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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