Australian Gas Infrastructure Group Annual Review 2018
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Attachment 2.1 Australian Gas Infrastructure Group Annual Review 2018 January 2020 Delivering for Australians 2018 Annual Review We are Australian Gas Infrastructure Group (AGIG) One of Australia’s largest gas infrastructure Our portfolio of companies delivers for customers businesses. across Australia. Our vision is to Dampier Bunbury be the leading gas Pipeline Group (DBP) infrastructure Operates in Western Contents business in Australia. Australia and the Message from the Chairmen 03 We will achieve this Northern Territory. Message from the CEO 05 by delivering for our Multinet Gas Highlights 09 customers, being Networks (MGN) About AGIG 11 a good employer and Operates in Victoria. being sustainably Values and Vision 15 Australian Gas cost efficient. Our Role in the Gas Industry 17 Networks (AGN) Our Project Capabilities and Credentials 21 We own and operate Operates in Victoria, Delivering for Customers 27 infrastructure that South Australia, A Good Employer 39 delivers gas to Australian Queensland, New Sustainably Cost Efficient 43 homes, businesses, and South Wales and the Operational Statistics 59 communities. In 2018 Northern Territory. we surpassed two AGIG builds and million customers operates new pipelines on our distribution across the country. networks—more than any other gas distributor in the country. We also deliver and store gas that supports the Australian economy—for power generators, mines and manufacturers. Australian Gas Infrastructure Group Australian Gas Infrastructure Group 01 2018 Annual Review 2018 Annual Review 02 Message As the Chairmen of the companies that make up AGIG – DBP, MGN and AGN – from the we are proud of the achievements Chairmen of AGIG in working towards this vision. Customers remain at the heart of all AGIG activities, and the In 2018 we improvements shown in 2018 are a demonstration of this. AGIG connected over 31,000 net new customers across its distribution continued to networks, taking the total number of customers to over two million across Australia. As an inaugural signatory to the Energy Charter, AGIG has demonstrated deliver on our John Langoulant AO its continuing commitment to put customers’ interests first. Chairman, Dampier Bunbury Pipeline vision to be AGIG also delivered significant new projects for customers. The Tanami Gas Pipeline in the Northern Territory and a new compressor station for Woodside connecting to the Dampier Bunbury Natural Gas Pipeline the leading gas (DBNGP) deliver improved energy security and reliability for major Australian businesses, and for Australian energy consumers. infrastructure AGIG’s vision puts our employees at the centre of the businesses. In particular, the safety of the AGIG workforce and those of our partners business in is our number one priority as Chairmen and Board members. Safety performance improved in 2018, with reduced total injury numbers and reduced injuries per work hour. We were particularly pleased with the Australia. result at DBP where there were no recordable injuries on the DBNGP mainline throughout 2018—showing that zero harm is more than an aspiration. The Boards of AGN, DBP and MGN will continue to focus on improving safety performance in 2019 and beyond. AGIG’s employee engagement survey results also improved in the Peter Tulloch second survey conducted since coming together as a group. The result Chairman, Australian Gas Networks is testament to the hard work of all AGIG employees in working and behaving as one team. Finally, underpinning AGIG’s vision is the need to be sustainably cost efficient. On this front, 2018 has seen AGIG lower and stabilise operating costs, while also delivering capital expenditure on growth projects. In 2018 AGIG made significant progress in delivering a low carbon future for the gas sector and Australia’s energy needs more generally. Through AGIG’s leadership hydrogen has taken its rightful place at the centre of Australia’s energy debate with more progress expected in 2019. Meanwhile, at Hydrogen Park South Australia (HyP SA), AGIG is turning those efforts into a practical reality. In 2019 AGIG promises to further deliver on its vision. Delivering for We have made significant customers while maintaining and improving safety performance will progress in delivering remain a focus for the AGN, DBP and MGN Boards. Across our business Peter Lowe a low carbon future we will also deliver a number of new projects as outlined in the Annual Review. Chairman, Multinet Gas Networks for the gas sector and AGIG has had a momentous year and this Annual Review provides an Australia’s energy needs overview of the key achievements. We look forward to further progress more generally. when we report again for 2019. Australian Gas Infrastructure Group Australian Gas Infrastructure Group 03 2018 Annual Review 2018 Annual Review 04 We aim to outperform our peers in the way An engaged workforce is critical to achieving our vision—engaged employees Message prioritise customer service and safe work practices. 2018 is the second year we Ben Wilson we deliver for customers, be a good employer have surveyed AGIG employees and our results show that we are becoming more Chief Executive Officer and remain sustainably cost efficient. engaged. Engagement in 2018 improved on the 2017 result, with 70% of our staff from the CEO actively engaged; up from 65% in 2017. Improving engagement and developing During the year we reached some important the skills of our workforce will continue to be a focus in 2019 and beyond. In 2018 we milestones in each of these areas. Sustainably Cost Efficient established firmly Delivering for Customers This year hydrogen and renewable gas took centre stage in Australia’s energy policy debate. The gas industry must play a role in meeting Australia’s In 2018 we surpassed two million customers on our distribution networks, more commitment under the Paris Climate Change Agreement to reduce emissions than any other gas distributor in the country. We connected over 31,000 new our role as by between 26% and 28% on 2005 levels by 2030. Achieving significant emissions customers (net), the highest number of new connections ever achieved. reductions beyond 2030 will require equally significant change in our industry. Our one of the most As the reach of our network expands, we must maintain reliability and deliver work on the Hydrogen Strategy Group chaired by Australia’s Chief Scientist Dr Alan valued services for all our customers. The reliability of our networks remains Finkel helped provide a catalyst for the Energy Council of the Council of Australian exemplary, on average only 0.3% of our distribution customers experience Governments to agree to develop a national hydrogen strategy in 2019. important energy an unplanned outage every year, whilst our largest transmission pipeline has In 2018 we got on with the practical work of creating a zero emissions future operated without interruption for over 11 years. for our business. In early 2018, we secured funding from the South Australian infrastructure To ensure we act and operate in the best interests of our customers we Government to develop our Hydrogen Park South Australia (HyP SA) project. This recognise the need to work together with customers and stakeholders in the leading project, which will be the first of its kind and scale in Australia, is on track businesses in energy supply chain. In 2018 we worked closely with Energy Consumers Australia to begin hydrogen production in 2020 following the completion of Front End and other energy companies to design and develop the Energy Charter. Engineering and Design (FEED) and the purchase of an electrolyser in 2018. In early 2019 we were proud to become a founding member. Australia. While achieving so much in 2018, we were also able to maintain our performance Natural gas is a fuel of choice. If our customers are not satisfied, our business in managing our costs and delivering savings for customers and shareholders. will not thrive. To this end, in 2018 we were able to sustain our customer A relatively mild winter in 2018 saw gas volumes decrease across our business, but satisfaction scores, and improve them at AGN to 7.9 (from 7.7 in 2017). Our focus at the same time we have continued to lower and stabilise operating costs. Capital for 2019 will be on improving communications with our customers and we will costs increased across AGIG, primarily as a result of an increase of $89 million at reflect on these efforts in our first report under the Energy Charter later in the year. DBP to $175 million, driven by our investment in the Tanami Gas Pipeline. Capital The Energy Charter is our promise to every Australian that customers are at the costs were lower at AGN. heart of our business. We will continue always to focus on customer satisfaction, customer service and the customer experience by improving day-to-day, Looking Forward to 2019 week-to-week, and year-to-year. As we have established AGIG we have continued to deliver for Australians. In 2018 we also delivered on several significant customer driven projects. We In 2018, we continued to improve services to our customers, to be a good completed the majority of pipeline construction works on the Tanami Gas Pipeline. employer, and to lead a financially and environmentally sustainable transition This project, commissioned in early 2019, provides reliable and secure energy in the gas sector. The future promises to be equally exciting with a range of for Newmont’s mining operations in the Northern Territory. projects providing AGIG an opportunity to work towards our vision in 2019. We also completed the construction of a new compressor station on the In late 2018 we received approval from the Australian Energy Regulator (AER) DBNGP for Woodside enabling Pluto gas to reach the domestic market in to develop the proposed Mount Barker Natural Gas Extension in South Australia.