Quietly pumping energy

The phrase “out of sight, out of mind” is very true for the vital parts of the New Zealand energy sector that transport over half the country’s total energy needs, writes Neil Ritchie.

The only time pipelines get a mention in the media is usually when something goes wrong – a gas leak igniting or, in some countries, locals hacking in to oil pipelines for fuel, usually with equally disastrous results.

In New Zealand there have been no such major incidents.

Our North Island pipelines – there is no reticulation in the South Island – continue pumping gas, oil products and methanol around the clock, seven days a week, usually 365 days a year, largely un-noticed.

But without the high-pressure and low-pressure gas networks and the Marsden Point-Wiri oil products line – much of industry and commerce, not to mention all motor vehicles in the greater Auckland region, would slowly but surely grind to a halt.

There are more than 3400 kilometres of high-pressure gas transmission pipelines in New Zealand with two main transmission entities: the Kapuni transmission network, which is owned by listed energy infrastructure company Vector, and the Maui pipeline, which is owned by the Maui partners Shell, Todd Energy and Austrian firm OMV but operated by Vector.

Gas from the offshore Maui and Pohokura fields, together with that from the onshore McKee, Mangahewa and other fields is delivered into the Maui pipeline.

There are also more than 2800 kilometres of intermediate, medium and low- pressure gas distribution pipeline networks around the North Island connected to the high pressure transmission system.

As well, there are gas lines to Contact Energy’s New Plymouth and Taranaki Combined Cycle, Otahuhu (Auckland) power stations, and to Genesis Energy’s dual-fuelled (gas or coal) fired Huntly and nearby E3P power stations.

There are also smaller pipelines from several onshore Taranaki fields – owned by Shell, Australian company Origin Energy, or private New Zealand firms Todd and Greymouth Petroleum – connecting into nearby high-pressure systems or transporting product (gas, oil/condensate) to Port Taranaki, New Plymouth, or the nearby Omata tank farm.

There are also several subsea pipelines to shore – from Maui, the more northern near-shore Pohokura, and, from the third quarter of 2009, from the Kupe field off south Taranaki. As well, there are pipelines from the Methanex methanol and Motunui and Waitara Valley methanol plants to the Omata tank farm and from there to the nearby port.

Further north, a pipeline has been pumping various petroleum products from the Marsden Point oil refinery to Wiri in south Auckland since 1986.

This pipeline initially pumped about 1.5 million tonnes of product per year to New Zealand’s largest city but that has been expanded to ensure about 2.4 million tonnes of product per annum is transported via pipeline, rather than by road or sea tankers.

All these pipelines have to be inspected, maintained and cleaned. Sometimes there are aerial surveys, others times people inspect the pipelines on the ground.

At other times, different types of intelligent porcine animals – specialist tools often looking like huge bottle brushes, and known in the industry as pigs – are inserted into pipelines to internally inspect and/or clean them.

The development of the pipeline networks – some of which are about 40 years old – was, in some ways, reminiscent of pioneer New Zealand.

A Shell-BP-Todd consortium discovered the onshore Taranaki Kapuni gas-condensate field in 1959 but needed an extensive pipeline network to major industrial users to make field development economic.

So, surveyors spent many months, if not years, mapping out the best route for the pipeline over pleasant Taranaki farmland, rugged rural bush and countryside and into cities and towns.

There were also years spent digging the ditches in which to lay the pipeline – from Kapuni to New Plymouth and Hawera, then north to Hamilton, Auckland and Whangarei (and later to the Bay of Plenty, Taupo and Gisborne) or south to Wanganui, Palmerston North and Wellington (later to Hawke’s Bay).

Full field production was not achieved until 10 years later and Kapuni, which has already produced far more than initially expected, should last for at least another decade yet.

Construction of the much bigger (about four times the capacity) but shorter (in length) Maui pipeline started after the then giant gas field was discovered by the same consortium off Taranaki in 1969.

This time land was surveyed from Oaonui – the proposed site of the onshore production station – north around the Taranaki coast to New Plymouth and then up – not too far away from the Kapuni pipeline – to Rotowaru near Huntly.

Maui pipeline construction was an equally arduous task – again over some flat farmland, rolling countryside but also some rugged regions.

The offshore field did not start commercial production until 1979 – another 10-year delay.

There are many issues facing the New Zealand gas industry today, including enhancing wholesale markets through better access to processing facilities; transmission and distribution networks; and the better operation of those wholesale markets through improved interconnection, reconciling and balancing of supplies and switching arrangements, according to Gas Industry Company chief executive Christine Southey.

Transmission matters include an extensive review of open access agreements, pipeline balancing, interconnection and capacity. Interconnection issues relate to the ability of new users to connect, developing guidelines to facilitate that, and assessing current capacity arrangements.

There are also short-term trading issues – the development of a spot market for gas, including the nominations/scheduling of gas sellers and buyers, effective allocation and balancing regimes to ensure desired quantities of gas are delivered when needed, and interconnection regimes between the Maui and Vector systems.

The Maui pipeline faces some competition from Vector’s Kapuni North pipeline for the business of gas shippers from Taranaki northwards. But given their relative capacities, competition between the two pipelines is not vigorous, particularly for large loads. In addition, individual shippers of gas will look more to the proximity of a particular gas field to a pipeline network, than to any price differentials between the Maui and Vector networks in determining which pipeline to use.

However, Taranaki’s burgeoning oil and gas sector is placing greater demands on the region’s aging infrastructure, particularly its pipeline network, according to New Plymouth-based Core Group.

Company director Richard Smith says the safety management aspects, the risk assessments of the pipeline systems, are increasing, through regulation and because of the increasing age of the infrastructure.

Most pipelines have to comply with the Health and Safety in Employment (Pipelines) Regulations 1999, and all owner-operators have to have current certificates of fitness for their pipelines. The regulations were introduced in 1999 and certificates have to be renewed every five years, meaning that renewals for a third term are needed now.

And the recently-revised reticulated gas standards now more accurately reflect the requirements of the country’s multi-field, multi-carrier pipeline provisions, according to Stephen Parker, executive director of the Gas Association of New Zealand.

The 2008 version replaces a 1999 version, with key components that include all reticulated gas still meeting tight specifications regarding quality and quantity.