Gas Import Jetty & Pipeline Discussion

proposed pipeline Westernport Bay

proposed pipeline Westernport Bay

proposed pipeline Westernport Bay

Starter

Why oh why is this even being discussed? Madness. A Ramsar site - should not even be on the agenda. We, Australia and companies like AGL could be leading the world right now in renewables. Please stop this project before it goes any further. Does AGL accept AEMO’s projection in its June 2018 Gas Statement of Opportunities that there are no supply gaps forecast before 2030? Can you guarantee there will be no damage to the Ramsar-listed wetlands of Westernport Bay? Will the marine literature review incorporate case studies on the impacts of FSRUs already in operation in similar environments, including the impacts of entrainment, discharge, marine noise and accidents/pollution? Considering that Victoria is already a net exporter of gas, could you explain why have you chosen a Ramsar-listed wetland site as the preferred location for this project? Has AGL considered alternatives to their destructive gas import terminal? For example, have you looked at how to reduce the need for gas through efficiency upgrades and switching to electricity where possible? Or using existing pipeline capacity for bringing gas into Victoria?

6 REPLIES 6

Re: proposed pipeline Westernport Bay

AGL Employee

Hi Stefsta,

 

Thank you for your response.

 

There have been mixed responses in the media about the supply gap forecast.

 

Early in 2018 the media reported Victoria would experience significant gas shortages within three years based on a gas forecast report from the Australian Energy Market Operator (AEMO) despite falling gas consumption in the state. AEMO told the media it was hoping the report would encourage a market response to help fill the gap but warned some intervention may be needed if the private sector does not come up with a solution. 

 

In the June 2018 AEMO Gas Statement of Opportunity, the AEMO stated ‘no supply gaps are forecast before 2030 under expected market conditions.’ But the AEMO’s executive general manager of planning and forecasting, David Swift still warned that the supply-demand balance in the Australian gas market was still very tight. 

 

The recently released AEMO 2019 Gas Statement of Opportunities (GSOO) said the east coast gas market faces tight supply from 2021 and shortfalls from winter 2024 if more is not done to replace rapidly declining output from Bass Strait and supplies from Queensland limited by pipeline capacity.

 

‘‘Southern Australia’s overall supply demand balance for 2021-2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets in the context of an evolving and dynamic energy system,’’  AEMO’s chief system design and engineering officer Alex Wonhas told the ‘Australian Financial Review’ when the report was published on March 28, 2019.

The report said:

“Supply from existing and committed gas developments is forecast to provide adequate supply to meet gas demands until 2023. However, risks remain that any weather-driven variances in consumption or electricity market activity that could increase gas demand, creating potential peak-day shortages as outlined in AEMO’s 2019 Victorian Gas Planning Report.”

 

We certainly support your suggestions around electricity. While we support this move and are working towards a more energy efficient future, it unfortunately will not happen overnight. The move will take time and money to guarantee energy for us and our customers. LNG imports have an important role in this transition. 

 

Over 80 per cent of electricity produced in Australia is sourced from the combustion of fossil fuels. Given its sheer scale, decarbonising the generation sector is likely to take several decades of replacing the existing generation fleet with low-emissions substitute technology such as solar and windfarms. 

To deliver reliable and sustainable energy at the lowest cost possible requires renewable energy from wind and solar combined with more flexible energy sources, like quick-start gas generation, that can be turned on whenever renewables are not available (i.e. low wind, night time and when there is cloud cover).

 

While we undertake this transition, the Gas Import Jetty will be used to provide a reliable and secure supply of gas for quick-start gas powered electricity generation which, in turn, is needed to enable a cost-effective energy transition to occur, both for AGL, and for the Australian electricity sector.

 

Even if the supply of gas from unconventional fields in Queensland was available to the pipeline connecting them with Victoria, Victoria would not be able to supply enough during peak winter gas demand due to the limited capacity of the pipeline. Pipeline capacity constraints and the lead times of new gas production underpin the proposals for LNG imports. Gas supplies from the North West Shelf are not available to Victoria because there is no pipeline across the Nullarbor. 

 

We understand your concerns around the selection of Crib Point, particularly considering its environmental significance. It was not a decision we undertook lightly. We investigated several different sites across Australia, including Crib Point in Victoria, Port Adelaide in South Australia and Port Kembla in New South Wales. The evaluation process considered several factors including access to key gas markets, cost of incremental pipeline transmission, availability of suitable land for onshore facilities, cost of existing or new build pipelines, existing investments within AGL’s wholesale gas portfolio and marine and port suitability. 

 

Crib Point was selected due to its existing jetty, already importing liquid fuels and only requires bed levelling to shave off some high points at the berth.

 

A FSRU has in-built flexibility because unlike a coal fired power station, which takes seven or eight years to build and leaves a lasting imprint, Crib Point will host a FSRU which will receive gas from the most competitive source via a jetty which has been there for 50 years. If the demand for gas reduces, we can bring in less gas. The FSRU is likely to be leased and if the facility is no longer needed the FSRU will be unmoored and will sail away.

 

We are looking into whether the existing 26 or more FSRU’s operating around the world are being evaluated. However, it is up to the experts who conduct the report as to whether this will be included in their reports. There is a requirement from the Victorian Government to assess these types of potential impacts. Under s.4.2 of the EES Scoping Requirements, the biodiversity requires the assessment of impact such as, entrainment, discharges, noise in relation to flora and fauna and leaks or spills.

 

We agree Western Port is an important environmental asset that must be cared for and recognise the strongly held community views about the unique environmental significance of Western Port as a Ramsar site. 

 

To even consider this project, we must plan for any possible environmental impacts (the worst case scenarios) assuming they could happen no matter how unlikely.   We cannot guarantee that the project would have no effect on the environment, and we realise for many in the community, this is not good enough. The Victorian Government has required us to undergo an Environment Effects Statement to assess the potential effects of the project on the environment and assess alternatives to avoid and mitigate effects. The Minister for Planning Richard Wynne said “The EES will investigate the proposal’s effects on native vegetation, wildlife and marine life as well as Aboriginal cultural heritage areas.” This is currently in progress.

 

A final EES assessment is made by the Minister for Planning, not AGL. If these potential environment effects cannot be acceptably addressed the project would not go ahead. 

The AGL Board has not made a final decision on whether or not to proceed with the proposal.  A final investment decision will not be made until the final EES assessment is complete. 

Re: proposed pipeline Westernport Bay

Transformer

@LachlanS  What you said and I quote " Crib Point was selected due to its existing jetty, already importing liquid fuels and only requires bed levelling to shave off some high points at the berth." is not true.

 

Could you confirm or deny that many upgrades to the jetty and berth 2 will need to be undertaken to facilitate your proposal such as...

Replacement of the pier head on Berth 2

Extra berthing dolphins

Loading arms

New Piles etc etc...?

 

 

Re: proposed pipeline Westernport Bay

AGL Employee

Hi KerryRainer,

 

Thanks for your input.

 

We endeavour to provide the most accurate answer to your question relating to jetty upgrades.

 

In order to do that, we need to speak with the Port of Hastings Development Authority, as they own the jetty and will be carrying out the works.

 

We are just letting you know that we have received your question and will respond to it once we have conferred with the jetty’s owners.

 

Thanks,

Lachlan

Re: proposed pipeline Westernport Bay

AGL Employee

Hi @KerryRainer,

 

Yes. You’re right.

 

Our comment was in response to the consideration of other sites. Unlike other sites, Crib Point has an existing jetty already in commercial use. Our alternative, building a new jetty from scratch, was likely to cause even greater environmental impact. This was one of the reasons we were attracted to this location.

 

The jetty was built in the 1960s by the petroleum industry to help fulfil Victoria’s needs and is still used to bring petroleum into Victoria.

 

However, we will still need to do upgrade works on the jetty, including some of those you have mentioned. We are collating a complete list of the upgrades and will post it on the forum when we have received it.

 

But we certainly will take your comments on board and incorporate the refurbishment into our response on site selection so thank you for pointing that out to us.

Re: proposed pipeline Westernport Bay

Transformer

@LachlanS 

Thank you for your reply, but to clarify something,your previous comment about bed leveling was in relation to the Crib Point proposal and not the other sites.

 

In relation to site selection could you explain how AGL can  even consider a Ramsar Listed Wetland Area with a non fit for purpose jetty OVER an existing VERY INDUSTRIAL site such as Port Kembla?

 

 

 

 

 

 

 

Highlighted

Re: proposed pipeline Westernport Bay

AGL Employee

Hi @KerryRainer,

 

Sorry for the delayed response.

 

AGL did assess Port Kembla as a proposed location for this project. Selection of our site was a difficult decision and we did not undertake it lightly.  

 

When reviewing the sites, we considered Crib Point best placed to serve Victoria, Australia’s largest gas market, and take advantage of the existing pipeline network, industrial port facility and associated infrastructure. It is also in a good position to serve South Australia and New South Wales. 

 

As highlighted in the 2019 AEMO report (p.53), ‘an import terminal in Victoria, either Melbourne or Gippsland, has the biggest projected impact to reduce projected shortfalls.’ A development in this location is estimated to reduce total system shortfalls by up to 265PJ a year by 2030 and delay the shortfalls until 2029. 

 

We found Port Kembla to be less optimal as the location for the facility due to pipeline constraints, the need for extensive dredging and physical constraints such as increased risk of collisions and swell. 

 

Victoria uses approximately 50% of the gas in the south-east and the gas is intended for the south-east coast. The Port Kembla location has constraints to access a broader market, which limit the ability of the project to supply more generally the east coast gas market and fulfil the shortfall. Significant pipeline modifications were required to transport gas to other demand centres in Victoria.  

 

The Eastern Gas Pipeline (EGP) supplies gas between the gas fields in Gippsland in Victoria and major gas markets in NSW and the ACT. The EGP pipeline only allows gas to flow in one direction, from Victoria to NSW and does not having sufficient capacity to supply the south-east gas market. It was therefore considered that an additional connection to the Moomba to Sydney Pipeline (MSP), which is bi-directional, would be necessary.  

This would increase the gas base price due to the additional gas transmission tariff. 

 

Extensive dredging, an estimated 600,000m³, would also be required. 

 

Due to the limited turning space, vessels departing from the berth would require assistance from tug boats, including departure for emergencies. In addition, the wharf is armoured with rocks on its western side, increasing the risk of damage to visiting LNG carriers due to the potential effects of passing ships and ocean swell. It was identified that the FSRU would need to be berthed further west to leave sufficient safe clearance from the tip of the breakwater. This would result in a requirement for dredging of shallow water to the west of Berth 201 and subsequently would result in misalignment with existing berthing dolphins. Due to the industrial nature of the port, it was considered highly likely the land to be dredged could be contaminated with heavy metals, requiring safe disposal in a licenced land based facility and potential release of contaminants in waterways.  

Reclamation of a large part of the Outer Harbour was under consideration to accommodate dry and containerised shipping.

 

However, any such development would increase ship traffic in the Outer Harbour and therefore increase the risk of collision with an FSRU moored nearby, place the LNG carriers and FSRU in the trajectory of ships leaving other terminals, and reduce the manoeuvring space in the Outer Harbour, potentially leaving insufficient room to turn visiting LNG carriers. Additionally, it was considered that reclamation of the southern harbour could make the swell effect worse in the Outer Harbour and impact on the mooring of an FSRU and ship to ship transfers by increasing and changing the direction of swell waves, as there is less sea area in which the swell can dissipate.  

 

While we understand that Australian Industrial Energy (AIE) is planning to develop a gas import terminal at Port Kembla, we can’t comment about progress and timing of the project. However, the AIE proposal is focused on meeting the gas needs of the NSW market not Victoria and is proposing to dredge a new berth pocket in the Inner Harbour. 

 

AGL welcomes the increased competition, it’s good for consumers. However, we will continue to monitor the supply demand balance across the south-east coast gas market before we make a decision to go fund the Crib Point project. 

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