When was South East Australia Gas (SEA Gas) first established?How has the company evolved over time?
The company itself was established in 2001 when energy companies International Power and Origin Energy first set out with what they called a “˜customer-led solution’ to the South Australia (SA) Government’s call for a second source of gas supply to the state. TXU joined the partnership in 2002 just as construction began. The SEA Gas project became operational on 1 January 2004.
The company is now jointly owned by APA Group and the Retail Employees Superannuation Trust.
How many kilometres of transmission pipeline does SEA Gas own and operate?
The SEA Gas pipeline system consists of three pipelines: the 687 km Port Campbell to Adelaide Pipeline (PCA), which stretches from Port Campbell in southwest Victoria to Pelican Point in Adelaide, and two much shorter pipelines; the Port Campbell to Iona Pipeline, and the so-called “˜WUGS Lateral’, both of which are approximately 10 km. Due to its size, the PCA is often referred to as the SEA Gas Pipeline. We also operate and maintain the Mortlake Pipeline in Victoria for Origin Energy.
How has SEA Gas’ operations changed over the last five years?
We celebrated five years of operation in January 2009. We are a small team but we believe we have a good culture, and have been fortunate in that we have enjoyed a high staff retention rate. As “˜the energy link’ we carry out the nationally important role of connecting Adelaide and Melbourne in the rapidly developing eastern gas market. Currently, we deliver a little over half of Adelaide’s gas requirements. Our current purpose is to look for business opportunities that add value to our pipeline system. Accordingly, operations have certainly been honed but have not changed greatly as the asset was a state-of-the-art system when built.
What innovations has the company adopted to improve its operating procedures?
As a flow-controlled system with a stateof- the-art control system, much of our innovation has been in improving specific services for our shippers, such as hourly profiling and allocation.The imposition of the Short-Term Trading Market placed an added burden that is
disproportionate to the representative throughput, but again the system has now been programmed and should provide for our responsibilities under the market processes.
What have been some of the issues involved with encroachment and the SEA Gas Pipeline?>How have these been resolved?
As a relatively new pipeline, SEA Gas was designed for known and anticipated land use at the time of construction. It was somewhat disconcerting to find that when it was introduced in 2010, the SA 30-Year Plan had little reference to the existence of gas transmission pipelines and that the proposed land use in some areas in the vicinity of the pipeline route was not compatible with the design of the pipeline. Fortunately, we have worked closely with the South Australian Department of Planning and local government and developers, and to date, sensible outcomes have been achieved. We are very supportive of the Australian Pipeline Industry Association’s efforts in endeavouring to achieve a lateral distance either side of pipelines within which pipeline operators should be notified of proposed development activity in time to ensure pipeline and public safety objectives are met.
How did the availability of the SEAGas Pipeline assist in ameliorating the consequences of the incident at Santos’ gas processing facility on New Year’s Day in 2004?
I don’t think I will ever forget that early morning phone call. It was pure happenstance’ of course that we should be undertaking final commissioning to become operational on that day when, after 33 years of one source of supply and one pipeline,
there was an explosion and disruption of supply from the Moomba processing facility. Adelaide would have had little or no gas for weeks except for the fact that SEA Gas was able to deliver gas on that very day. We supplied approximately 80 per cent of thestate’s needs for about three weeks. I do not know how the state could have coped without us, particularly given that at the time, some 60 per cent of power generation was from gas.
Are there any further expansions planned for the pipeline systems?
The way ahead will be very interesting as energy industry participants react to the carbon question along with the gas pricing outcomes from LNG developments. We anticipate there will be services required that no one has really thought of as yet, along with challenges of using pipelines for the removal of waste gases from coalfired plants. We also anticipate further development of open-cycle gas-fired plants, and more innovative peaking transportation services will need to be developed. Adelaide is served by two pipelines and both have
relatively low average utilisation rates, so failing a step change in energy demand in the state, organic expansion is unlikely in the near term.
Does SEA Gas have any other pipeline laterals planned over the next five years?
As you would expect, we receive numerous enquiries about services and we are always anxious to provide ideas and to discuss options. At this time, it would be premature of me to elaborate but I would be very surprised if we were not involved with further system extensions in the next few years.
What challenges or trends does the company see on the cards for the pipeline industry in the future?
Those who know me may be surprised that I do not rank “˜regulatory risk’ first. However, I think the horse has bolted there; governments and the economic regulators have removed the incentive for pipeliners to take capacity risk and so in my view we will continue to see just-in-time, fullycontracted pipeline infrastructure rather than innovative measures that would have maximised gas supply competition.
Apart from the issues with urbanisation discussed previously, I expect the challenges are going to relate to Australia’s carbon future and there are numerous facets of this, including increased load factors as more peaking services are called for, the provision of pipeline services through brownfield areas to replace inefficient coal-fired power stations, and ensuring consistency and suitability of pipeline materials both for natural gas as well as evolving waste gas transmission pipelines.