2009 Annual Report MOOMBA TO PORT BONYTHON...

2009 Annual Report

MOOMBA TO PORT BONYTHON LIQUIDS PIPELINE

Pipeline Licence 2

Document Number S-34-102-AR-G-010

2009 PL2 Annual Report

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TABLE OF CONTENTS 1 PURPOSE.........................................................................................................................4 2 SCOPE..............................................................................................................................4 3 TECHNICAL INFORMATION............................................................................................4 4 OPERATIONAL & MAINTENANCE ACTIVITIES - 2009 ..................................................6

4.1 Risk Assessment Review...........................................................................................6 4.2 Training ......................................................................................................................6 4.3 Operations & Maintenance Activities .........................................................................8

5 INCIDENT REPORTING.................................................................................................13 6 LAND MANAGEMENT....................................................................................................13

6.1 Land Owner Liaisons ...............................................................................................13 6.2 Pipeline Safety Awareness ......................................................................................13 6.3 Pipeline Location and Referral Services ..................................................................14

7 ENVIRONMENTAL MANAGEMENT ..............................................................................14 8 EMERGENCY RESPONSE ............................................................................................14 9 REGULATORY COMPLIANCE.......................................................................................15 10 RISK MANAGEMENT .................................................................................................16 11 MANAGEMENT SYSTEM AUDITS.............................................................................16

11.1 Environmental Audits ...........................................................................................16 11.2 Health and Safety Audits......................................................................................16 11.3 Management Audit ...............................................................................................17

12 REPORTS ISSUED DURING THE 2009 LICENCE YEAR .........................................17 13 VOLUME OF PRODUCT TRANSPORTED.................................................................17 14 PROPOSED OPERATIONAL ACTIVITIES FOR 2010................................................18 15 STATEMENT OF EXPENDITURE ..............................................................................18 16 KEY PERFORMANCE INDICATORS .........................................................................18 17 CONCLUSION.............................................................................................................19 Appendix A – Assessment of Declared Objectives ................................................................20 Appendix B – Pipeline Cathodic Protection Data ...................................................................28


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LIST OF ABBREVIATIONS

AFD Axial Flaw Detection Tool ALARP As Low As Reasonably Practical AS2885 Australian Standard 2885 Pipelines - Gas and Liquid Petroleum AVT Accuracy Verification Test CDP Corrosion Detection Pig CFS Country Fire Service CMMS Computerized Maintenance Management System (MAXIMO) CP Cathodic Protection CPU Cathodic Protection Unit Cu/CuSO4 Copper/Copper Sulphate DCGV Direct Current Voltage Gradient DNV Det Norske Veritas EGP Electronic Geometry Pig EMS Environmental Management System ERE Emergency Response Exercise ESD Emergency Shut Down FFS Fitness For Service GPS Geographical Positioning System HAZOP Hazard Operability HELM Heritage, Environment and Land Management HSE Health, Safety and Environment LMS Land Management System MAOP Maximum Allowable Operating Pressure MAPS Moomba to Adelaide Pipeline System MFS Metropolitan Fire Service MLV Mainline Valve NDT Non Destructive Testing PIRSA Primary Industries and Resources of South Australia PL2 Pipeline Licence 2 PS 1-4 Pump stations 1, 2, 3 & 4 POMS Pipeline Operating Management System ROW Right of Way RTU Remote Terminal Unit SCADA Supervisory Control and Data Acquisition SEO Statement of Environmental Objectives SES State Emergency Service SMS Safety Management System SRB Sulphate Reducing Bacteria SWER Single Wire Earth Return TJ Tera Joule UHF Ultra High Frequency VHF Very High Frequency


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1 PURPOSE This report is submitted in accordance with the requirements of Pipeline Licence 2 and the South Australian Petroleum and Geothermal Energy Regulations 2000.

2 SCOPE The Moomba to Port Bonython Liquids Pipeline is owned by the South Australian Cooper Basin Joint Venture and is operated and maintained under contract by Epic Energy. This report reviews operations carried out during 2009 and intended operations for 2010. In accordance with the Petroleum and Geothermal Regulations a performance assessment is also provided with regard to the Statement of Environmental Objectives for PL2.

3 TECHNICAL INFORMATION Table 1 summarizes the technical aspects of the PL2 and Figure 1 shows diagrammatically the pipeline system.

Table 1 - Moomba to Port Bonython Technical Data

Date Constructed 1983 Date Commissioned 1984 Length 659km External Diameter 355.6mm Wall Thickness: - Normal - Special Crossings (rivers, roads etc.)

7.14 mm 8.74mm

Pipe Grade API 5LX 52 MAOP 10,340kPa Coating Double layer polyethylene tape reinforced with

adhesive butyl rubber Depth of cover Nominal 900 mm

1200mm at road, rail and creek crossings Main Line Valves Adamson & Chronsiter Gate valves

(25 in total) Actuators Shafer

(17 in total) Actuators 8 Manual gear type operators Fluid Liquid Hydrocarbon Pump Stations 1 Active (Moomba)

1 Decommissioned (PS3 – 370kms south Moomba) Meter Stations 1 with 3 runs (Moomba) Corrosion Protection Secondary protection provided by an impressed

current CP system 14 transformer rectifier units installed

SCADA system Digital microwave link from Moomba to Port Bonython with VHF radio coverage for voice communication and

UHF from a number of valve sites.


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Figure 1 - Moomba to Port Bonython Pipeline


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4 OPERATIONAL & MAINTENANCE ACTIVITIES - 2009

4.1 Risk Assessment Review The last review of the AS 2885 Risk Assessment was carried out in late 2006, as part of this risk assessment review, additional requirements of the Draft AS 2885.1 DR 04561] ref 3 was taken into consideration. The review of the risk assessment found that in most cases the workshop team considered that the protection measures in place reduced the risks of the identified threats to acceptable levels. Where there was doubt or further investigation was deemed necessary, an action was raised. Two actions identified in the workshop are still in progress, work continues on the ongoing depth of cover restoration program in-line with the original work schedule and a review to assess the adequacy of standard designs with respect to power line faults to ground. The next AS 2885 Safety Management System review is to be completed by 2012. A risk assessment was carried out in 2009 as a result of an internal metal loss defect indentified from the Rosen AFD inline inspection tool run between Moomba and Pump Station No#2. Metal shavings detected in the pig receiver vessel after a pigging operation to remove a flow enhancer nozzle and a hot tap drill was the driver for running the inline inspection tool. The final report from the AFD inline inspection tool reported minor spirally orientated gouging anomalies with between 5%-9% wall loss. The Fitness For Service (FFS) assessment determined a pressure restriction be applied until the defect could be excavated and a NDT inspection performed (phased array scan ultrasonic) to determine the full extent of the defect. Based on the NDT results, further assessments were performed (i.e. a second FFS calculations and a fatigue desktop analysis), recommending that the MAOP needs to be restricted from 10.38 Mpa to 9.60 Mpa until repairs are carried out. The replacement is expected to occur by the end of 2012. A follow up on the more affected areas of the pipe by NDT every six months will be applied to ensure no further deterioration has occurred until the pipeline is replaced.

4.2 Training Epic Energy is committed to developing the skills of their employees and contractors to meet the operational needs of its business. During 2009 staff training was conducted in-house using a number of techniques which included training courses developed specifically for Epic Energy and delivered using self paced modules or as a group presentation using either a training service provider or suitably skilled Epic Energy staff. In addition to internal training, staff attended a range of external courses selected to further enhance their knowledge of the natural gas and liquid hydrocarbon pipeline transmission industry. The range of training staff attended during 2009 included: 2WD Defensive Driving 4WD Drive & Recover SRODRV001 & 2 4WD Operate Light Vehicle PMASUP236A AS 2885.3 Pipelines Gas & Liquid Petroleum - O & M AVT Testing


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Backhoe Front-end Loader >= 2L Engine LB Basic Fire Prevention & Control (Extinguishers)/Refresher (Phase 3) Chemical Use and You Coaching & Teambuilding Skills Combustion Basics Concepts of Instrumentation - Instrumentation Modules Confined Space Awareness Confined Space Entry Continuous Improvement Control Systems Basics Corrosion Control Introduction (BL) CPR Data Capture/Eddict Dogging Certificate DG Drugs & Alcohol - Epic Energy 2009 Drugs & Alcohol - Epic Energy 2009 Supervisor Awareness EEHA Installation and Maintenance Effective Communication Electrical Equipment in Hazardous Areas Intro Elevated Work Platform WP Emergency Pipeline Repairs Engineering Change Management – Introduction ESM Engine System Management Excavation of Pipelines Fatigue & Stress Management Fauna Relocation & Management Flow Measuring Instruments – Basics Forklift Operator Certificate of Competency LF Gas Analysis Basics Gas Detection - Santos (Epic SA & Qld) General Principles of Pipeline Design GIS Training GPS/Palm Pilot Hazard And Incident Reporting Hazard Identification and Control Hazardous Materials (MSDS) Heat Stress - Santos (Epic SA & Qld) How to Become a Better Communicator Hydrocarbon Properties & Principles Instrument/Electrical Basics Introduction to AS2885 and the Australian Pipeline Industry Introduction to Pigging Introduction To The Role Of Health and Safety Representative Introduction to Turbine Engines Job Hazard Analysis LMS Computer Training Low Voltage Rescue Manual Handling Measuring & Reporting Carbon Emissions Mercury Awareness Metrotech Pipe Locator Training Natural Gas Filtration Introduction OHS Fundamentals Operations Field Induction


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Permit to Work Awareness 2009 Permit To Work System / Refresher Personal Protective Equipment Personnel Movement Tracking Pipe Location - General Epic Module Pipeline Risk Management Pipeline Surveillance Pipeline Voice Communications Pressure - Instrumentation Modules Pressure Reduction Skid Operation Pressure, Temperature & Level Indicators – Basics Preventing Discrimination & Harassment Principles of Flow Measurement Process & Instrumentation Diagrams and Drawings Responsible Officer Restricted Electrical Workers Licence (NREL) Santos - Moomba Plant Induction Santos Ballera Induction - QLD Santos ID Santos Level 1 Induction - QLD and SA Santos Level 2 - Moomba/Cooper Basin Induction Santos Level 3 Induction Santos Port Bonython Induction - SA Santos Rev 7 - Permit to Work System Santos Rev 7.3 - Permit to Work Santos Rev 7.3 Gap Training SCADA and Control Systems Basics Security Awareness Senior First Aid Full Certificate SA Senior First Aid Refresher SA Service Safety Inspection & Testing of Electrical Equipment 30239QLD Sunsmart - Working Safely in the Sun SWER Training The Atmosphere & Working With Gases Third Party Works Understanding Pipeline Licensee & Owner Obligations White Card - National OHS Common Industry Induction Work in accordance with an issued permit Working at Heights Working in Remote Locations Working Safely Near Pipelines & Pipeline Infrastructure Workplace Drugs & Alcohol Workzone Traffic Management

4.3 Operations & Maintenance Activities Epic Energy have been engaged by the South Australian Cooper Basin Joint Venture group (Santos) to operate and maintain the Moomba to Port Bonython liquids hydrocarbon pipeline in accordance with AS2885 and other relevant standards. All Preventative, Corrective and Reactive maintenance can be identified in Epic Energy’s CMMS and are scheduled by this system which generates work orders for maintenance staff to complete. Some of the key items in the maintenance schedule include:


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• Two monthly CP system transformer rectifier unit inspections • DCVG survey • Quarterly road & aerial patrols are been conducted with all action items identified during

the patrols rectified immediately by the patrolling officer or entered into the CMMS and scheduled for repair during other routine activities.

• Quarterly SCADA system MLV pressure & temperature transducer calibrations • Six monthly CP system full line surveys • Six monthly inspection and servicing of all portable fire extinguishers • Six monthly mechanical inspections, operational checks & servicing of equipment at all

MLV and scraper station sites • Six monthly Pig vessel and mainline valve bypass line relief valve checks • Pressure vessel inspections (using suitably accredited external contractors) on all vessels

on the Moomba to Port Bonython liquids hydrocarbon pipeline system. • Annual cleaning pigging operations • Communications system mast maintenance • Annual communications system un-interruptible power supply and battery maintenance • Annual communications system VHF, UHF and microwave bearer checks and tests • 3 yearly mast maintenance program was completed. • Excavation and repair of coating defects • Excavation and repair to two ILI defects. • Excavation and pipeline integrity inspections • Leak detection system tested A description of the Operations and Maintenance activities for 2009 is provided below.

4.3.1 Patrol Activities Three monthly road and aerial patrols (aerial patrols are conducted between PS3 and the Port Bonython terminal only) scheduled to alternate at six weekly intervals were completed in 2009. The road and aerial patrols ensure that the following pipeline activities are addressed: • Signage is in suitable condition and if not, repairs are affected as soon as is practically

possible. Any issues not addressed during the patrol are fed back into the CMMS in the form of a work order and scheduled for repair as resources permit.

• to ensure there are no unauthorized activities occurring along the pipeline route or at any of the facilities

• restoration of any soil erosion due to wind and water is addressed • there are no leaks occurring at any of the pipeline facilities or along the pipeline route • all sites are secure, kept clean, neat and tidy • Items including above ground pipe coating condition, fences, gates, padlocks, signage, fire

extinguishers, weeding and other housekeeping activities are addressed at the mainline valve and scraper station facilities associated with the pipeline system.

In 2009 during routine patrol activities reported several areas affected by water erosion after heavy rains and flooding were identified for repair, no other significant issues were identified during any of the patrols. An action resulting from a Santos risk assessment for an internal gouge defect at KP 78.74 required Epic Energy to conduct additional weekly road patrols between Moomba and Pump Station No#2. The purpose of these patrols was to inspect the integrity of the Moomba to Port Bonython liquids


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pipeline and the safe condition of the defect excavation site left exposed for future pipeline integrity monitoring activities. Based on the FFP and Fatigue desktop analysis carried out, these patrols were reduced from weekly to monthly intervals from September 2009

4.3.2 Leak Detection The Epic Energy Transportation Services Control Centre (TSCC) located in Melbourne operates a SCADA system that continuously monitors the Liquids pipeline. Incorporated into the SCADA is the Pipeline Leak Monitoring System that provides real time leak detection capability based on line pack inventory, flows in and out of the system, hydrocarbon type and, pressure and temperature change rates. This allows the duty controller to instantly identify any action anomalies that may be occurring and notify field maintenance personnel to investigate further onsite as required. The control centre staff can, if required, isolate the pipeline remotely using any one of 17 out of 24 valves, isolating sections of the pipeline to minimize any leakage should the need arise. The real time leak detection system is augmented by maintenance activities along the pipeline which assists in the identification of any pipeline leakage ensuring the appropriate resources are mobilized to address the problem in a timely manner. In addition to the field maintenance staff activities the pipeline operations group and senior maintenance staff carry out a daily check of the hourly line balance to ensure no significant leakage is occurring on the pipeline system again mobilizing staff to inspect any sites that they may identify. During 2007-8 Epic Energy upgraded their SCADA Host System. The Liquids Line SSI Leak Detection and Modelling software was successfully ported from the existing Telvent OASyS 5.2.2 SCADA System to the new Telvent OASyS DNA 7.4 platform in 2008. Currently both systems are operating in parallel for final commissioning and acceptance of the new operating system. The original Telvent OASyS 5.2.2 SCADA System will be decommissioned in the first quarter of 2009. A simulated test of the leak detection system is carried out annually in December in accordance with the annual maintenance plan. PL2 SCADA system has been 100% operative within TSCC using both the OASyS 5.2.2 and DNA7.4 platforms during 2009. Remote site connectivity has varied due to the effects of the microwave system reliability, power management and field equipment faults. Overall connectivity was 99%, with Moomba the lowest at 95% effected mostly by ageing equipment faults. The Liquids Leak Detection Model operated 99.7% of the time, with outages related directly to RTU communication problems at either Moomba or Port Bonython. The routine annual leak detection system test was successfully carried out.

4.3.3 Coating Integrity The 2009 a pipe coating assessment program was the follow up of a longer term program which was agreed on by Epic Energy and Santos. Based on the DCVG survey carried out in 2008 the following most significant defects with %IR drops ranging from 15% to 45% were inspected and repaired in 2009. KP130.176, KP144.169, KP210.625, KP228.218, KP288.256, KP418.543 and KP503.805 It was found that the pipeline coating system was generally in good condition. Defect areas where detected where there was evidence of minimal tape overlap, an abundance of rocks and boulders in the trench from construction, general handling damage of pipe coating during the construction stage


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and absence of padding had caused mechanical damages on the coating. The pipeline coating program is scheduled to continue into 2010 with the inspection of sites where pipe work enters the ground, particularly at MLV’S sites and excavation ,inspection and repairs to remaining coating defects with IR%> 15, Sites indentified for repair in 2010 include, KP 161.900 (MLV 12), KP256.073, KP352.634 (6” Bypass Kicker), KP352.634 (Pilot Isolation valve) & KP352.695 No major corrosion and pitting or evidence of any stress corrosion cracking was detectable on the pipeline. All corrosion defects were acceptable to the requirements of AS2885.3. In all defect inspected areas the cathodic protection system protected the pipeline from any extensive corrosion.

4.3.4 Cathodic Protection Results from the full line cathodic protection surveys conducted in February and August 2009 are presented graphically in Appendix B. These results show that the pipeline potential is generally within acceptable limits of -0.850 V to -1.175 V OFF potential versus copper/copper sulphate half cell. Low potentials were recorded between KP 221.9 and 352.6 during the February survey due to the transformer rectifier at Pump Station 3 being out of service. This section of the pipeline was resurveyed in May with satisfactory protection being achieved. During the August survey 94 % compliance was achieved with low protection levels recorded between KP 369.4 to 402.6 and KP 538.6 to KP 547.3. These low protection levels are currently being investigated. 4.3.5 Electrical and Instrumentation Routine quarterly pressure and temperature transmitter calibrations were completed verifying that accurate data was fed into the SCADA system allowing accurate control of the liquids hydrocarbon transportation process ensuring it stays within the design parameters at all times. Six monthly mainline valve operational checks were completed in conjunction with scheduled routine pressure and temperature transmitter calibration 4.3.6 Communications All process variables and valve control functions are communicated to the central control system located in Melbourne, Victoria via a microwave link that runs parallel to the buried pipeline system. In addition to the microwave link a VHF radio link to allow voice communications between staff and the control centre plus a UHF link to transmit process data and commands to the main microwave link from remote sites are also supported by the communications system. This system is essential for the safe monitoring and control of the pipeline and the following range of routine maintenance activities were carried out in 2009 to ensure the communications system provided a high level of availability and reliability: • Routine Microwave bearer, UHF and VHF communications system maintenance tasks. • Routine maintenance tasks associated with the SCADA RTU calibration. • Routine maintenance tasks associated with the communications system uninterruptible

power supply batteries and their associated charging system. • Routine maintenance tasks associated with the communications system solar generated

power supply batteries. • Six monthly communications equipment air conditioning unit maintenance.


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With the exception of several minor short period communication outages there were no significant communications issued reported in 2009.

4.3.7 Mechanical Routine six monthly mainline valve and scraper station maintenance tasks completed. All pipeline pressure regulator and over pressure protection devices were tested in accordance with the relevant Australian standard and the maintenance schedule. Ancillary equipment, such as pipe supports, pipe ground entry points, valves and pigging facilities, are routinely inspected as part of the facilities inspections or as a part of mechanical maintenance routines. In addition to the routine activities above, the maintenance staff have investigated and solved a number of corrective maintenance issues that have been identified as a result of the routine activities or from failures that occur in the day to day operation of the pipeline system. All mechanical and ancillary equipment is considered to be in good condition and fit for purpose

4.3.8 Pigging operations In 2009 seven pigging runs were scheduled and completed on the Moomba to Port Bonython liquids to: 1. Clean the pipeline and remove any water contaminates and monitor the pipeline for bacteria

levels. 2. Clean the pipeline and prove a clear passage for the Rosen ILI tool. 3. Run an AFD inline inspection tool between Moomba and PS2 to determine if the pipeline wall

thickness suffered any metal loss and pipeline integrity. This decision to run this tool resulted from a risk assessment workshop after metal consistent with the pipeline material was removed from the pig receiver after a previous pigging exercise to remove a stuck flow nozzle and hot tap drill.

The first program included two cleaning pigs fitted with gauge plates consistent with 96% of the internal pipe diameter, location transmitter and bypass valve. The program resulted in the gauge plates providing good consistent results compared to the 2005 data, proving the pipeline condition for the Rosen AFD tool. Both pigs were contaminated with waxy product from the Santos Moomba facility and confirming an additional cleaning pig was required prior to launching the AFD inline inspection tool. The second program included a cleaning pig with the intention of cleaning the pipeline of any waxy debris prior to launching the Rosen AFD inline inspection tool. The AFD tool failed to launch and with removal from the pig launcher it was confirmed the pig had substantial damage requiring the tool to be returned to Germany for repairs. A decision was made to run the cleaning pig through the entire length of the pipeline to remove any water contaminates and monitor for bacterial levels. The third pigging program include a cleaning pig constructed with a gauge plate to re-prove the pipeline passage between Moomba and Pump Station No#2 due to the delay with the AFD tool repairs. On April 21st the Rosen AFD inline inspection tool was launched at Moomba and successfully received at Pump Station No#2 on April 24th. The AFD tool confirmed an internal metal loss defect classified as a spirally orientated gouge with a metal loss between 5% & 9% at KP 78.47.


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The fourth pigging program carried out in December was specifically designed to clean the pipeline, remove any water contamination and monitor the levels of any bacteria growth over the entire length of the pipeline. Samples taken during the cleaning pig runs were analysed by Santos Port Bonython laboratory staff and the results indicated unacceptable levels on the receivers’ traps. Inhibitor/biocide levels (from 4 litres per day to 8 litres a day).A monitoring program with a third quarter 2010 pigging program is scheduled.

5 INCIDENT REPORTING There were no serious or reportable incidents on the Moomba to Port Bonython liquids pipeline during 2009.

6 LAND MANAGEMENT

6.1 Land Owner Liaisons There are 44 landholders along the Moomba to Port Bonython Liquids Line system. All available landowners on the pipeline were contacted during the year and a questionnaire was completed as part of each visit. The questions were centred on people’s contact details, current and proposed land use, awareness of the pipeline location and their responsibilities with respect to works in the pipeline vicinity. As part of Epic Energy’s continuous improvement program for pipeline awareness the landowners were posted two letters and safety brochures during the year containing information covering pipeline and easement safety and the responsibilities landowners have to ensure no safety breaches occur on their properties. An Epic Energy year 2010 calendar reminding the landowner of pipeline safety was also forwarded in December 2009. The Department of Defence is proposing to purchase land with the Moomba to Port Bonython Liquids Pipeline easement for the purpose of extending the Cultana Army Range north of Whyalla. The custodian of the pipeline easement is the Natural Gas Authority of South Australia, Santos own the pipeline and Epic Energy are contracted to operate and maintain the pipeline. Epic Energy are providing information to support Santos with negotiations with the Department of the Premier and Cabinet to ensure future army training activities are restricted or controlled within the vicinity of the pipeline to ensure a safe environment for the pipeline and general public. Epic Energy are providing Santos with support to liaise with engineering consultants engaged to carry out investigations to assess engineering works necessary to develop a proposed Port Bonython Fuels Terminal and refinery site, to be located near the existing Santos Facilities at Port Bonython.

6.2 Pipeline Safety Awareness Epic Energy implements a Community Awareness Program, which entails holding awareness meetings with communities along the pipeline route. To cover the various pipeline infrastructure that Epic Energy operates and maintains in South Australia Epic Energy have set a target of 35 meetings annually with CFS, MFS, Police, Ambulance, SES, councils, earth moving contractors, irrigation and fencing installation contractors Several of these meeting were held in the mid north with services in close proximity or associated directly with the Moomba – Port Bonython Liquids Line. The presentations focus on the general properties of the liquid hydrocarbons transported, the


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process of liquids hydrocarbon transmission by pipeline, location of the high pressure liquids pipeline in the regions concerned, correct procedures when working within pipeline easements, pipeline threats and dealing with emergency situations. (Note:-This presentation will be tailored to the specific audience and where appropriate Epic Energy will discuss the differences between Liquids Hydrocarbon and natural gas transportation as both pipeline systems exist in a number of areas within South Australia.) A total of seven Pipeline Safety Awareness Presentations were carried out to Utilities, Emergency Services and Councils in areas associated with the Moomba – Port Bonython Liquids Line in 2009.

6.3 Pipeline Location and Referral Services Epic Energy provides a free service to locate any pipeline that they own or operate on behalf of third parties. This service is primarily used by other companies and third parties carrying out civil works in the vicinity of the pipelines. During 2009 Epic Energy received and attended eleven enquiries via the free call 1100 “Dial Before You Dig” asset referral service in relation to third party activity in the vicinity of the Moomba to Port Bonython Liquids Line. 7 ENVIRONMENTAL MANAGEMENT During 2009 the majority of environmental requirements as detailed in the Statement of Environmental Objectives were complied with. The SEO for PL2 was reviewed and modified to incorporating the new incident definitions and the new Act and Regulations. The revised SEO was approved by PIRSA and came into force in December 2009 when notice of the approval was published in the South Australian Gazette .This version is being used as the final document for operating, maintaining and reporting purposes during 2009. No environmental audit was conducted on the Moomba to Port Bonython liquids line during 2009. A field inspection is scheduled to be carried out early 2010 to ensure compliance of the environmental assessment criteria in the Statement of Environmental Objectives and the greenhouse gas emission sources in line with the National Greenhouse gas Emission Reporting Scheme [NGERS]. A low depth of cover report for the Moomba to Port Bonython Liquid Line prepared in 2008 identified several actions that were prioritised and scheduled for repairs. During 2009 the outstanding first priority actions were targeted and completed with additional work starting on the lower priority work. During 2009 all road, railway crossing and several river crossings were re-instated with suitable depth of cover in accordance with AS 2885. Permanent erosion repairs in the form of gabion walls and mattresses were installed at two critical watercourse crossings. During 2009 heavy rains and flooding again caused low depth of cover issues with the pipeline. Repairs were carried out immediately to restore the depth of cover however these repair can only be classified as a temporary repair as the expectation and history shows the soils will again erode with heavy flooding. The program of permanent design river repairs will continue into 2010 with the aim to eventually eliminate further reoccurrences. Appendix A contains the “Assessment of Declared Objectives” completed for the Liquids Line. 8 EMERGENCY RESPONSE Pipeline Licence 2 states that an Emergency Exercise is to be conducted on the Moomba – Port


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Bonython Liquids Pipeline once every two years and in addition to this exercise a set of Emergency Response procedures is to be developed and maintained. These procedures are detailed in Epic Energy’s “Emergency Response Manual”. The next emergency response exercise directly associated with the Moomba to Port Bonython Liquids Line is scheduled for April 2010. Although there was no ERE carried out directly with the Moomba to Port Bonython liquids line,, Epic Energy continued to test its Emergency Response Plan and personnel throughout the year with two additional emergency response scenarios on other pipeline systems. Exercises “Operation QSN’ was carried out in April 2009 and “Operation MLV” July 2009. During these exercises the following objectives were achieved.

• To test the Emergency Management Plan – Doc No# E-00-000-ERM-G-001 rev 2

• To test the role and notification process of the Incident Commander [new employee].

• To test the role and responsibility of the Emergency Support Team Leader and the functions of the supporting roles.[new employees]

• To ensure field maintenance staff receive an understanding in the location and use of specialized emergency repair equipment required to be mobilized in an emergency

• Confirm availability of suitability qualified supporting contractors and equipment. 9 REGULATORY COMPLIANCE Every endeavour is made to ensure that design, manufacture, construction, operation, maintenance and testing of all appropriate facilities, is carried out in accordance with the relevant Acts of Parliament, licence conditions and AS2885. Epic Energy maintains a compliance database, Safety Wise, which tracks legislative compliance throughout the organisation. Obligations are assigned to responsible staff, who must supply evidence that the obligation has been satisfied within a specified time period. Epic Energy is not aware of any regulatory non compliance for this pipeline, and believes it is fulfilling its obligations in relation to the following requirements: • The Petroleum & Geothermal Act & Regulations 2000 • The Pipeline Licence (PL2) • The Statement of Environmental Objectives Epic Energy maintains an action tracking system for improvements to its systems, which is fully traceable through to close out of individual items. Significant items are reported through to Santos and PIRSA, and would be raised at the quarterly compliance meetings held between PIRSA and Epic Energy. There have not been any significant items during this reporting period. Epic Energy has made an assessment of changes made to the Petroleum & Geothermal Act 2000 via the Petroleum (Miscellaneous) Amendment Bill, enacted through the South Australian Parliament in 2009, and has taken steps to advise key staff of changes that affect operations. Relevant changes have been incorporated into our systems and tracked through the compliance database.


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10 RISK MANAGEMENT

Epic Energy incorporates risk management into operational processes and strategies in accordance with AS/NZS 4360.

Epic Energy utilizes the following risk management strategies to minimize pipeline risks to ALARP. • Aerial and ground surveillance of the pipeline system • Induction processes, Safe Work Systems, including Permit to Work • Programmed routine maintenance activities to ensure all of the pipeline facilities are

maintained in accordance with best industry practices and the relevant codes and standards that apply

• Design change control • In accordance with AS2885 Epic Energy conducts 5 yearly metre by metre risk assessment

reviews • Pipeline & Safety awareness program • Land ownership and use notification system • Landholder and stakeholder contact program • Participation in state forums for external risk management • Free “1100” Dial before You Dig information system In addition during 2009 Epic undertook a full review and updated details of all landowners and stakeholders along the pipeline route, ensuring the efficiency of the landowner contact program. Site hazard registers for Epic Energy facilities have been reviewed and updated. A new Permit to Work awareness program was rolled out to Epic staff across South Australia.

11 MANAGEMENT SYSTEM AUDITS

11.1 Environmental Audits A review of Epic’s Environment Management System (EMS) was completed to identify the current program status and areas for improvement. This assessed the status of Epics’ EMS against the relevant Australian Standard ISO 14001:2004. As a result, Environmental Work Instructions have been reviewed in preparation for environmental risk workshops to be conducted in 2010. Appendix A contains the “Assessment of Declared Objectives” completed for the Liquids Line. 11.2 Health and Safety Audits A full external audit of Epic Energy’s safety Management System (SMS) was undertaken by Harber & Associates, with the applicability of 7 Epic SMS standards audited within South Australia. These included the following topics;

• SMS 4 Risk Assessment & Management • SMS 5 Employee Involvement • SMS 6 Employee Selection, Competency and Training • SMS 8 Design, Construction and Commissioning • SMS 13 Emergency Response • SMS 14 Health System • SMS 15 Incident Reporting and Investigation

There were no non-conformances noted during the external SMS audit process, however


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suggestions for improvement were made through the audit recommendations. 11.3 Management Audit Epic Energy completed a number of audits during 2009, these were a combination of Epic’s internal audit program, external audits by industry experts initiated by Epic Energy, and compliance audits conducted by regulators. The following topic areas were subject to audit during 2009;

• Operating System Change Control • Safety Management System review (external audit) • HAZOP • Maintenance System Optimisation • Ladders & Platforms • Compliance with Safety Reliability Maintenance & Technical Management Plan for electrical

infrastructure (by Technical Regulator) • Personnel Tracking Movements • Permit to Work & Job Hazard Analysis • Operations Group Systems Audit • Dial Before You Dig • Aviation Charter • Disaster Recovery Test (IT broad systems test) • Billing and Contractual Obligations • Daily and End of Month Reconciliation Process (pipeline throughput) • Accuracy Verification Testing Process (metering) • Disaster recovery Plan • Emergency Manuals

Whilst the auditing program did not make any findings of non-conformances, areas for continual improvement and refinement of processes were identified through audit recommendations. 12 REPORTS ISSUED DURING THE 2009 LICENCE YEAR The following reports were generated for the Liquids Line pipeline in 2009: • PL 2 Annual Report for 2008 (forwarded early 2008) • Monthly maintenance reports • 2009 Annual Maintenance Plan (for approval by Santos) • Statement of Environmental Objectives. • DCVG Defect – Investigation and repair Report • Pump Stn No#3 Mothballing Feed Study Report • Pipeline Pigging Reports]

13 VOLUME OF PRODUCT TRANSPORTED 1,307,374 tonnes of product was transported through the Liquids Pipeline in 2009, this equates to a gross volume of 1,848,277 m3 and a net volume of 1,817,204 m3


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14 PROPOSED OPERATIONAL ACTIVITIES FOR 2010 During 2010 the following activities are proposed for the Liquids Line pipeline: • Complete all scheduled routine maintenance activities and corrective maintenance identified • Submission of a 2009 Annual Report in early 2010 • Conduct a Pipeline Cleaning Pig program. • Excavate and repair coating defects identified in the 2008 DCVG survey. • Carry out long term restoration work on low depth of cover areas identified in 2008 Low depth

of Cover Report • ILI Pigging Program • Replace Martins Well Generator. • CP upgrades – TRU controllers ad AC Mitigation Ground-bed • Pump Station No#3 Positive Isolation Project 15 STATEMENT OF EXPENDITURE Confidential 16 KEY PERFORMANCE INDICATORS The following key performance indicators have previously been established to monitor performance of operations and maintenance activities on the Liquids Line. Outlined below are the KPI results for 2009.

2009 Target 2009 Actual 2009 Comment Cathodic Protection Percentage of the pipeline protected to AS2832.1 level

100% 94% Low protection levels between KP 369.4 to 402.6 and KP 538.6 to 547.3 require investigation

Internal Corrosion SRB count from 100 ml sludge sample using serial dilution method

3 or less positive

>3 Positive

The analysis of the samples taken during the December 2009 cleaning pig run have indicated higher levels of bacterial activity in four samples. Biocide dose rate doubled as a mitigation factor.

Third Party Incident Number of times pipeline is damaged

0 0 No damaged occurred to the pipeline during the reporting period

Number of near misses (digging within 1m of pipeline)

0 0 No activities of this nature that involved Epic Energy the owner or a third party were identified during the reporting period

Exposure of pipeline due to washout and wind erosion

0 0 Heavy rains and flooding during 2009 caused water erosion in several areas, however the pipeline was not exposed at any location.

SCADA and Leak Detection Reliability of SCADA and Leak Detection System

100% 95% Effected mostly by ageing equipment faults, with outages related directly to RTU communication problems at either


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Moomba or Port Bonython.

Environmental Number of uncontrolled hydrocarbon releases

0 0 There were no uncontrolled releases of hydrocarbons reported in 2009

Earth Tremor Surveillance Vehicular surveillance immediately after an earth tremor or flood

100% 100% Patrols had to schedule in 2009 on several occasions immediately after heavy rain and flooding in areas associated with the liquids pipeline.

17 CONCLUSION The maintenance and inspection programs carried out on the Moomba – Port Bonython Liquids in 2009 have ensure the pipeline is fit for service and capable of operating within the set parameters. The CP Survey results supplied in Appendix B indicate the protection levels are adequate to provide suitable protection for the pipeline. The pipeline is considered to be in good working condition and well maintained.


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Appendix A – Assessment of Declared Objectives


ASSESSMENT OF DECLARED OBJECTIVES OBJECTIVE GOAL OBJECTIVE ACHIEVED OBJECTIVE

ACHIEVED YES / NO

SUPPORTING COMMENTS

1.1 To minimise disturbance or damage to infrastructure / land use and remediate where disturbance cannot be avoided

Where disturbance is unavoidable or accidental, infrastructure or land use is restored to the satisfaction of the landholder or to undisturbed condition.

Duration of disturbance does not exceed agreed timeframe.

Yes Minimal activity and compliant with the objective.

1. To avoid unnecessary disturbance to 3rd party infrastructure, landholders or land use

1.2 To minimise disturbance to landholders

No reasonable landholder complaints.

Landholder activities not restricted or disturbed as a result of pipeline activities unless by prior arrangement.

Yes Minimal activity and compliant with the objective

2. To maintain soil stability / integrity

2.1 To remediate erosion as a result of pipeline operations in a timely manner

The extent of soil erosion on the easement was consistent with surrounding land.

N0 Heavy rains and flooding caused areas of erosion and reduced depth of cover over the pipeline. Immediate temporary repairs have been carried out with ongoing restoration work scheduled for 2010.

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OBJECTIVE GOAL OBJECTIVE ACHIEVED OBJECTIVE ACHIEVED YES / NO

SUPPORTING COMMENTS

2.2 To prevent soil inversion

Vegetation cover is consistent with surrounding land.

No evidence of subsoil on surface (colour).

Landholder signoff.

Yes During the reporting period Epic Energy carried several excavation activities for coating defect repairs and pipeline integrity inspections.

Epic Energy staff supervising pipeline excavations is required to advise the plant operators to stockpile topsoil separate from the deeper spoil and return it to the top of the backfilled excavation. (see WM02-134)

No soil inversion has taken place and therefore the objective has been met.

2.3 To minimise disturbance to erosive soils to prevent on-going risk of soil erosion

Extent of soil erosion on the easement consistent with surrounding land.

N0 Heavy rains and flooding caused areas of erosion and reduced depth of cover over the pipeline. Immediate temporary repairs have been carried out with ongoing restoration work scheduled for 2010.

3.1 To maintain regrowth of native vegetation on the easement to be consistent with surrounding area

Species abundance and distribution on the easement was consistent with the surrounding area. Note: assessment of the consistency with surrounding areas will take into account that regrowth is a time and rainfall dependent process.

Yes The condition of the native vegetation within the pipeline easement is consistent with the surrounding vegetation.

3. To maintain native vegetation cover on the easement

3.2 To minimise additional clearing of native vegetation as part of operational activities

Vegetation clearing within the easement or on land adjacent to the easement is limited to previously disturbed areas or areas assessed to be of low sensitivity, unless prior regulatory approval obtained.

Yes During the reporting period t excavation activities were carried out, however care was taken to ensure damage to the local vegetation was minimal.

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SUPPORTING COMMENTS

3.3 To ensure maintenance activities are planned and conducted in a manner that minimises impacts on native fauna

Impacts to native fauna as a result of excavation work will be restricted to as low as reasonably practicable

Yes No maintenance activities during 2009 had identified any impact on the native fauna.

4. To prevent the spread of weeds and pathogens

4.1 To ensure that weeds and pathogens are controlled at a level that is at least consistent with adjacent land

The presence of weeds and pathogens on the easement was consistent with or better than adjacent land.

No new outbreak or spread of weeds reported.

Yes The presence of weeds and pathogens on the easement was consistent with adjacent land.

5. To minimise the impact of the pipeline operations on surface water resources

5.1 To maintain current surface drainage patterns

For excavations, surface drainage profiles restored.

For existing easement, drainage is maintained to pre-existing conditions or better.

Yes During the reporting period no alterations have been made to the landscape through which the pipeline traverses and therefore current drainage patterns have been maintained.

6. To avoid land or water contamination

6.1 To prevent spills occurring, and if they occur minimise their impact (refer also Objective 7)

No evidence of any spills or leaks to areas not designated to contain spills.

In the event of a spill, the spill was:

• Reported • Contained • Cleaned-up, and • Cause investigated and

corrective and/or preventative action implemented.

Compliance with relevant sections of the Environment Protection Act 1993.

Yes There were no incidents or reported spills on the Moomba to Port Bonython Liquids Line during 2009

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SUPPORTING COMMENTS

6.2 To remediate and monitor areas of known contamination arising from pipeline operations

Contamination confined to known area.

Level of contamination continually decreasing, ultimately to meet EPA guidelines.

Yes There are no areas of contamination occurring as a result of the pipeline operations.

6.3 To prevent the spread of contamination where the easement intersects known contaminated sites

No evidence of movement of contaminated material along easement (i.e. vegetation death, soil discolouration, subsidence).

Yes The Pipeline does not traverse any contaminated sites and therefore this is not an issue. The only decommissioned burn pit remains at Pump Station 3 and is continually monitored.

6.4 To ensure that rubbish and waste material is disposed of in an appropriate manner.

No evidence of rubbish or litter on easement or at facilities.

No evidence that waste material is not contained and disposed of in accordance with Epic approved procedures.

Yes All rubbish and waste material is removed from all of the pipelines facilities and the easement. This material is transported back to an approved refuse collection and disposal facility.

6.5 To prevent impacts as a result of hydro test water and waste water (water bath heaters and wash down water) disposal

No evidence of impacts to soil, water and vegetation as a result of water disposal (ie. soil erosion, dead vegetation, water discoloration).

Yes During the reporting period there were no operational requirements to dispose of any waste water.

6.6 To ensure the safe and appropriate disposal of grey water (sullage, sewage)

No evidence of non-compliance with local or state government regulations.

Yes During this reporting period there were no non compliant issues reported

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SUPPORTING COMMENTS

7.1 To minimise oil losses during pigging and other routine pipeline operations

No evidence of spills from pigging or other routine pipeline operations.

Yes Several pigging operation were completed in 2009 with the liquid waste being captured in purpose built underground tanks.

The use of approved work instructions, job hazard analysis, permits to work and experienced staff all contributes to Epic Energy meeting this objective.

7.2 To monitor the condition of the pipeline to ensure that potential pipeline leaks are identified and appropriate action implemented

Intelligent pigging occurs on an as condition basis.

Corrective and/or preventative action implemented in a timely manner.

Yes Pigging operations and bacteria analysis was carried out in 2009.

An intelligent pigging program has been scheduled for 2010.

7. To minimise the risk of oil spills from the pipeline or pipeline infrastructure

7.3 To prevent unauthorised activity on the easement that may adversely impact on the pipeline integrity

No unauthorised activity on the easement that has the potential to impact on the pipeline integrity.

Yes There was no reportable unauthorized third party activity on the Moomba – Port Bonython pipeline easement during 2009.

8.1 To adequately protect public safety during normal operations

No injuries or incidents involving the public.

Demonstrated compliance with AS 2885.

Emergency procedures implemented and personnel trained.

Yes .

Safe work procedures and work instructions are available to identify these hazards.

8. To minimise the risk to public health and safety

8.2 To adequately protect public safety during maintenance

No injuries or incidents involving the public.


Yes Safe work procedures and work instructions are available to identify these hazards.

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SUPPORTING COMMENTS

8.3 To avoid fires associated with pipeline maintenance activities

No pipeline related fires.


Yes Epic Energy has detailed safe maintenance work procedures to eliminate fire etc during routine maintenance activities.

Emergency exercises are required every two years, the next exercise scheduled for the Moomba – Port Bonython Pipeline is in 2010

9.1 To minimise the impact as a result of an emergency situation or incident

Emergency response procedures are effectively implemented in the event of an emergency.

Emergency response exercises are aligned with credible threats and consequences identified in the risk assessment.

Yes Emergency exercises are required every two years, the next exercise scheduled for the Moomba – Port Bonython Pipeline is in 2010

9. Minimise impact of emergency situations

9.2 To restore any damage that may occur as a result of an emergency situation

Refer to previous criteria (Objective 1, 2, 3 & 6).

Yes No major incidents or emergency situations reported during 2009

10. To minimise noise due to operations

10.1 To ensure operations comply with noise standards

Operational activities comply with noise regulations, under the Environment Protection Act 1993.

No complaints received.

.

Yes No operational activities on the LL caused any additional or excessive noise levels.

11. To minimise atmospheric emissions

11.1 To eliminate uncontrolled atmospheric emissions

No uncontrolled atmospheric emission.

Yes No uncontrolled emissions reported during 2009

11.2 To minimise the generation of dust.

No complaints received.

No dust related injuries recorded.

Yes Dust controlled measures are incorporated into the excavation programs

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SUPPORTING COMMENTS

12. To adequately protect cultural heritage sites and values during operations and maintenance

12.1 To ensure that identified cultural sites are not disturbed

No impact to known sites.

Any new sites identified are recorded in Land Management System and reported to appropriate authority.

Yes Epic Energy procedures require cultural clearance prior to any work involving movement of soil with the pipeline easement.


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Appendix B – Pipeline Cathodic Protection Data


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Liquids Line Corrosion Protection On/Off Potentials 2009 Surveys On/Off potentials taken during the February and August full line surveys are presented in the graph below. The section of the pipeline surveyed in February between KP 221.9 and 352.6 was resurveyed in May due to the transformer rectifier at Pump Station 3 being out of

Moomba to Port Bonython Liquids PipelineON/OFF Potential vs. KP (Full Line Surveys)

Date Between 1/1/09 To 31/12/09

0

200

400

600

800

1000

1200

1400

1600

1800

2000

0 100 200 300 400 500 600Kilometres

mV

ON Aug-09 OFF Aug-09 ON Feb-09OFF Feb-09 ON May-09 OFF May-09

2009 Annual Report MOOMBA TO PORT BONYTHON...

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