benefit of allowing APA operations personnel to continue with their activities with minimal impact from construction personnel. APA’s permit-to-work system was incorporated into the project, which included completing a job safety analysis for each job task prior to any work commencing. Weekly toolbox meetings are held with the contractors, co-ordinated by the project specific safety officer, to ensure any site issues are addressed promptly and allowing a direct line of communication between the work crews and APA supervision. Design Consult Construct Install Commission Using local labour For all construction activities, local labour was utilised and the majority of plant, materials and equipment has been procured from local suppliers. However, the specialised nature of some equipment meant that some items and raw materials were sourced from outside Australia. The main piping contractor, Skinner Engineering, is located in Epping, approximately 15 km from Wollert, allowing for a greater degree of connectivity to the site. Hanson also supplied the imported crushed rock from a local quarry, which meant deliveries were timely and transport costs were reduced. New online advertising packages in Avoiding the hot tap challenge Although tie-in works were planned carefully to avoid any hot tap works, a station shutdown proved unavoidable. The shutdown plan required approval from multiple stakeholders prior to any work commencing on site. Gas needed to be sourced from New South Wales to maintain the gas supply commitments and the opening of valves to ensure security of supply to the distribution companies. The works were completed early in 2010 before the higher demand for gas brought on by the colder months. www.gastoday.com.au • Great value packages offering exposure on websites and e-news • Huge discounts on offer for multiple bookings • Fully audited readership and performance figures for advertisers FP Ad 15/21 22−24 March 22−24 March Brisbane Convention & Exhibition Centre Brisbane Convention & Exhibition Centre Australia’s whole-ofAustralia’s industry whole-ofgas event industry gas event • Catalysts Absorbents • Ceramic and Alumina Supports www.glp.com.au Phone: (03) 9335 9000 Fax: (03) 9334 5488 Email: [email protected] 44 GAS Today / November 2010 Online advertising – a great way to support your print advertising and target new readers. Contact Tim Thompson – [email protected] Gas to the max: Wollert – Euroa Pipeline gets an upgrade Comdain Infrastructure has completed works on an APA Group upgrade of the pipeline between the Wollert Compressor Station and the Euroa city gate in Victoria. T he upgrade has increased the pipeline’s maximum allowable operational pressure from 7.4 megapascals (MPa) to 8.8 MPa, and has therefore increased its gas transportation capacity into New South Wales. The upgrade project was initiated by the installation of two new compressors at the existing Wollert Compressor Station. Comdain was responsible for the supply and installation of mechanical, electrical and instrumentation works completed at the Euroa site, for future compressor installation. The company provided labour, materials, supervision, consumables, risk assessments and work procedures for main works including the fabrication and installation of all main process gas piping, valves and fittings. Comdain ensured delivery of all pipe work, piping skids, piping supports and all structural steelwork. Comdain also led the inspection and testing efforts, welding and testing recording and environmental management plans. Comdain has said that the greatest challenge faced during the works was ensuring that there was no disruption to the gas supply for the north. In order to maintain supply, a bypass was constructed at the Euroa site to enable continuous supply while civil works were undertaken onsite. Another challenge was the fabrication of a sizeable valve assembly, completed in a Comdain workshop and then delivered onsite. Victoria’s cold weather during the winter months of 2010 resulted in a greater demand for gas, and increased the potential risks associated with gas works. The key risk is the potential for gas supply to be interrupted. This is increased during the cold weather because the increased 46 GAS Today / November 2010 Driving the LNG highway LNG is not only for export, as shown by BOC’s proposed new ‘LNG highway’, to be constructed along Australia’s east coast. Plant designer and builder Gas Liquid Processing spoke to Gas Today about the first plant to be built and what it could mean for other domestic LNG applications. G as Liquid Processing (GLP) is currently constructing the microLNG plant in Westbury, Tasmania, for BOC. Construction of the Tasmanian plant is nearing completion. GLP constructed the plant, along with the gas supply pipeline infrastructure connecting it to Tas Gas Networks’ Tasmanian Gas Pipeline. Mechanical, instrumentation and electrical handover of the plant from GLP to BOC is currently underway, with the pipeline completed and ready to supply gas to the plant. Pre-commissioning works have started with natural gas due into the plant in November 2010, a delay on the original timetable due to poor weather and general ground conditions. The micro-LNG plant has been designed and built by GLP in modular form. Plant modularisation helps speed up the construction process and ensures that site engineering and installation hours are reduced. Experience counts Construction at the site of the upgrade project. consumption of gas for heating increases the potential for loss if a failure of supply occurs. Comdain said that risks were contained by a risk assessment with APA Gasnet and the Australian Energy Market Operator. Comdain performed the job without incident, within budget and on time, according to APA Group Project Manager David Thek. “The timing of works at Euroa was impacted by regulatory and operational requirements,” Mr Thek said. “The co-operative approach between Comdain and APA on the project allowed the impacts to be minimised, with Comdain being able to react to changes and reschedule works in consultation with APA. “This co-operative approach ensured that APA had the ability to deal with operators and regulators with confidence, and helped to mitigate the impact of operational delays to the project,” Comdain said. Following on from the Westbury plant, BOC has approached GLP to start the engineering and procurement for the new micro-LNG plant to be built near Chinchilla, Queensland. Earlier in the year QGC and BOC announced that QGC would supply gas from its coal seam gas (CSG) fields to BOC starting from July 2011. This would mean that the plant would become the first in Australia to produce LNG from CSG. The GLP-designed plant will be the first plant built on mainland Australia dedicated to help provide an ‘LNG highway’ along the east coast. This LNG highway will involve a series of LNG refuelling stations between Melbourne and Brisbane. BOC is also currently modifying its existing LNG plant at Dandenong in Victoria to help service the new refuelling stations. As the Queensland plant is a copy of the Westbury plant, modular skid manufacturing time is reduced because fabricators are simply replicating past work. This results in a relatively small front-end purification capital cost penalty which is covered by the engineering and fabrication efficiencies. Developing domestic LNG applications Developing an LNG transport industry can be difficult. Motor companies are unwilling to produce LNG-powered vehicles without a supporting LNG supply network. On the other side, refuelling station developers are unwilling to finance and operate LNG plants without a customer base. In committing to construct the LNG plant, BOC is showing commitment to the industry. Furthermore, each LNG production site is sized to allow a further train of the same size or larger to be built, supporting future expansion needs. The development also supports a new area that is being investigated within the industry, the ‘virtual pipeline’. This concept involves LNG being trucked to remote locations for use in onsite power generation, or placement of the LNG plant on a stranded pipeline before trucking LNG to the end user. The technology utilised and the hazards involved in this process are well known to companies like BOC and GLP who have extensive experience in the cryogenic and gas industries. Half of the gas clean up process: the absorber and stripper. LNG storage tanks at the Westbury plant. GLP is a wholly-owned private Australian engineering company. For more information on the company and its projects, visit www.glp.com.au BOC Limited is a member of the Linde Group GAS Today / November 2010 47 Pipeline technology ploughs into the CSG industry Pipe and Civil is introducing technology to Australia’s pipeline construction industry to increase cost-efficiency and safety on projects while reducing environmental impacts. P loughing technology traditionally used in the rollout of fibre optics has been scaled up to provide a new method of installing gathering pipelines. The ploughing technology uses a unique ripper and chute design to displace the soil, and the guidance system then pulls the pipe into the trench. Unlike open trenching systems, the furrow in the earth created by the plough closes quickly under its own weight and is easily compacted. A specially designed all-terrain, allweather mobile winch vehicle (FWF 80 and FWF 82) pulls the plough vehicle (FSP 220 and 22) using a cable. The winch vehicle is anchored into the ground, avoiding the churning and mixing together of top soils so often associated with tracked or wheeled vehicles and trenching. The plough vehicle’s every leg operates independently, allowing the equipment to work easily in undulating terrain. The tip of the plough blade forms and clears the laying bed at specific depths. Then, using a patented guidance system, a pipe insertion unit is dragged along the bed and the pipe is inserted into the cavity with minimal risk of damage. Australia’s coal seam gas (CSG) sector saw the arrival of the first FSP 220 Fockersperger from Germany in July 2010. The plough is suitable for cable and pipe from 315–600 mm in diameter, and 48 GAS Today / November 2010 can bury the pipe at depths up to 2.5 m. According to Director Brenton Euler, Pipe and Civil is the first to bring this new ploughing technology to Australia, and in doing so will become the largest pipeline and cable ploughing contractor in the country. “Pipe and Civil is always looking for better ways to deliver our service, now by applying this technology and customising it to the local requirements we have once again set ourselves apart from the pack and are positioned as a leader in CSG upstream gathering innovation,” said Mr Euler. “This new pipeline system will be more cost-efficient in Australia because of the increase in production capability. It’s also safer due to the lack of open trench and reduces the environmental impact when compared to current pipeline burial methods. “A reduced construction easement combined with lower levels of soil disturbance is a win for the environment and landowners,” Mr Euler said. For more information contact Pipe and Civil on 07 3262 4600 or visit the company website at www.pipeandcivil.com.au PIPE & CIVIL FP 16/21 Condamine Power Station. Image courtesy of AE&E Australia. Solutions for cleaner power generation – Condamine Power Station. Siemens is committed to providing innovative solutions for cleaner power generation. Using coal seam gas as its primary fuel source, Condamine Power Station uses proven combined cycle technology to generate electricity more efficiently than a coal-fired power station and produces significantly less greenhouse gas emissions. Siemens have supplied two SGT-800 gas turbines and one SST-400 steam turbine for the power station. Whatever the application, Siemens gas and steam turbines set the benchmark for efficiency, reliability and environmental compatibility, providing low life-cycle costs and the best possible return on investment. For more information, please contact 137 222 or visit www.siemens.com.au To learn more about our solutions in the areas of water, energy, environment, healthcare, productivity, mobility, safety and security, please visit our website. Innovation for generations. CSG fires up at Condamine Power Station Situated 8 km east of Miles in the Murilla Shire in southern Queensland, QGC’s Condamine Power Station is a smooth amalgamation of green efficiency. T he chief attribute of the 140 megawatt (MW) Condamine Power Station is that it operates in combined-cycle power mode. The power station has the capacity and capability to generate electricity more efficiently than a coal-fired power station, whilst producing significantly less greenhouse gas emissions. Constructed by power plant specialists AE&E Australia, Condamine Power Station was Australia’s first combinedcycle power station to run entirely on coal seam gas (CSG). The plant comprises two Siemens SGT-800 gas turbines, two AE&E heat recovery steam generators and one Siemens SST-400 steam turbine. Hot exhaust gases are captured from the gas turbines in order to generate steam. The steam then powers a steam turbine generator, producing additional electricity without the need for additional fuel. The power station also includes a cooling water system and a water treatment plant. Civil & Allied Technical Construction 50 GAS Today / November 2010 (CATCON) was contracted to supply inground structures and services for the turbines. Condamine Power Station operates 24 hours a day and produces a nominal 140 MW of electricity to the grid. The location of the power site also optimises fiscal and environmental efficiency by allowing the easy supply of CSG and water from neighbouring gas fields. This significantly reduces the environmental impact and carbon footprint that can be left by conventional coal-fired power stations. The power station has the capability of providing very efficient gas-fired electricity to the National Electricity Market. In 2010, Condamine Power Station has reached several significant milestones including the first synchronisation of the Siemens SST-400 steam turbine Turbo-Gen set to the National Grid in February. In addition, R2 testing of the SGT-800 units was completed, with approval by the Australian Energy Market Operator for connection to the National Grid. Construction of the oil retention facility. Image courtesy of CATCON. How do I generate electricity more efficiently, while emitting fewer harmful greenhouse gases? Siemens 17/21 Gas generating interest in NSW and investment in greener energy sources could soon become significantly more attractive. These factors add up to considerable potential for gas-fired generation in the state. Gas-fired power generation in New South Wales could grow significantly in the nottoo-distant future. Gas Today looks at the state’s current and potential gas generation assets. Current capacity There are six operating large-scale gas-fired power stations in New South Wales with a combined capacity of 2,103.6 megawatts (MW). The largest at 724 MW is Delta Electricity’s Colongra Gas Turbine, which opened in December 2009. This runs in open-cycle configuration, as does the next biggest station, Origin Energy’s Uranquinty Power Station, which has a capacity of 664 MW. TRUenergy’s combined-cycle 460 MW Tallawarra Power Station is located in Yallah. Marubeni Australia operates the 160 MW Smithfield Power Facility, a steam turbine that runs on a combination of natural gas and waste heat. Energy Developments owns and operates the two smallest turbines in the state, the Appin Mine and Tower Mine Power stations, at 55.6 and 40 MW respectively. I t’s an eventful time for gas-fired power generation in New South Wales. The State Government is in the process of partially privatising its energy sector. Although it will maintain public ownership of existing power stations and electricity transmission and distribution networks, electricity trading rights and state-owned power station development sites will be privatised. Bids for these trading rights are due by 15 November 2010. At the same time, activity is ramping up in New South Wales’ coal seam gas (CSG) industry. These new CSG developments could mean that New South Wales becomes self-sufficient in natural gas supply or even becomes a net gas exporter. A report published in August 2010 by Access Economics for the New South Wales Innovation Council states “Gasfired generation, potentially fuelled by CSG, will be crucial to meet base load electricity requirements to 2020.” Competition in the New South Wales electricity market is set to increase, domestic gas supplies are increasing, electricity supplies need to be amplified 52 GAS Today / November 2010 Next generation Tallawarra Power Station emissions stack. These six stations could grow to twenty if all publicly-announced proposals for gas-fired power stations go ahead. Along with private developments, a total of seven power station development sites are being sold as part of New South Wales’ energy reform process. The sites are being sold individually, concurrently to the sale of trading rights for existing power generation assets, which are being sold in bundles. The largest proposed new developments are Macquarie Generation’s Bayswater B Power Station and the installation of two new units at Delta Electricity’s Mount Piper Power Station. Both developments are proposed to have a capacity of 2,000 MW. Development approval for both stations is being sought for either black coal or gas-fired power generation. This would allow parties acquiring the assets under the privatisation process to develop the stations using whichever fuel is preferred. The next largest station is AGL’s Dalton Power Station, an open-cycle power station that could eventually have a capacity of up to 1,160 MW. Although it does not have development approval as yet, AGL is progressing permit options. The station is expected to be commissioned in the last quarter of 2013. Eastern Star Gas’ Wilga Park ‘A’ and Wilga Park ‘B’ Power Stations, at 3 MW and 29.4 MW respectively, are the nearest to commissioning, which will take place from the second quarter of 2011 through to the fourth. Conclusion With the energy reform transactions intended to be executed before the end of 2010, the New South Wales energy sector is under close scrutiny. Gas-fired generation has emerged as an attractive option as the state’s generation mix changes and expands. Fourteen new gas-fired power stations have been proposed for New South Wales. The table below provides a brief overview of the proposals: Proponent Project Capacity Commissioning date AGL Energy Dalton 1,160 MW Q4, 2013 AGL Energy Leafs Gully 360 MW TBA Delta Electricity Bamarang 300 or 400 MW 2014 Delta Electricity Marulan 350 or 450 MW 2014 Delta Electricity Mount Piper units 3 & 4 2,000 MW 2014 or 2016 Delta Electricity Munmorah Rehabilitation 700 MW 2014 ERM Power Wellington 640 MW Q3, 2013 International Power Buronga 120-150 MW TBA International Power Parkes Peaking Power Plant 150 MW TBA Macquarie Generation Bayswater B 2,000 MW 2014 Macquarie Generation Tomago GT TBA TBA TRUenergy Tallawarra B 450 MW TBA Eastern Star Gas Wilga Park ‘A’ 3 MW Q2, 2011 Eastern Star Gas Wilga Park ‘B’ 29.4 MW Q3–Q4 2011 Source: Australian Energy Market Operator 2010 Electricity Statement of Opportunities. GAS Today / November 2010 53 Coal seam gas: the new Star of NSW Eastern Star Gas has positioned itself as a key player in New South Wales’ burgeoning coal seam gas industry as operator of the one of the most advanced CSG project in the state, the Narrabri CSG Project. N ew South Wales has long been seen as the state between two major gas producers, but Eastern Star Gas (ESG) is looking to change this reputation. The state may even become a net gas exporter, says ESG, if reserves and resource upgrades continue at the Narrabri coal seam gas (CSG) Project. The project is located in PEL 238, adjacent to the town of Narrabri. It is located in close proximity to a number of ESG’ other permits – PELs 6, 427, 428, 433 and 434, all situated within the lightly-explored Gunnedah Basin. ESG holds a 65 per cent interest in the project, while joint venture partner Santos holds the remaining 35 per cent. Drilling in NSW A key feature of the permit is the vertically fractured architecture of the target coals. While vertical wells could not produce gas in the expected volumes, ESG found that lateral wells could realise the potential of the coal seams. Following a number of successful lateral pilots, the company is looking forward to trialling a new ‘stacked multi-lateral pilot’ well design. This design involves two or more lateral wells targeting different seams being drilled from the one location, allowing very high gas recovery rates. The permit’s location also protects it from one of the key issues facing Queensland’s CSG sector – water management. In response to environmental concerns, the Queensland Government recently passed legislation on the management of CSG water, as well as establishing landholder committees in affected areas. Luckily, ESG’s primary targets are completely surrounded by layers of rock, which means that they are isolated from regional aquifers. This also means that CSG drilling for the project will not affect the Great Artesian Basin or the surface area. “This development schedule could see LNG leaving the Port of Newcastle as early as 2014.” ESG Managing Director David Casey. Commercialising CSG ESG is looking to commercialise the Narrabri project in multiple stages. ESG's Narrabri CSG Project. Schematic of a stacked multi-lateral pilot well. The first stage involves gas supply to the 7 megawatt (MW) Wilga Park Power Station, located in PEL 238. The station is owned by the Narrabri joint venture partners and supplies electricity to Country Energy. A further 9 MW of capacity will be installed at the station in the first quarter of 2011. Although conventional gas from PPL 3 provides the majority of feedstock for the station, pilot production gas from Narrabri is also used, providing early monetisation of the resource. Opportunities also exist for further expansion of the station. Approvals processes are underway for commercialising gas under stages 2 and 3 of the Narrabri CSG development. These stages would involve connecting the project to existing pipeline 54 GAS Today / November 2010 infrastructure, allowing gas to feed the east coast market as well as other power stations. Under stage 2, the Narrabri development would be connected to existing markets via a lateral to APA Group’s Central Ranges Gas Pipeline. Stage 3 would involve expanding this domestic supply with pipeline extensions from the Central Ranges Pipeline to Bayswater, Tamworth and Wellington. Underpinning this stage, ESG has three Memorandums of Understanding (MoUs) in place for the supply of a total of 1,700 petajoules of gas for power generation, commencing from 2013. ESG has signed an MoU with ERM for the supply of 20 petajoules per annum (PJ/a) of gas from 2013 to the 660 MW Wellington Power Station. The company has also signed an MoU with National Power for supply of gas to a proposed new gas-fired power station in northern New South Wales. The proposed station would require new connecting pipeline infrastructure. The final Narrabri development stage involves looking at other ‘value-adding opportunities’. ESG has entered into an MoU with Hitachi Limited and Toyo Engineering to investigate the feasibility of an LNG plant in Newcastle. The company has looked at alternatives, including piping the gas to Gladstone for use in CSG-to-LNG projects or developing a gas-to-liquids or methanol project. However, ESG Managing Director David Casey says, a Newcastle LNG development is at present the most attractive. APA Group will construct an approximately 400 km CSG pipeline from Narrabri to Newcastle. Speeding towards trains Although the results of the feasibility study are not expected until the end of 2010, the company is rapidly progressing the Newcastle option. An agreement has been signed to acquire 24 hectares of land on Kooragang Island, Newcastle, and the company has raised $100 million to progress the development. Following the feasibility study, the development partners are looking to progress frontend engineering and design work in 2011 to allow a firm commitment in 2012. This development schedule could see LNG leaving the Port of Newcastle as early as 2014. Current gas reserves support a one million tonne per annum (MMt/a) LNG development, however the site has the potential to expand to at least 4 MMt/a of LNG. Having spent considerable effort on exploration activities, Mr Casey says that ESG is a company ready to transition to development and production. In 2011, the company will be completing gas sales and LNG project agreements, along with progressing project approvals and upgrading reserves to support its ambitious plans for CSG in New South Wales. GAS Today / November 2010 55 iGas: break-through application for gas to fuel large highway trucks By Paul Whiteman, iGas Energy Holdings founder and Chief Executive Officer The new, patented iGas system could drive a new generation of CNG-fuelled interstate highway trucks, says Chief Executive Officer Paul Whiteman. He tells Gas Today all about the technology and its application. The science How does the system work? The key to the iGas process is to maintain pressure in the CNG cylinder as the gas is consumed by the engine. This is achieved by displacing the gas with a liquid in one CNG cylinder at a time; this keeps the CNG at a pressure that allows gas to be directly injected into the engine. Once all of the gas in a cylinder has been used the liquid injection stops, the valves are shut and the liquid is returned to a low pressure tank. The process is then repeated for the subsequent CNG storage cylinders. CNG is also a safe fuel and is significantly lighter than air: unlike LPG or liquid fuels, any leaks dissipate quickly. CNG is a well established and well understood fuel in Australia in buses and small trucks, and is extensively used overseas for these applications as well as in cars. There are four subsystems: the hydraulic pack, the fuel pack, the liquid tanks and the gas drying assembly. • The hydraulic pack is fitted inside a second battery box on the prototype truck and it comprises a high pressure metering pump which is used to pump liquid into the CNG cylinders. It is powered by a hydraulic motor which in turn is powered by a hydraulic pump fitted in tandem with the truck’s power steering pump. • The fuel pack comprises four CNG cylinders, three air actuated valves per cylinder plus two header valves and a number of manual isolation and re-filling valves. The fuel pack gives a truck the same range as a 450 L tank of diesel in a conventional engine. • The liquid tanks holds approximately What is the range of the fuel pack on the prototype truck? The prototype has four CNG cylinders with a storage capacity of approximately 1,200 L of natural gas at 350 bar gauge (barg). On an energy equivalent basis this equals approximately 420 L of diesel (105 L per cylinder) or approximately 450 L when the diesel pilot fuel is added; so a typical semi trailer would get approximately 900–1,000 km range and a B double around a 600–700 km range. We have layouts for up to seven cylinders in configurations that will still pull a maximum length B Double and up to ten cylinders if we stretch the chassis half a metre. Range is not really an issue; it is more about weight and length of the prime mover. There are a number of refilling options for the fuel pack, depending on the application. The conventional method is to connect the cylinders to a high pressure gas compressor and let the gas flow into the cylinders until the pressure reaches the desired level. This will take around 30 minutes, subject to compressor sizing. We have also developed a nonconventional method that uses the liquid displacement approach of the iGas GAS Today / November 2010 How much mass does the iGas system add to a truck? The prototype truck has a four cylinder fuel pack which weighs approximately 1,200 kg when full of CNG. There is another 100 kg in the hydraulic pack and fuel conditioning system, and the additional liquid for displacing gas weighs approximately 400 kg. The total figure of 1,700 kg is offset by the reduction in diesel fuel load and tanks, so approximately 1.35 tonnes extra weights for this configuration. An eight pack, giving a range of more than 1,300 km for a B Double would add about 2.2 tonnes of extra weight. Is the prototype running on the road? The prototype is now registered for road use, and has successfully towed loaded trailers at highway speeds. The CNG cylinders are registered for service in Australia (they are made in the USA) and an independent engineer has certified the system as compliant and suitable for use. What happens if the truck runs out of gas? The HPDI injector contains both diesel and high-pressure gas injection circuits. On a typical HPDI truck operating cycle diesel fuel consumption is approximately 5 per cent of the fuel energy, while the rest is gas. To make this work properly the diesel injection circuit is by necessity very small and while it can run without gas, the engine will only deliver about 10 per cent of its rated power for a short time (ten minutes) on diesel alone. So it can run on diesel in a limited manner but cannot pull a load or operate for an extended period of time. If the truck runs out of natural gas, the engine switches to diesel-only mode and if the truck is on the road the driver will need to pull over and stop. From there, there are a number of options including in-place refuelling or towing the prime mover. Continued on page 58> The iGas Energy Truck with fuel pack. 350 L of a water-based solution that is pumped into the CNG tanks at high pressure to maintain the gas at the required pressure for direct injection into the engine. • The gas drying assembly contains two filters that remove water vapour from the gas stream and a collection arrangement to return any condensed liquids back to the tank. Paul Whiteman, former Chief Executive Officer and Managing Director of EDL, is now founder and Chief Executive Officer of iGas Energy Holdings Limited, a new company developing a patented compressed natural gas (CNG) fuel storage and delivery system to enable large high pressure direct injection (HPDI) engined trucks to run on CNG. He has been joined in the enterprise by Jim McDonald, former Chief Executive Officer and Managing Director of the Australian Pipeline Trust (now APA Group), and Derek Fekete, previously a senior engineer with EDL. The iGas team has been working with Westport to enable CNG to be used as fuel for the Westport GX engine that uses HPDI technology. EMICO_ad_HPH.indd 1 56 process that will allow faster refuelling. In addition, we have developed the concept of a changeover fuel pack; that is where a truck pulls into the refuelling terminal and the empty fuel pack is removed and replaced with a full one. This could reduce the time it takes to refuel a truck to less than five minutes. 20/04/10 10:25 AM GAS Today / November 2010 57 Will the iGas system work in this application? Firstly, the Westport engine is proven using LNG as a fuel. In this configuration, the LNG is pumped up to high pressure by a pump submerged in the LNG and then piped to an evaporator where it becomes CNG. It is then pumped to the engine, so the Westport engine is really a CNG engine, as it already runs on CNG in LNG trucks. Secondly, we have already proven that the injection of liquid into the CNG storage cylinder to maintain gas pressure works. We initially undertook small-scale testing to confirm the concept, and in addition identified examples overseas where the principle has been used in gas compression going back several decades. We are now focused on working through the components and the process to refine everything for absolute reliability and commercial application. Finally, it has in the past been a challenge to get sufficient CNG storage on a truck because of its relatively low energy density. The iGas system operates at 350 barg (5,076 pounds-force per square inch gauge) which increases the energy density over previous systems by around 40 per cent. We intend that iGas trucks will carry sufficient fuel onboard to travel 1,000 km, and this prototype demonstrates that capability. Westport’s involvement compress the air fuel mixture in the cylinder. When diesel is injected near the top, dead centre on the compression stroke, it spontaneously combusts, igniting the air/gas mixture. While this works well if the engine is not heavily loaded and at low percentages of gas relative to diesel, the more gas that is introduced the greater the risk of spontaneous ignition before the diesel is injected due to the heat of compression – something that can have catastrophic consequences for the engine. The more gas that is introduced the greater the potential for detonation. The other problem with gas fogging is over-fuelling. It is quite difficult to limit the fuel required to meet the rated horsepower of an engine when using gas to supplement diesel in this manner. The sophistication required to do this is often not contained in gas fogging installations. Bad experiences with gas-fogged engine failures in the industry five to ten years ago have affected the take up of gas to replace or supplement diesel. Gas fogging does provide greater fuel flexibility. Trucks fitted with a gas fogging system can still run on 100 per cent diesel, however the whole point of the iGas business case is to replace diesel with gas to reduce the cost of fuel for large trucks. Advantages Import replacement As the engine supplier for the truck, Westport has modified its control system to allow the iGas system to operate without the LNG tanks, pumps and vaporiser. We have had extensive communications with Westport over the past two years to ensure that we understand the Westport HPDI engine and controls fully, and that they understand iGas. From our research we believe vehicles in the initial target market for iGas burn around 4 billion L of diesel fuel annually: almost all of this is either imported refined or produced from imported crude oil. Replacement of this imported fuel with local natural gas has the potential to reduce imports by over $2 billion per year at current oil prices. How do Westport HPDI engines compare with other options? Cost and availability There is another option known as 'gas fogging'. The Westport engine displaces approximately 95 per cent of the diesel with gas whereas gas fogging systems generally achieve 50–60 per cent. Gas fogging systems inject gas at low pressure with the combustion air, generally into the turbo inlet, and Liquid natural gas is difficult to manage and handle being held at temperatures down to about minus 160 °Celsius. LNG production requires an LNG plant, which is expensive and needs to be of a large scale to be cost effective. LNG also requires insulated transport, as well as expensive insulated storage vessels at refuelling stations. Young ones pipe up at Gas Speak The Australian Gas Industry Trust (AGIT) welcomed 29 young members of the gas industry to take part in the Gas Speak Colloquium, a three-day forum designed to encourage awareness and knowledge of the gas industry in Australia. CNG can be more attractive than LNG in both availability and price. For CNG all you need is a gas supply and a compressor. There are numerous proven products available from a range of manufacturers at only a fraction of the cost of an LNG plant. A CNG refuelling point can be set up almost anywhere there is gas supply. We envisage a number of re-fuelling stations will be established along the national highway network where gas pipelines and highways intersect. We aim to lower the cost of interstate transport. Held at Old Parliament House in Canberra, Gas Speak provides a forum for young professionals in the gas industry to develop their presentation and sessionchairing skills. Each delegate presented a paper on the topic of their choice, and received feedback from a panel of mentors. As Gas Speak was held concurrently with the one-day Energy Networks Association (ENA) Gas Seminar, the event was opened by ENA Chief Executive Andrew Blyth. Delegates spent Day One learning the art of effective presentations, in sessions designed to enhance and develop the presenting skills of the delegates, and enjoyed a tour of Old Parliament House, in the afternoon. Following the morning’s training, delegates were keen to get back to their computers and make some last-minute edits to improve their presentations. Mentors provided their time and expertise to these very talented people Santos' Ying Luo, winner of Best Presentation. and offered useful advice and tips on presentation and communication skills, as well as providing further insights into the gas community. The Gas Speak 2010 mentors included: • Barbara Jinks – GHD • Andrew Creek – Australian Gas Industry Trust • Steve Davies – Australian Pipeline Industry Association • Chris Blogg – Rinnai • Shelley Reed – Australian Power and Gas. Among the high calibre presentations, the following individuals took home the Gas Speak 2010 awards: • Ying Luo, Graduate Field Engineer with Santos, won Best Presentation with a talk on life at remote coal seam gas sites. • Michael Fox, Mechanical Engineer with APA Group, won the Encouragement Award. • Jared Brown, HSE Adviser with DrillTec Australia, took out Best Impromptu Speech. Environmental benefits The Westport GX engine is currently certified to Australian Design Rules (ADR) 80/02 standards and has approximately 50 per cent less particulate matter emissions and 25–29 per cent less greenhouse gas (GHG) emissions relative to an equivalent diesel engine. While everyone understands GHG emission reduction as a key government objective, the reduction in particulate emissions (soot) from the exhaust stack is also important. This is a major emission and health issue that has been tackled so far by upgrading the diesel refining process to reduce sulphur content in fuel. Westport has recently certified the GX 15 L engine to ADR 80/03 standards, which comes into force in January 2011. How, when, where? • iGas expects to have two trucks up and running by Christmas 2010. • Trucks will likely be offered as tow-operator vehicles before the fuel system is available to other parties. • Patent is approved in Australia, pending for North America and European Union. 58 GAS Today / November 2010 Gas Speak delegates and mentors. GAS Today / November 2010 59 2010 FutureGAS Gala Dinner. A new, larger exhibition space will allow for over 50 booths. Get ahead – get to FutureGAS 2011! The business program will be expanded in 2011 to include a technical stream. Australia’s whole-of-industry gas conference and exhibition, FutureGAS 2011, is returning to Brisbane in March with an expanded program, larger exhibition and the ever-popular networking events. F utureGAS, Australia’s premier gas industry event, is returning in 2011 from 22–24 March, bigger and better than ever before. Following on from the success of the 2010 event, FutureGAS 2011 is moving to the Brisbane Convention and Exhibition Centre to accommodate the rapidly growing number of exhibitors, delegates and trade visitors. Event Partner MWM Energy, a leading provider of high-efficiency gas engines in Australia, is returning for the third year as Event Partner. Being involved in multiple segments of the gas industry in Australia, and as one of the largest independent engine manufacturers in the world, MWM well recognises the need to share knowledge across sectors. MWM’s continued support demonstrates the benefits reaped from sponsorship and attendance at FutureGAS. The event brings together all sectors of the industry, from exploration, production, transmission, power generation, distribution, and end users. It’s an exciting time for every sector of the industry. Interest in unconventional gas is heating up, while a number of major LNG developments are entering the final approval stages, and construction on major gas projects pushes ahead. The short-term trading market has been launched in Sydney and Adelaide, with Brisbane to join in 2011. All of this adds up to a need to keep informed about issues and developments in the industry. FutureGAS provides this unparalleled opportunity. Expanded program In addition to the two-day business stream, this year’s event will feature a one-day technical stream. While the business stream will feature key industry figures from government, business and industry associations, the new technical stream is tailored to the specific needs and interests of engineering professionals. Special registrations will be available for delegates wishing to attend the technical stream. The business stream features speakers providing invaluable experience and insight, including the recently-appointed Queensland Gas Commissioner, Kay Gardiner, and DomGas Chairman and Western Australian Director for ERM Power Tony Peterson. The technical stream will hear from –among others – CSIRO Theme Leader Gas and Geothermal Research Dr Jim Underschultz on research in coal seam gas. The full program is soon to be released – keep an eye on Gas Today and www.futuregas.com.au for all the details. Delegates from the 2010 event particularly noted the opportunities these events provided to expand their professional networks. With even more attendees anticipated for the 2011 events, this is a networking opportunity not to be missed. Having moved to accommodate a greater number of exhibitors, the exhibition hall will host over 50 booths, allowing even greater opportunities for engineers, procurement leaders and other industry members to speak directly with suppliers. In addition, the free-to-attend exhibition will be open until 7 pm on one of the conference days to allow trade visitors to drop by after work to meet the industry. As the industry pushes forward, FutureGAS grows with it, an unmissable forum for members of every sector of the Australian gas industry. Opportunities are still available for interested exhibitors and sponsors – for more information or to book a booth, call 03 9248 5100 or visit www.futuregas.com.au Earlybird special registrations will be available until 21 January 2011, offering exceptional value for money. Visit www.futuregas.com.au for more information or to register. Meet the industry Networking at the Opening Cocktails. 60 GAS Today / November 2010 Returning this year are the extremely popular networking functions, which include the Opening Cocktails and the industry highlight networking event of the year, the Gala Dinner. GAS Today / November 2010 61 LNG in focus at SEAAOC Australia’s offshore industry gathered in Darwin for the South East Asia and Australia Offshore Conference, held from 22–24 September 2010. INPEX Darwin General Manager Sean Kildare. D elegates descended on Darwin to attend the two-day South East Asia and Australia Offshore Conference (SEAAOC), held for the offshore petroleum sector. In the opening session of the conference Federal Minister for Resources and Energy Martin Ferguson noted the significance of LNG projects in the Northern Territory and across Australia. “Australia exported nearly 15.5 million tonnes of LNG in 2008–09. By 2029–30, LNG exports are projected to increase to 109 million tonnes [per annum], or about 700 per cent.” Talk of LNG continued throughout Day One, with presentations from major LNG project proponents including ConocoPhillips, INPEX, Shell, Santos, QGC and ExxonMobil. Other presentations covered a range of topics including project case studies, market and economic outlook for offshore projects, and a brief insight into unconventional gas projects in Australia. Australian conventional and non-conventional gas opportunities look bright, delegates heard at the Australian Pipeline Industry Association’s Annual Conference and Exhibition in Darwin, Northern Territory, from 11–14 September 2010. H Federal Minister for Resources and Energy Martin Ferguson at SEAAOC. ENA Gas Seminar By Dale Weber, ENA Director, Gas and Energy Market Developments The Energy Networks Association Gas Seminar 2010 was held in Canberra on 12 October 2010 at Old Parliament House. ENA Director Gas and Energy Market Developments Dale Weber reflects on the event. O ur intention was to run a thought provoking seminar that examined the key question: Is natural gas the next big thing, or has its time come and gone? In a joint opening session with the Gas Speak Colloquium, the keynote address was delivered by the Minister for Energy and Resources Hon. Martin Ferguson. The Minister recognised that gas has a significant role to play in Australia’s future, in both domestic and export markets, particularly in light of the focus on reducing greenhouse gas emissions. It was also acknowledged that industry has an important role to play in issues such as establishing a price on carbon and in working with government in identifying the barriers to increasing the 62 GAS Today / November 2010 uptake of natural gas for road transport. The industry keynote address, Natural gas now and into the future, was delivered by Ian Little, Managing Director of Envestra. Mr Little’s speech included important insights into some of the key issues facing Envestra including regulatory barriers to investment, and workforce skills and planning. Mark McKenzie from Rare Consulting presented the draft strategy for Australia’s natural gas industry commissioned by the Energy Networks Association (ENA). The strategy – helping to secure Australia’s energy future in a carbon constrained economy – is built around three strategic opportunities: to improve Australia’s energy security; to reduce greenhouse gas emissions; and New gas opportunities on agenda at APIA 2010 to fast track renewables and distributed generation. Both Ben Wheaton (WheatonBeer Consulting) and Karen Masnata (PricewaterhouseCoopers) discussed natural gas’ role in the energy mix with respect to renewable energy sources. After lunch, sessions were held on bringing new products to market, policy and regulatory issues, and upstream gas market perspectives. In conclusion, natural gas will play a significant role in Australia’s energy future, but there is a lot of work to do, not the least in terms of working with government in shaping appropriate policy settings and working with key industry and non-industry stakeholders to implement the strategy for Australia’s natural gas industry. eld at the Darwin Convention Centre, the conference – whose host sponsors included APA Group, BlueScope Steel, Bredero Shaw, CNC Project Management, Sargent and Vermeer – included an opening address from Territory Chief Minister Paul Henderson and a keynote speech from 2005 Young Australian of the Year, Khoa Do. Australian Pipeline Industry Association (APIA) President Peter Cox welcomed delegates on Monday morning, noting that the industry is facing unprecedented challenges and opportunities. Dampier Bunbury Pipeline’s Mark Cooper continued the theme, discussing how natural gas needs to be recognised as an industry in itself, rather than as an industry segment. The opportunities presented by coal seam gas (CSG) were the key topic of Monday afternoon, during which time delegates heard from speakers including OSD's Paul Beukelman and AJ Lucas’ Ben Cooper, who discussed the Wallumbilla to Gladstone pipeline looping in Queensland, and the potential impact of the state’s four proposed 42 inch diameter pipeline projects for extraction of CSG. Tuesday’s program was jam-packed, featuring sessions on research and training, pipeline operations issues, construction and innovation, and environment and safety. The exhibition featured 68 companies from all areas relating to the industry, including recruitment, equipment suppliers, service providers and trenchless technology specialists. The conference also provided plenty of opportunities for delegates to network and explore Darwin. Saturday was dedicated to golf and a Welcome Dinner, while Sunday featured an outing to Crocodylus Park and the conference Opening Dinner. In a tribute to Darwin’s namesake, guests dressed as their favourite ‘Charlie’ at Monday’s Fancy Dress Dinner, while Tuesday’s APIA Annual Dinner concluded the conference with smiles all around. APIA Chief Executive Cheryl Cartwright welcomes guests to the Convention Opening Dinner. Senator Mathias Cormann opened the Exhibition. Calendar of events DATE / VENUE EVENT CONTACT 22–24 March 2011 Brisbane Convention and Exhibition Centre, QLD FutureGAS www.futuregas.com.au 10–13 April 2011 Perth Convention and Exhibition Centre, WA Australian Petroleum Production & Exploration Association Conference and Exhibition www.appeaconference.com.au 4–7 September 2011 Brisbane Convention and Exhibition Centre, QLD EcoGen 2011 www.ecogen2011.com 22–25 October 2011 Sydney Convention and Exhibition Centre APIA Convention 2011 www.apia.net.au 3–6 October 2011 Brisbane Convention and Exhibition Centre, QLD No-Dig Down Under 2011 www.nodigdownunder.com 12–14 September 2011 (TBC) Gas Speak Collquium 2011 www.agit.org.au GAS Today / November 2010 63 ADVERTISERS’ INDEX SUBSCRIPTION REQUEST Aust Dynamic Technologies Co 61 Austral. 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