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Stephen Dykes Managing Director Gemseekers International Pty Ltd

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Stephen Dykes Managing Director Gemseekers International Pty Ltd Stephen Dykes Managing Director Gemseekers International Pty Ltd and Henry Dupal Operations Manager, Northern Territory APA Group THE CONTRIBUTION OF THE AMADEUS PIPELINE TO THE NORTHERN TERRITORY AND TO THE AUSTRALIAN PIPELINE INDUSTRY By Stephen Dykes (Gemseekers International Pty Ltd) and Henry Dupal (APA Group) The growth in power consumption in the Northern Territory (NT) since self-government in 1978 drove the need for constant vigilance on future capacity requirements. In 1980, studies drove a decision to build a coal power station based on the fact that there were no significant energy sources apart from uranium at Ranger and a need for relatively small scale generation precluded the use of nuclear power. Stokes Hill power house was aged, was only 400 metres from Darwin Central Business District and was a heavy polluter burning bunker oil. Gas had been considered but at this time insufficient reserves had been proven at Palm Valley (50 PJ versus an economic requirement of about 250 PJ), gas reserves at Mereenie were considered unavailable as it would be used for reservoir pressure maintenance to recover the oil until about 2000 and industrial disputes and the costs of imported pipe, materials and skills drove estimates for pipeline construction to be more than the coal option. Offshore reserves at Petrel were known but development was thought to be contingent upon an LNG facility and current prices were assumed unable to meet the economic hurdle for such a decision until the mid-1990’s1. By 1983, the coal decision was well advanced, coal would be shipped from eastern States, and a plan for the Darwin electricity system to be extended to Katherine and Jabiru were under consideration. By 1984, the piers for the coal unloading arms at Channel Island had been ordered, and preparatory civil works were about to commence. In parallel there were several attempts at a gas solution. First, through the efforts of John Butters, then General Manager AGL, the Australian Gas Light Company (AGL) offered LNG tankers from Alice Springs. Andy Lucas proposed an 8 inch pipeline from Alice Springs to Channel Island to run the first two 50 MW turbines. AGL then offered to look at a 10 – 12 inch pipeline instead of the LNG tankers and through more meetings were able to demonstrate that a power station using natural gas from central Australia was environmentally and economically preferable. Ian Tuxworth, the then Minister for Mines and Energy was able to convince the Northern Territory cabinet to put a hold on the coal option in early 1984. The Northern Territory Gas Consortium of AGL, CSR, Westpac, Moonie Oil, Boral and Nabalco got together and frantically worked at the feasibility and economics of a gas option. John Butters, who passed away in 2006 will be remembered as a strong supporter of the gas 1 The Amadeus Basin to Darwin Gas Project, Dr E.K. Campbell, paper to 1985 APIA International Convention, Sydney Page 1 option, became chairman of the consortium that designed, constructed and operated the 1628-kilometre pipeline later to be called NT Gas Pty Ltd. The results of the consortium’s studies were presented to the NT Government in August 1984 following which negotiations with the gas producers for wellhead gas, the pipeline consortium for gas transportation and a change from coal fired for gas burning generators commenced. The gas option was becoming a reality. NT Gas Pty Ltd (32% AGL, 32% CSR, 32% Moonie Oil, 2.5% Darnor (NT Government), 1.5% Centrecorp Aboriginal Investment Corporation Ltd.) was formed to manage the pipeline assets which were held in the Amadeus Gas Trust. Gas supply agreements with the Northern Territory Electricity Commission (NTEC – now Power and Water Corporation) and gas producer agreements with both the Magellan and Mereenie joint ventures were entered into culminating in the establishment of the leveraged lease facility with ANZ Bank, the nominated manager. Supply was initially to be only from Palm Valley but the Mereenie Joint venture partners, some of whom were also in the Palm Valley joint venture, struck a deal with NTEC to provide 20% of the gas at a discounted price in order to pay for the Mereenie spur and more importantly the oversizing of the pipe from Palm Valley to Mataranka from 12 inch to 14 inch to cater for future gas supply to Nabalco at Gove. In 1984 construction of the Amadeus Basin to Darwin Pipeline, now known as the Amadeus Gas Pipeline commenced. It was commissioned in December 1986 less than 3 years after the feasibility study was first accepted. The construction of the pipeline was no mean feat. It required the co-ordinated efforts of four different construction companies and was completed in 5 different spreads. This delivery approach was required to enable the pipeline to be constructed in less than two years and to avoid the wet season conditions prevalent in the tropical northern regions of the Northern Territory. The Amadeus pipeline originally shipped gas from the Palm Valley and Mereenie fields to the Power and Water Authorities’ Tennant Creek, Katherine and Channel Island power stations. Since its initial construction the pipeline has continued to ship natural gas almost entirely for power generation purposes. The Amadeus pipeline has seen many additions and remains the backbone of all gas supply in the NT. Gas related activity was spurred on, all of it reliant on the presence of the Amadeus pipeline, and the developments have been as follows: 1988 Cosmo Howley pipeline (25km) – gas fired power station at the Cosmo Howley gold mine. In 2004/05 the power station ceased electricity generation. The Cosmo Howley pipeline was abandoned in 2008; 1988 Elliott pipeline (2 km) – gas fired power station for the Elliott township; 1989 Manton pipeline (300m) – gas for a temporary power station at Manton. The power station ceased electricity generation prior to 2001 and the pipeline was abandoned; 1995 McArthur River pipeline (330 km) – gas fired power station at the McArthur River mine; Page 2 1996 Darwin City Gate to Berrimah pipeline (19 km) - gas supplied to commercial and industrial users in the Darwin industrial estates and East Arm Wharf areas; 2002 Katherine and Tennant Creek Sleeper Plants – gas supplied for the production of railway sleepers for the Adelaide to Darwin railway construction; 1996 Mt Todd pipeline (10 km) - gas fired power station at the Mount Todd mine. In November 1997 mining operations stopped. The Mt Todd lateral is currently suspended awaiting a decision on future operations of the Mt Todd mine; 2008 An additional supply point at Ban Ban Springs was added to the pipeline in 2008, bringing gas into the Amadeus pipeline from the Blacktip Gas Field via the Bonaparte Gas Pipeline; 2009 Weddell lateral (1.3km) - gas fired power station at Weddell. This connection also became a potential supply point in 2009 with the construction of the Wickham Point lateral which allows gas receipts from the Darwin LNG Facility. This receipt point is an emergency supply point if the Blacktip field is unavailable for delivery to the Darwin Power Stations. Gas receipts come from the Bayu Undan gas fields; 2014 A gas offtake facility was built to supply gas for electricity generation primarily to power the refrigeration plant of the Noonamah Abattoir, a beef processing facility. 2016 Inpex gas plant connection that has used the Amadeus pipeline for initial fuel gas and plant commissioning and will then become another emergency supply point for increased energy security. 2018 - Northern Gas Pipeline connection to ship natural gas from gas producers in the NT to the east coast gas market. Dynamic transportation changes over the years The early years saw pipeline flow rates in the Amadeus pipeline averaging approximately 16 PJ/annum such that no compression was required to move the gas north from the Amadeus gas fields, some 1628 kilometres to the main power station on Channel Island. Electrical power use increased in Darwin and to accommodate the peak electricity loads in the wet season, a compressor was installed in 1995 at approximately the half way-point at Warrego. As Darwin and the NT grew the requirement for the Warrego compressor became full time. In the summers of 2007 and 2008, the Amadeus Basin gas reserves were unable to meet the peak gas demand and although the pipeline capacity existed, the gas was not able to be extracted at the rates required. As a consequence, significant amounts of diesel were used to supplement the gas for power generation. In 2009 the Darwin LNG supply point into the Amadeus pipeline was commissioned to provide an additional supply of gas and to displace the diesel. This gas was initially supplied to the Weddell Power station. Shortly after in the same year, the Blacktip supply came online via the Bonaparte gas pipeline. The initial tranches of gas from the blacktip fields were receipted prior to the completion of the Blacktip gas processing plant at Wadeye. The Amadeus pipeline was used to blend semi processed Blacktip gas with on specification Page 3 Amadeus Basin gas to meet the NT gas specification. Once the production facility at Blacktip was completed the Warrego compressor was no longer required and has since been mothballed. Now, with the operation of the Northern Gas Pipeline coming to fruition, and the prospect of indigenous NT gas reaching the east coast gas market, there is the potential in the near future for compression of the Amadeus pipeline to be required once again. The Amadeus Pipeline’s Peers The State-controlled Gas and Fuel Corporation of Victoria was formed in 1950 and charged with the specific goal of constructing a brown coal gasification plant at Morwell based on the German Lurgi process.
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