On 3 June a fire on the Sinbad platform pipeline caused ruptures and fires on two pipelines taking processed gas to the Western Australian mainland. The rupture forced the evacuation of 152personnel from Varanus Island, 116 km offshore Dampier in Western Australia.

The hub was responsible for generating 30 per cent of Western Australia’s domestic gas supply. Before the incident total production through the hub was 315million cubic feet per day (MMcf/d), with the vast majority of the customers being industrial users.

Apache Energy and the Western Australian Government were quick to respond to the incident. Managing Director Tim Wall said the company’s initial response focused immediately on the safety of its personnel and the environment.

After completing an initial damage assessment at the processing hub on 24 June, Apache outlined a timetable for restoring production at the site by mid-August.

Mr Wall said “Our estimated timetable is to restore gross production at a rate of 180MMcf/d of natural gas through the East Spar joint venture processing facilities by 15 August, ramping up to 315 MMcf/d in December as the Harriet joint venture facilities are returned to production.

“We are making every effort to meet or beat this timetable. We have 146 people on Varanus Island conduction clean-up and reconstruction efforts. Since the incident occurred on 3 June, Apache engineering teams have been canvassing the world for replacement equipment in an effort to minimise repair time.”

The gas hub serves both the Harriet and East Spar joint venture projects. The rupture occurred adjacent to the Harriet processing facilities, which are undergoing significant repairs. Damage occurred at three sales gas compressors, the hot oil system, control system and flare stacks.

Located the greatest distance from the rupture, the East Spar facilities sustained less damage. Export pipelines and associated valves, two compressors, instrumentation and control facilities are currently being repaired.

The incident caused supply disruptions to a number of major pipelines, including the Goldfields Gas Pipeline and the Telfer Gas Pipeline. Santos’ John Brookes field completely ceased production as the gas from the field is processed on Varanus Island.

Apache is working with the Western Australian Government to reduce the impact of the supply disruption. Solutions to manage the shortages include accessing gas from the North West Shelf and other small gas suppliers; accessing energy from other sources to free up gas, including the fast-tracking of the 110 MW Kwinana coal-fired power station, as well as working with industry to shift demand to low peak times.

Gas supplies were also interrupted at the West Kimberley Power Project’s Karratha LNG plant.

The Department of Industry and Resources and the National Offshore Petroleum Safety Authority’s (NOPSA) work to determine the cause of the incident is continuing. At the time of going to print, NOPSA had completed phase 1and 2 commissioning inspections.

In response to the gas crisis, Western Australian Energy Minister Francis Logan launched an online Gas Bulletin Board to provide a forum for gas to be sold. The bulletin board allows gas users and producers to make trades that are facilitated by the Independent Market Operator.

Clough was appointed to assist Apache Energy with essential repairs to the Varanus Island gas plant. A Clough project team, which had been working on a compression upgrade project on the island, is the core of the repair team assisting Apache personnel.

Responses to the incident

Apache Energy

Immediately after the incident, Apache Managing Director Tim Wall commended the level of cooperation from its customers and other stakeholders.

“We are aware that this incident will result in downtime for our customers and will work with other energy suppliers and the gas transmission pipeline operator to help minimise the impact of this incident.

APIA

The Australian Pipeline Industry Association (APIA) responded to the incident – and to claims that more pipeline infrastructure was needed – by saying that the incident indicated a need to focus on Western Australian production not transmission.

APIA Chief Executive Cheryl Cartwright said “The current problem in Western Australia is not a gas transmission issue – it’s a production issue. The Opposition used the accident in Western Australia to generate discussion about the possibility of constructing a second major pipeline, rather than having the Dampier-Bunbury Pipeline as the major, very large, transporter of natural gas. This argument does not make sense. If the gas is there – if it’s available – it can be transported and in the case of Western Australia, the Dampier-Bunbury Pipeline can transport the gas. The Varanus incident is not a matter of a transmission problem – it’s a problem at the production end.”

Prime Minister Kevin Rudd

“I think people in the east have not quite caught up with the severity of the impact which this is having across the WA economy. It is huge,” said Prime Minister Rudd.

APPEA

The Australian Petroleum Production & Exploration Association (APPEA) praised all involved in the evacuation of personnel from Varanus Island.

“Safety of our people is the upstream oil and gas industry’s top priority and it is to Apache’s great credit that its safety procedures have been implemented so well,” APPEA Chief Executive Belinda Robinson said.

Alcoa

Australia’s major aluminium producer and industrial gas user, Alcoa has said that the Western Australian gas supply issue reinforces the need for domestic energy security.

An Alcoa spokesperson said “We are mindful of the gas needs of the broader community and support the State's efforts to preserve the community’s fuel.”

Alcoa is encouraging all of its employees to reduce their personal energy usage and is exploring alternative gas supply solutions in tight gas resources.