2004 Annual Report on Manufacturing Operations at … PTY LTD 2004 Annual Report on Manufacturing...

QENOS PTY LTD 2004 Annual Report on Manufacturing Operations at Qenos Olefins, Plastics, Resins and Elastomers Sites to Altona Complex Neighbourhood Consultative Group, April 2005

2004 Annual Report to to ACNCG

DECLARATION

I hereby state that I have authorized the preparation and issue of this environmental performance report and that it is complete, correct and accurate to the best of my knowledge and belief. I am unaware of any past or current circumstances which would render the report misleading or inaccurate. Signed: Date:

Russel Higgins General Manager Operations Qenos Pty. Ltd.

Page 1

QENOS PTY LTD

2004 Annual Report on Manufacturing Operations at Qenos Olefins, Plastics, Resins and Elastomers Sites to Altona Complex Neighbourhood Consultative Group, April 2005

QENOS PTY LTD

DECLARATION

I hereby state that I have authorized the preparation and issue of this environmental performance report and that it is complete, correct and accurate to the best of my knowledge and belief. I am unaware of any past or current circumstances which would render the report misleading or inaccurate.

Signed: Date:

Russel Higgins

General Manager Operations

Qenos Pty. Ltd.

CONTENTS

CONTENTS2

SUMMARY3

INTRODUCTION 4

SAFETY HEALTH and ENVIRONMENT (SH&E) POLICY & CHARTER5

2004 AUDIT PROGRAM7

SH&E MANAGEMENT SYSTEM 7

COMMUNITY COMPLAINTS8

ENVIRONMENTAL INCIDENTS9

EPA WASTE DISCHARGE LICENCES10

CITY WEST WATER TRADE WASTE AGREEMENT12

PRESSURE SAFETY VALVE PERFORMANCE 13

NOISE ABATEMENT14

WASTE REDUCTION PERFORMANCE MEASURES 16

SOLID & EPA PRESCRIBED WASTES17

ENERGY EFFICIENCY & GREENHOUSE GASES19

GROUNDWATER MANAGEMENT PLAN20

ENVIRONMENT IMPROVEMENT PLAN (EIP)21

COMMUNITY RIGHT TO KNOW AND COMMUNIY INTERFACES 21

PERSONAL SAFETY PERFORMANCE22

HEALTH INITIATIVES23

MAJOR HAZARDS FACILITIES (MHF ) REGULATIONS24

DANGEROUS GOODS STORAGE26

SH & E INCIDENTS 27

SUMMARY

In 2004, production at Qenos was again steady while achieving best ever Safety Health & environment performance

Highlights of performance this year are:

SCAL-2 turnaround completed on schedule, on budget with no complaints or reportable environmental events

Lowest ever number (nine) of community complaints.

Lowest ever number (two) of recordable environmental incidents.

Equal lowest number (four) of License non compliances.

Best ever Injury performance with a Total Recordable Injury Ratio (TRIR) of 0.58 for Altona.

The last sulfatreat bed has been removed from site without incident.

Risk reduction targets for Altona exceeded with 108 % of target completed.

SCAL-1 plant conversion to LPG/Ethane feed has been progressed on Schedule.

Plastics site has completed 4 years without a reportable incident.

Lowest ever butadiene emissions.

Lowest ever Benzene emissions.

Areas for improvement are:

Continue to reduce the number of contractor injuries to the same level as employees.

Complete the conversion of SCAL-1 to LPG/Ethane feedstock which will reduce emissions, greenhouse gas production & energy consumption.

INTRODUCTION

In July 1999, Orica Limited and Kemcor Australia Ltd combined their polyethylene, polypropylene, synthetic rubber and engineering plastics operations into a new joint venture, Qenos Pty Ltd.

Qenos Pty Ltd is owned equally by ExxonMobil and Orica and operates plants in Sydney and Altona.

This annual report addresses the year 2004 operations of the four manufacturing sites at Altona, Qenos Olefins, Qenos Plastics, Qenos Resins and Qenos Elastomers.

Figure 1

Total Production (kT)

673

700

691

532

353

549

577

587

0

100

200

300

400

500

600

700

800

19971998199920002001200220032004

Total production across all the sites in kilotonnes is shown in Figure 1. This is based on production of hydrocarbon intermediates that are transferred to other plants as well as production of final products for sale.

Production was normal in 2004 with few interruptions to operations. The SCAL-2 and Plastics turnarounds were completed on schedule in February/March

Qenos Olefins

Qenos Olefins uses ethane gas from Bass Strait and gas oil liquid from the Mobil Altona refinery to produce ethylene and propylene (used to manufacture plastics) and butadiene (used to manufacture synthetic rubber). Three byproducts (gasoline, quench oil and gas oil tar) are also produced.

The SCAL-1 plant will not be able to operate economically with gas oil liquid feed post November 2005 when the clean fuels regulations come into force. A $55 million project to convert the SCAL 1 plant from gas oil feedstock to LPG/Ethane feedstock is underway and is progressing on schedule for a December 2005 start up.

Qenos Plastics

Qenos Plastics uses ethylene from the Olefins site to manufacture polyethylene. The low-pressure polymerisation plant produces high-density polyethylene (HDPE) used for products such as milk bottles, irrigation and gas piping and household containers.

Qenos Resins

Qenos Resins also produces HDPE from ethylene manufactured by Olefins but by a different process from Qenos Plastics. The HDPE from Resins is used in a similar range of products to that from Plastics, but especially for Mobile Garbage Bins.

Polypropylene is also produced at Resins from propylene manufactured by Olefins. Polypropylene, a harder plastic material than HDPE, is used in the manufacture of films, tapes and injection moulded products eg. food containers. Chemical grade propylene will no longer be made post the SCAL-1 conversion. The refinery grade propylene produced by the SCAL-1 will be exported to BASELL who have acquired the QENOS polypropylene business. The RESINS polypropylene plant will be converted to polyethylene production.

Qenos Elastomers

Qenos Elastomers manufactures polybutadiene rubber (BR) by the polymerisation of butadiene in a solution process. The major feedstock, butadiene is supplied by the Olefins site. Qenos Elastomers is the only producer of synthetic rubber in Australia and the products are supplied to a wide range of industries with the tyre industry as the major customer. Following the conversion of SCAL-1 to LPG/Ethane feedstock butadiene feedstock will no longer be available for the BR plant and it is schedule to close down in October 2005.

SH&E POLICY & CHARTER

Qenos SH&E POLICY

Qenos has a combined Safety, Health and Environment Policy to match the integrated approach in its Safety, Health and Environment Operating System (SHEOS). This Policy incorporates the best aspects of policies from shareholders, and includes reference to Responsible Care. The Policy is as follows:

At Qenos, we believe that all injuries, occupational illnesses and environmental incidents are preventable.

We are committed to, and everyone who works at Qenos must show responsibility for, operations, products and practices that protect the safety and health of our employees, contractors, customers and the community, as well as protecting the environment.

This is more than another element in our business competing for priority; it is an absolute requirement.

We will:

strive for a workplace that is free from injury, illness and incident

encourage employee initiatives that contribute to a safe and improved environment at work, home and in the community

minimise risks associated with the manufacturing, transportation, use and disposal of our products

anticipate, analyse and discuss risks with those affected, and monitor events to ensure proper control

conduct all operations and market all products with adequate safeguards

be prepared for emergencies, responding quickly and effectively to incidents resulting from our operations

efficiently use materials and energy, and dispose of wastes in a safe and environmentally sound way

continuously improve our safety, health and environmental performance through effective management systems, measurements and targets

expand our knowledge of safety, health and the effect of our operations on the environment, and share this knowledge with others

strive to be a trusted and responsible member of the community through performance, full and open communication, and involvement

work with others to develop responsible laws, regulations and standards, based on sound science and assessment of risks, as required to further safeguard the workplace, community and environment.

These commitments are in addition to our basic intent to comply with all safety, health and environmental laws, regulations and Responsible Care requirements.

Risk: identify it, assess it, control it.

In addition, all employees are asked to sign a Safety, Health and Environment Charter. The Charter sets out accountabilities for all employees and line managers.

SH&E CHARTER

Everybody

Learn and follow all SH&E requirements related to the job

Maintain SH&E awareness in all tasks, preventing injuries, illnesses or safety or environmental incidents

Maintain a clean and orderly work area at all times

Constantly review the workplace for hazards which could lead to injury, illness or incident and initiate appropriate corrective actions

Report to work fit for duty without impairment from alcohol, drugs, medications or other influences

Address improper SH&E practices observed in co-workers including contractors

Look for opportunities to improve SH&E performance and actively participate in SH&E improvement activities

Immediately report all injuries, illnesses and safety and environmental incidents

If ill or injured, actively participate in rehabilitation programs to promote recovery.

Line Managers

Clearly communicate the vision and Expectations and keep SH&E as the top priority in all decisions, actions and communications

Provide leadership for the development and implementation of SH&E plans

Ensure that rules and procedures for preventing all SH&E incidents in your work area are in place and are enforced

Lead by example by setting high SH&E standards, following rules, procedures, and using good work practices

Know the SH&E requirements of the job performed by the people you lead and ensure they are appropriately trained

Audit work practices frequently and do not tolerate any deviations from required standards, addressing any known SH&E non-conformance or opportunity for improvement with appropriate priority

Ensure that all contractors are managed or supervised to the same standards as Qenos employees

Create an environment of openness, trust and mutual respect which allows everybody to excel and be recognised for good SH&E performance

Participate in investigation of SH&E incidents and ensure that recommendations to prevent recurrence are followed through to completion

Promptly arrange rehabilitation for an ill or injured employee, providing full support for them and their family.

2004 AUDIT PROGRAM

The 2004 audit program included internal reviews of the Qenos Safety, Health and Environment Operating System (SHEOS) and a QENOS Regulatory Compliance audit of the Resins site.

There was no EPA accredited license audit in 2004 after the 2003 audit recommended a longer interval between audits. The EPA, Accredited License auditor and community representatives will meet with QENOS in April 2005 to discuss future accredited license audit requirements.

The oversight program for Major Hazards Facilities was conducted by Work safe

SH&E MANAGEMENT SYSTEM

An internal assessment audit of the SH&E Operating System(SHEOS), which incorporates the Safety Management System, Environment Management System and Responsible Care requirements confirmed continuing improvement in our SHEOS, during 2004. The long term continuing improvement of the SHEOS is shown in Figure 2.

The average rating for the 21 practices within SHEOS for 2004 was 3.88 (out of a possible 4.0.), which was an incremental improvement on our average rating of 3.7 for the 2003 assessment.

Figure 2

Altona OIM's Improvement History

1.5

2

2.5

3

3.5

4

1995199619971998199920002001200220032004

Year

Average Rating

Qenos

ECOIC

COMMUNITY COMPLAINTS

The number of complaints attributed to Qenos operations of nine in 2004 is the lowest on record. This was achieved by managing stable planned plant operation and maintaining a strong focus on managing flare use and minimising the time that effluent was stored in the storm pond at the Olefins site Effluent Treatment Plant (ETP)

Four of the complaints during 2004 were associated with flaring from the Olefins site. One event in November received two complaints about flare smoking following a boiler trip in November. Use of the flare during planned events was limited to a level that avoided smoking and minimised the potential for noise.

Three of the complaints were for Odour from the Olefins site ETP with two of these complaints associated with off spec water being stored in the storm pond during January. Major maintenance was performed on the ETP during 2004 to improve performance of the unit. At the annual odour audit there was a noticeable improvement in the level of odour associated with ETP operation.

During 2004 the last Spent Caustic Carbonation catalyst bed removal was completed without any off site impact. Historically this activity has generated a significant number of complaints for an off site sour odour. A team of Qenos and Collex people worked together to plan and complete this last bed removal without any external impact.

One odour complaint was attributed to the Olefins ETP during normal operation in January.

Figure 3

Community Complaints

66

32

59

39

27

66

39

19

16

41

9

0

10

20

30

40

50

60

70

9495969798990001020304

ENVIRONMENTAL INCIDENTS

Two incidents were reported in 2004 in accordance with the agreed Leak and Spill reporting procedure. This is the lowest ever annual number for Qenos and is down from ten incidents in 2003. All have been discussed at past ACNCG meetings.

ELASTOMERS SITE

There were no reportable incidents on the Elastomers site in 2004.

OLEFINS SITE

There was a significant improvement with just one reportable incident on the Olefins site during 2004 down from seven in 2003.

9/02/2004

Olefins

Tar pump, P-109A, packing failed, releasing hot tar and quench oil to deck. Approximately 300-400 litres.

A modern mechanical seal will be able to be fitted to this pump. When mechanical seals were last evaluated for this pump suppliers were not able to provide a seal to meet the process design conditions. Full details of these incidents were issued to EPA and the ACNCG at the time of the incident.

PLASTICS SITE

There were no reportable incidents at the Plastics site in 2004.

RESINS SITE

There was 1 reportable incident at the Resins site in 2004.

3/03/2004

Resins

Solvent overflow from seal pot into bunded area when a transfer was not stopped. Approx 5000 litres.

EPA WASTE DISCHARGE LICENCES

Table 1 shows a comparison of the estimated emissions from the Olefins, Elastomers, Plastics and Resins sites with the discharge limits specified in the EPA licence. There are no exceedances. A 20 % reduction in Butadiene and benzene emissions has been achieved.

Table 1:Qenos Performance compared with EPA Licence:

Compound

EPA bubble licence, tpa or gm/min

2001

emissions,

tpa or g/min

(excludes Resins)

2001 emissions,

tpa or g/min

(excludes Resins)

2003 emissions,

tpa or g/min

(includes Resins)*

2004 emissions,

tpa or g/min

(includes Resins)*

Ammonia

12

6.4

6.4

6.4

6.4

Benzene

15

7.7

6.6

5.9

4.4

Butadiene

45

11.8

31.4

20.4

16.2

Cyclohexane

15

6.5

6.5

6.3

6.4

Carbon monoxide

811 gm/min

660 g/min (peak rate)



417 gm/min Av


Hydrogen Chloride

4.4 gm/min

N/A

N/A

< 0.1 g/min

( Nil)

0.12g/min

Nitrogen Oxides

578

456

462

477(458)

372 (354)

Particulates

175 gm/min



116 g/min

(peak rate)

(76)

116 g/min

(peak rate)

Styrene

5

1.0

0.5

0.4

0.4

Sulphur dioxide

440

119

124

142

175

Total Organic Compounds

1500

317

380

709(328)

719

* For comparison with previous years, figures in brackets refer to emission levels from Elastomers, Olefins and Plastics only.

The most recent boiler stack test results have seen an increase in sulphur dioxide from spent caustic tail gas burning and a reduction in Nitrogen Oxides compared to previous years. The increased Sulphur dioxide level is still well within the license limits and is offset with the elimination of potential odours from Spent Caustic Catalyst changes.

Table 2 shows a comparison of the results of water discharge at the Qenos Plastics site with the discharge limits specified in the EPA licence. Testing showed compliance with licence limits.

Table 2 Plastics Effluent Monitoring Summary, 2004

PLASTICS WASTE WATER DISCHARGE TO LAND ( IRRIGATION / DAM ) 2004

Total

Month :

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Volume ( m3 )

14157

6730

13750

11932

6340

2892

12489

4713

8445

11118

8671

9393

110630

Licence Requirement : Weekly discharge volume : 10,000 m3

Yearly discharge volume : 220,000 m3

PLASTICS WASTE WATER MONITORING RESULTS 2004

Licence

Month :

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

BOD

QENOS PTY LTD

2005 Annual Report to ACNCG

CONTENTS CONTENTS 2

SUMMARY 3

INTRODUCTION 4

SAFETY HEALTH and ENVIRONMENT (SH&E) POLICY & CHARTER 5

2004 AUDIT PROGRAM 7

SH&E MANAGEMENT SYSTEM 7

COMMUNITY COMPLAINTS 8

ENVIRONMENTAL INCIDENTS 9

EPA WASTE DISCHARGE LICENCES 10

CITY WEST WATER TRADE WASTE AGREEMENT 12

PRESSURE SAFETY VALVE PERFORMANCE 13

NOISE ABATEMENT 14

WASTE REDUCTION PERFORMANCE MEASURES 16

SOLID & EPA PRESCRIBED WASTES 17

ENERGY EFFICIENCY & GREENHOUSE GASES 19

GROUNDWATER MANAGEMENT PLAN 20

ENVIRONMENT IMPROVEMENT PLAN (EIP) 21

COMMUNITY RIGHT TO KNOW AND COMMUNIY INTERFACES 21

PERSONAL SAFETY PERFORMANCE 22

HEALTH INITIATIVES 23

MAJOR HAZARDS FACILITIES (MHF ) REGULATIONS 24

DANGEROUS GOODS STORAGE 26

SH & E INCIDENTS 27

Page 2

QENOS PTY LTD


SUMMARY In 2004, production at Qenos was again steady while achieving best ever Safety Health & environment performance Highlights of performance this year are:

SCAL-2 turnaround completed on schedule, on budget with no complaints or

reportable environmental events

Lowest ever number (nine) of community complaints.

Lowest ever number (two) of recordable environmental incidents.

Equal lowest number (four) of License non compliances.

Best ever Injury performance with a Total Recordable Injury Ratio (TRIR) of 0.58 for

Altona.

The last sulfatreat bed has been removed from site without incident.

Risk reduction targets for Altona exceeded with 108 % of target completed.

SCAL-1 plant conversion to LPG/Ethane feed has been progressed on Schedule.

Plastics site has completed 4 years without a reportable incident.

Lowest ever butadiene emissions.

Lowest ever Benzene emissions.

Areas for improvement are:

Continue to reduce the number of contractor injuries to the same level as employees.

Complete the conversion of SCAL-1 to LPG/Ethane feedstock which will reduce

emissions, greenhouse gas production & energy consumption.

Page 3

QENOS PTY LTD


INTRODUCTION In July 1999, Orica Limited and Kemcor Australia Ltd combined their polyethylene, polypropylene, synthetic rubber and engineering plastics operations into a new joint venture, Qenos Pty Ltd. Qenos Pty Ltd is owned equally by ExxonMobil and Orica and operates plants in Sydney and Altona. This annual report addresses the year 2004 operations of the four manufacturing sites at Altona, Qenos Olefins, Qenos Plastics, Qenos Resins and Qenos Elastomers.

Figure 1Total Production (kT)

673 700 691

532

353

549 577 587

0100200300400500600700800

1997 1998 1999 2000 2001 2002 2003 2004

Total production across all the sites in kilotonnes is shown in Figure 1. This is based on production of hydrocarbon intermediates that are transferred to other plants as well as production of final products for sale. Production was normal in 2004 with few interruptions to operations. The SCAL-2 and Plastics turnarounds were completed on schedule in February/March Qenos Olefins Qenos Olefins uses ethane gas from Bass Strait and gas oil liquid from the Mobil Altona refinery to produce ethylene and propylene (used to manufacture plastics) and butadiene (used to manufacture synthetic rubber). Three byproducts (gasoline, quench oil and gas oil tar) are also produced. The SCAL-1 plant will not be able to operate economically with gas oil liquid feed post November 2005 when the clean fuels regulations come into force. A $55 million project to convert the SCAL 1 plant from gas oil feedstock to LPG/Ethane feedstock is underway and is progressing on schedule for a December 2005 start up. Qenos Plastics Qenos Plastics uses ethylene from the Olefins site to manufacture polyethylene. The low-pressure polymerisation plant produces high-density polyethylene (HDPE) used for products such as milk bottles, irrigation and gas piping and household containers. Qenos Resins Qenos Resins also produces HDPE from ethylene manufactured by Olefins but by a different process from Qenos Plastics. The HDPE from Resins is used in a similar range of products to that from Plastics, but especially for Mobile Garbage Bins.

Page 4

QENOS PTY LTD


Polypropylene is also produced at Resins from propylene manufactured by Olefins. Polypropylene, a harder plastic material than HDPE, is used in the manufacture of films, tapes and injection moulded products eg. food containers. Chemical grade propylene will no longer be made post the SCAL-1 conversion. The refinery grade propylene produced by the SCAL-1 will be exported to BASELL who have acquired the QENOS polypropylene business. The RESINS polypropylene plant will be converted to polyethylene production. Qenos Elastomers Qenos Elastomers manufactures polybutadiene rubber (BR) by the polymerisation of butadiene in a solution process. The major feedstock, butadiene is supplied by the Olefins site. Qenos Elastomers is the only producer of synthetic rubber in Australia and the products are supplied to a wide range of industries with the tyre industry as the major customer. Following the conversion of SCAL-1 to LPG/Ethane feedstock butadiene feedstock will no longer be available for the BR plant and it is schedule to close down in October 2005. SH&E POLICY & CHARTER Qenos SH&E POLICY Qenos has a combined Safety, Health and Environment Policy to match the integrated approach in its Safety, Health and Environment Operating System (SHEOS). This Policy incorporates the best aspects of policies from shareholders, and includes reference to Responsible Care. The Policy is as follows: At Qenos, we believe that all injuries, occupational illnesses and environmental incidents are preventable. We are committed to, and everyone who works at Qenos must show responsibility for, operations, products and practices that protect the safety and health of our employees, contractors, customers and the community, as well as protecting the environment. This is more than another element in our business competing for priority; it is an absolute requirement. We will: strive for a workplace that is free from injury, illness and incident encourage employee initiatives that contribute to a safe and improved environment

at work, home and in the community minimise risks associated with the manufacturing, transportation, use and disposal

of our products anticipate, analyse and discuss risks with those affected, and monitor events to

ensure proper control conduct all operations and market all products with adequate safeguards

Page 5

QENOS PTY LTD


be prepared for emergencies, responding quickly and effectively to incidents resulting from our operations

efficiently use materials and energy, and dispose of wastes in a safe and

environmentally sound way continuously improve our safety, health and environmental performance through

effective management systems, measurements and targets expand our knowledge of safety, health and the effect of our operations on the

environment, and share this knowledge with others strive to be a trusted and responsible member of the community through

performance, full and open communication, and involvement work with others to develop responsible laws, regulations and standards, based on

sound science and assessment of risks, as required to further safeguard the workplace, community and environment.

These commitments are in addition to our basic intent to comply with all safety, health and environmental laws, regulations and Responsible Care requirements. Risk: identify it, assess it, control it. In addition, all employees are asked to sign a Safety, Health and Environment Charter. The Charter sets out accountabilities for all employees and line managers. SH&E CHARTER Everybody Learn and follow all SH&E requirements related to the job

Maintain SH&E awareness in all tasks, preventing injuries, illnesses or safety or

environmental incidents

Maintain a clean and orderly work area at all times

Constantly review the workplace for hazards which could lead to injury, illness or incident and initiate appropriate corrective actions

Report to work fit for duty without impairment from alcohol, drugs, medications or other influences

Address improper SH&E practices observed in co-workers including contractors

Look for opportunities to improve SH&E performance and actively participate in SH&E improvement activities

Immediately report all injuries, illnesses and safety and environmental incidents

If ill or injured, actively participate in rehabilitation programs to promote recovery.

Page 6

QENOS PTY LTD


Line Managers Clearly communicate the vision and Expectations and keep SH&E as the top priority in

all decisions, actions and communications

Provide leadership for the development and implementation of SH&E plans

Ensure that rules and procedures for preventing all SH&E incidents in your work area are in place and are enforced

Lead by example by setting high SH&E standards, following rules, procedures, and using good work practices

Know the SH&E requirements of the job performed by the people you lead and ensure they are appropriately trained

Audit work practices frequently and do not tolerate any deviations from required standards, addressing any known SH&E non-conformance or opportunity for improvement with appropriate priority

Ensure that all contractors are managed or supervised to the same standards as Qenos employees

Create an environment of openness, trust and mutual respect which allows everybody to excel and be recognised for good SH&E performance

Participate in investigation of SH&E incidents and ensure that recommendations to prevent recurrence are followed through to completion

Promptly arrange rehabilitation for an ill or injured employee, providing full support for them and their family.

2004 AUDIT PROGRAM The 2004 audit program included internal reviews of the Qenos Safety, Health and Environment Operating System (SHEOS) and a QENOS Regulatory Compliance audit of the Resins site. There was no EPA accredited license audit in 2004 after the 2003 audit recommended a longer interval between audits. The EPA, Accredited License auditor and community representatives will meet with QENOS in April 2005 to discuss future accredited license audit requirements. The oversight program for Major Hazards Facilities was conducted by Work safe SH&E MANAGEMENT SYSTEM An internal assessment audit of the SH&E Operating System(SHEOS), which incorporates the Safety Management System, Environment Management System and Responsible Care

Page 7

QENOS PTY LTD


requirements confirmed continuing improvement in our SHEOS, during 2004. The long term continuing improvement of the SHEOS is shown in Figure 2.

The average rating for the 21 practices within SHEOS for 2004 was 3.88 (out of a possible 4.0.), which was an incremental improvement on our average rating of 3.7 for the 2003 assessment.

Figure 2

Altona OIM's Improvement History

1.5

2

2.5

3

3.5

4

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Ave

rage

Rat

ing

QenosECOIC

COMMUNITY COMPLAINTS The number of complaints attributed to Qenos operations of nine in 2004 is the lowest on record. This was achieved by managing stable planned plant operation and maintaining a strong focus on managing flare use and minimising the time that effluent was stored in the storm pond at the Olefins site Effluent Treatment Plant (ETP) Four of the complaints during 2004 were associated with flaring from the Olefins site. One event in November received two complaints about flare smoking following a boiler trip in November. Use of the flare during planned events was limited to a level that avoided smoking and minimised the potential for noise. Three of the complaints were for Odour from the Olefins site ETP with two of these complaints associated with off spec water being stored in the storm pond during January. Major maintenance was performed on the ETP during 2004 to improve performance of the unit. At the annual odour audit there was a noticeable improvement in the level of odour associated with ETP operation. During 2004 the last Spent Caustic Carbonation catalyst bed removal was completed without any off site impact. Historically this activity has generated a significant number of complaints for an off site sour odour. A team of Qenos and Collex people worked together to plan and complete this last bed removal without any external impact. One odour complaint was attributed to the Olefins ETP during normal operation in January.

Page 8

QENOS PTY LTD


Figure 3

Community Complaints

66

32

59

39

27

66

39

19 16

41

9

0

10

20

30

40

50

60

70

94 95 96 97 98 99 00 01 02 03 04

ENVIRONMENTAL INCIDENTS Two incidents were reported in 2004 in accordance with the agreed Leak and Spill reporting procedure. This is the lowest ever annual number for Qenos and is down from ten incidents in 2003. All have been discussed at past ACNCG meetings. ELASTOMERS SITE There were no reportable incidents on the Elastomers site in 2004. OLEFINS SITE There was a significant improvement with just one reportable incident on the Olefins site during 2004 down from seven in 2003. 9/02/2004 Olefins Tar pump, P-109A, packing failed, releasing hot tar and quench oil to

deck. Approximately 300-400 litres.

A modern mechanical seal will be able to be fitted to this pump. When mechanical seals were last evaluated for this pump suppliers were not able to provide a seal to meet the process design conditions. Full details of these incidents were issued to EPA and the ACNCG at the time of the incident. PLASTICS SITE There were no reportable incidents at the Plastics site in 2004. RESINS SITE There was 1 reportable incident at the Resins site in 2004.

Page 9

QENOS PTY LTD


3/03/2004 Resins Solvent overflow from seal pot into bunded area when a transfer was not stopped. Approx 5000 litres.

EPA WASTE DISCHARGE LICENCES Table 1 shows a comparison of the estimated emissions from the Olefins, Elastomers, Plastics and Resins sites with the discharge limits specified in the EPA licence. There are no exceedances. A 20 % reduction in Butadiene and benzene emissions has been achieved. Table 1: Qenos Performance compared with EPA Licence: Compound EPA bubble

licence, tpa or gm/min

2001 emissions,

tpa or g/min (excludes Resins)

2001 emissions,

tpa or g/min

(excludes Resins)

2003 emissions,

tpa or g/min

(includes Resins)*

2004 emissions, tpa or g/min

(includes Resins)*

Ammonia 12 6.4 6.4 6.4 6.4 Benzene 15 7.7 6.6 5.9 4.4 Butadiene 45 11.8 31.4 20.4 16.2 Cyclohexane 15 6.5 6.5 6.3 6.4 Carbon monoxide

811 gm/min 660 g/min (peak rate)



417 gm/min Av 660 g/min (peak rate)

Hydrogen Chloride

4.4 gm/min N/A N/A < 0.1 g/min ( Nil)

0.12g/min

Nitrogen Oxides 578 456 462 477(458) 372 (354) Particulates 175 gm/min 76 g/min

(peak rate) 76 g/min (peak rate)

116 g/min (peak rate) (76)


Styrene 5 1.0 0.5 0.4 0.4 Sulphur dioxide 440 119 124 142 175 Total Organic Compounds

1500 317 380 709(328) 719

* For comparison with previous years, figures in brackets refer to emission levels from Elastomers, Olefins and Plastics only. The most recent boiler stack test results have seen an increase in sulphur dioxide from spent caustic tail gas burning and a reduction in Nitrogen Oxides compared to previous years. The increased Sulphur dioxide level is still well within the license limits and is offset with the elimination of potential odours from Spent Caustic Catalyst changes.

Page 10

QENOS PTY LTD Table 2 shows a comparison of the results of water discharge at the Qenos Plastics site with the discharge limits specified in the EPA licence. Testing showed compliance with licence limits. Table 2 Plastics Effluent Monitoring Summary, 2004 PLASTICS WASTE WATER DISCHARGE TO LAND ( IRRIGATION / DAM ) 2004

Total

Month : Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Volume ( m3 ) 14157 6730 13750 11932 6340 2892 12489 4713 8445 11118 8671 9393 110630 Licence Requirement : Weekly discharge volume : 10,000 m3

Yearly discharge volume : 220,000 m3

PLASTICS WASTE WATER MONITORING RESULTS 2004 Licence

Month : Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

BOD

QENOS PTY LTD


EPA LICENCE NON-CONFORMANCES There was one noncompliance with Qenos EPA licence in 2004: Resins Exceeded particulate emissions allowance when PP dryer cyclone normal outlets

blocked, sending all product out through roof vents.

CITY WEST WATER TRADE WASTE AGREEMENT Waste minimisation is a requirement of the Agreement and this is achieved through the EIP. However, Qenos is to be stewarded by the ACNCG and CWW on the total effluent to sewer as well as the traditional wastes and emissions. Sewer discharge volume relative to production is shown in Figure 4.

Figure 4

Total Waste to Sewer ML/kT of Production

3.2 3.0 2.7 3.04.0

3.0 2.9 2.5

0.01.02.03.04.05.0

1997 1998 1999 2000 2001 2002 2003 2004

Sewer discharge volume per kilotonne of product across all Altona sites has dropped by a very significant 12% this year, reflecting Qenoss successful efforts at reducing water usage. These efforts were publicly recognised when Qenos won the 2004 Savewater Award for both the Metropolitan Manufacturing category, and the overall Award for Excellence. The sewer discharge volume from Olefins and Elastomers was 6% lower than last year, as the water savings initiatives implemented in 2003 were consolidated for the full year. This includes the improved collection and re-use of steam condensate, better effluent temperature management guidelines incorporating the TWA variation allowing short duration temperature spikes up to 42oC, and the redirection of Elastomers effluent to the Plastics sites waste water treatment plant for on-site re-use. Further improvements were made at Olefins in 2004 by using a control valve and process control application to manage the fresh water addition for sewer temperature management. Both effluent cooling heat exchangers at Olefins are undersized, and new larger exchangers have been ordered for delivery and installation in mid-2005. These should eliminate the need for addition of cooling water for effluent temperature management for normal plant operation. Qenos has also committed to conduct a study of water usage and effluent salt loading across the Altona sites in early 2005, to identify potential improvement opportunities. The SCAL-1 conversion project will see considerable reduction in water and effluent volumes with the new process and associated plant closures.

Page 12


CWW Trade Waste Agreement Non-conformances The following incidents have been reviewed with the EMT. Olefins 28/1/04 The Olefins Final Effluent sample tested 93mg/l for ammonia, compared to a TWA limit of 50 mg/l. The ammonia stripping tower in the BEAL unit, T506, had experienced a reboil problem which caused high ammonia levels in the bottoms stream going to sewer. The ammonia analyser on this stream was not functioning properly and consequently there was no indication of high ammonia or alarm to alert the operators. Olefins 6/6/04 The Combined Final Effluent sample tested 1.8 mg/l for sulphides versus a TWA limit of 1.0 mg/l. The Olefins API Separator was bypassed for cleaning at the time, and the lower effluent residence time produced higher suspended solids than normal, leading to the high sulphide result. Resins 10/6/04 Effluent sample collected by CWW tested 3.2 mg/l for Exxsol D30 solvent, versus a spec limit of 2.0 mg/l. No specific event was identified to cause a high solvent level, but this is an ongoing issue that is being addressed. PRESSURE SAFETY VALVE PERFORMANCE The final recommendations of the Pressure Management Review were completed in 2004. Olefins focus is on ensuring stable operations to continuously reduce the SV lift frequency, and the decrease in lifts of 13% for the Olefins site and 22% decrease for Altona. Of the 48 lifts there were

Six associated with a failed rotor of the Olefins SCAL-1 Propylene refrigeration compressor in February.

Four associated with SCAL-2 start up after the turnaround. Five associated with a steam failure in November

During 2004, there were 48 pressure safety valve lifts across all the Qenos sites, significantly lower than the 61 recorded for 2003. There was a total emission of 14.2 tonnes of hydrocarbon to atmosphere from PSVs in 2004 with no emission of benzene or butadiene.

Table 3 PSV lifts by site

Site No. of PSV Lifts 2002 2003 2004 Olefins 67 47 41 Elastomers 3 5 2 Plastics 6 1 1 Resins 6 8 4 TOTAL 82 61 48

Page 13


NOISE ABATEMENT Environmental noise data continued to be collected from the noise meter located at Charles Road, within one of the closest residential areas to the Complex. The noise meter is connected by a microwave link to a computer at the Plastics site. During 2000 a new basis for the analysis and reporting of noise levels was developed. The method uses noise levels measured under a set of standard conditions as the indicator of Qenos progress in reducing background noise from Olefins and Plastics. The parameter measured by the meter is LA90, or the noise level that is exceeded 90% of the time, over a long period. The LA90 gives a better indication of background noise levels because it filters out peaks caused by short-term noise sources eg. nearby passing cars or wildlife. The LA90 measured at Charles Road is related closely to the wind direction and speed. LA90 data collected when the wind is blowing towards the noise meter from the Complex, at between 2 and 4 metres per second and between the hours of 10 pm and 6 am will be used as a measure of Qenos progress in reducing plant noise. There was a slight adjustment to widen the angle of the relevant wind data in May 2002 as it was felt that some Qenos sources may not have been captured by the previous settings. Qenos has a target of a 2.5dBA reduction in noise by 2005 due to noise abatement measures at the major noise sources within the Olefins and Plastics site. In February 2004, during the Olefins SCAL-2 plant scheduled shutdown, the need arose to also shutdown both the SCAL-1 plant and the Plastics plant, providing an opportunity to obtain a baseline noise measurement comparison without the plants running. The difference in noise level was determined to be 2.1dBA. Back in 2000 when all Qenos plants were also shutdown, the difference in noise level was found to be about 4.6 dBA. This indicates that the noise level contribution from the Qenos plants operation has now been reduced by 2.5dBA, which means the target reduction has been achieved. See Figure 6 below. When this data was presented to the Environment Monitoring Team, it was agreed that the regular background noise monitoring could now be suspended, although the noise meter equipment will be left in place should it be required again in the future. Qenos will still continue to implement on-site noise reduction projects, which will contribute to the overall noise level reduction, as well as to address specific identified noise sources.

Page 14

Figure 5

Noise at the Charles Rd noise meter under standard conditions (Between 10 pm and 6 am, wind direction 265-285, (265-323 from May-02), wind velocity 2-4 m/s)

54.3

98

54.1

5

54.7

9

54.1

5

54.4

3

54.5

9

53.2

8

50.0

6

49.4

3

49.8

8

52.1

6 53.0

2

52.9

3

50.4

0651

038

51.3

2 52.2

4 53.1 53

.45

52.6

7

52

50.6

7

51.2

3 52.3

4

53.0

5

52.8

5

53.3

6

53.6

7

52.7

52.5

3 53.3

8

48.8

50.1

8

49.2 49

.57

50.1

2

50.7

8

50.6

50.8

5

50.3

6

49.6

6 51.

19 51.6

3

49.5

3

51.8

4

52

40

42

44

46

48

50

52

54

56

58

60

Apr

-00

Jun-

00

Aug-

00

Oct

-00

Dec

-00

Feb-

01

Apr

-01

Jun-

01

Aug-

01

Oct

-01

Dec

-01

Feb-

02

Apr

-02

Jun-

02

Aug-

02

Oct

-02

Dec

-02

Feb-

03

Apr

-03

Jun-

03

Aug-

03

Oct

-03

Dec

-03

Feb-

04

Apr

-04

Ave

rage

mon

thly

La9

0 no

ise

(dB

(A))

Average after meter calibration in Dec 200351.6 dB(A)

Average prior to Oct 2002 all plant shutdown54.4 dB(A)

Average while all plants were shutdown49.8 dB(A)

Difference = 4.6 dB(A)

Noise level with all plants shutdown49.5dB(A)

Difference = 2.1 dB(A)

Noise level reduction2.5 dB(A)

2005 Annual Report to ACNCG Page 15


WASTE REDUCTION PERFORMANCE MEASURES VOLATILE ORGANIC COMPOUNDS (VOCs) Total VOC emissions to the atmosphere from the Qenos sites are shown in Figure 6. VOCs include ethylene, propylene, propane, butadiene, ethane, styrene, benzene and mineral turpentine.

Figure 6VOC Emissions

1080970 849

2976

2263

1062912 711 709 719328

0

500

1000

15002000

2500

3000

3500

93 95 96 97 98 99 00 01 02 03 04

VOCEmissions

Total VOC emissions from the four sites increased slightly in 2004. The VOC per tonne of production has decreased however due to increased production. This can be seen in figure 7 below

Figure 7VOC tonne/kT of Production

4.4

3.2

1.5 1.7 1.7 1.3 1.3 1.2

0.0

1.0

2.0

3.0

4.0

5.0

1997 1998 1999 2000 2001 2002 2003 2004

Efforts to reduce VOC emissions are focused on reducing emissions of the Class 3 indicators, benzene and butadiene, as a priority. In 2003, Qenos submittted a plan to reduce emissions of Class 3 indicators, especially butadiene, which became a Class 3 indicator in 2002. The plan gives priority to pipes carrying process streams containing benzene and butadiene in identifying and repairing leaking valves. While the threshold value above which the EPA requires a valve to be repaired is 10,000 ppm, Qenos has dropped the threshold to 200ppm for streams containing Class 3 indicators. This is equivalent to worlds best practice. Figure 8 shows benzene emissions to air. Benzene emissions dropped slightly to a record low level while production increased slightly.

Page 16


Figure 8Benzene Emissions - Tonnes

27

18

13

7 8 8 7 6 4.4

05

1015

2025

30

93 97 98 99 00 01 02 03 04

Butadiene emissions, shown in Figure 9, were reduced further to a new record low level (except when the Butadiene Extraction unit was shut down for most of 2001) in 2004, due to the institution of the more stringent Leak Detection and Repair program. The lower leak threshold limit in the Leak Detection and Repair program continues to reduce fugitive butadiene emissions.

Figure 9Butadiene Emissions - Tonnes

128

4822 21 22 12

31 20 16.2

0

50

100

150

93 97 98 99 00 01 02 03 04

Styrene emissions to air are shown in Figure 10. The main source of styrene emissions was the SBR dryer at Elastomers. With the closure of the SBR plant in 2000 styrene emissions have been almost eliminated. A small source of styrene remains as part of the Olefins process.

Figure 10Styrene Emissions -Tonnes

47

27 25 23 20

1 0.5 0.4 0.50

10

20

30

40

50

93 97 98 99 00 01 02 03 04

SOLID AND EPA PRESCRIBED WASTES Total EPA prescribed wastes and non prescribed wastes (general wastes) transported from Qenos are shown in Figures 11, 12 and 13. The total waste transported off site in 2004 was

Page 17


slightly higher than 2003, giving a small increase in the waste per unit production (see Fig 14).

Figure 11Total Prescribed Waste - Tonnes

10000

3360 3123 2836 28941765 2466

2576 2680

0

2000

4000

6000

8000

10000

12000

93 97 98 99 00 01 02 03 04

Note: Figures since 1997 include the Resins site.

Figure 12Total General Waste - Tonnes

1116963

1134994

1167

677 750515

802

0200400600800

100012001400

93 97 98 99 00 01 02 03 04

Figure 13Total Solid Waste tonne/kT of Production

6.4 6.1 5.5

7.66.9

5.9 5.8 5.9

0.0

2.0

4.0

6.0

8.0

10.0

1997 1998 1999 2000 2001 2002 2003 2004

General waste increased by almost 300 tonnes over the 2003 figure. This is mainly due to three factors:

In 2003, the Resins mudhole powder stripping process underperformed resulting in the powder being reclassified from general waste to prescribed waste. The process was restored to normal historical operation and the properly stripped powder has again been sent out as general waste.

General waste from Olefins was higher due to the large SCAL-2 turnaround held earlier in the year

The 2003 figure was under-reported by 137 tonnes of non-prescribed polymer waste

Page 18


The main reason for increased prescribed waste generation in 2004 was the major clean out of the Olefins ETP separator bays, which accounted for over 400 tonnes of prescribed waste. This was offset by some good reductions from other waste sources. The project to eliminate the sulfatreat catalyst beds in the Olefins Spent Caustic Carbonation unit by redirecting the tail gas into the boilers was implemented early 2003. The second of the two catalyst beds has been emptied in 2004 to complete this project. Olefins will no longer produce this waste stream, eliminating about 100 tonnes per year of highly odorous solid waste. The Collex project to convert some wastes into fuel briquettes has progressed slowly, with the Works Approval being submitted to EPA before year end. Collex expects to commission the new facilities later in 2005. Potentially, up to 50% of Qenos solid prescribed waste can be converted to fuel in this process, thereby removing the need to send these wastes to secure landfill. Considerable effort was made in 2004 to identify a better disposition for two byproduct streams produced at the Resins site, polyethylene wax and powder collected from the mudhole, which are currently disposed of to landfill. The preference is to find someone who can use this material productively, rather than dispose of it as a waste. However, at this stage no suitable alternative has been able to be adopted. Both streams can go to the briquetting process when it becomes available, eliminating the vast majority of Resins prescribed waste to landfill. The conversion of the Olefins SCAL-1 plant and subsequent closure of other operating units across Altona will have a significant impact on reducing the amount of waste generated. This will be reflected in the 2006 figures. ENERGY EFFICIENCY AND GREENHOUSE GASES Qenos operations are large consumers of fuel and electricity. This results in significant carbon dioxide emissions from both on-site furnace and boiler combustion and off-site electricity generation. The CO2 per tonne of production is shown in Figure 14. In 2003, Qenos Altona submitted a Greenhouse Management Report to the Victorian EPA as required by the Greenhouse Gas Emissions and Energy Efficiency in Industry PEM. The report described projects which are scheduled to be completed over the next 4 years which are expected to result in savings of 16-17000 tonnes of CO2 per annum. In 2004 five CO2 reduction projects were completed. The conversion of SCAL-1 to gaseous feed, shutdown of Elastomers and Resins PP plant will yield an additional greenhouse gas abatement of 100 Kt/annum from 2006. There was a slight increase in CO2/Tonne production in 2004 resulting from small increments at each of the Olefins, Elastomers & Resins sites. The increase is not significant compared to the long term trend. The 2003 data has been updated to include emissions from Olefins flaring and increased the 2003 C02/Tonne production from 1.09 to 1.11.

Page 19


Figure 14Tonne CO2/tonne production

1.41

1.07 1.07 1.06

1.251.4

1.141.26

1.391.23

1.11 1.13

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

90 94 95 96 97 98 99 00 01 02 03 04

Note: These figures are taken from the Annual Greenhouse Challenge Update. This CO2 equivalent figure includes carbon dioxide produced by the generation of electricity consumed by the plants as well as carbon dioxide produced onsite by fuel combustion. Following international conventions, only CO2 from electricity generation, combustion and methane is covered in figure 14. GROUNDWATER MANAGEMENT PLAN A round of groundwater monitoring was conducted by Qenos in November to coincide with monitoring by the other Complex companies. This will assist in determining the effectiveness of groundwater cleanup activities directed at chlorinated hydrocarbons, being undertaken by Dow and APPL. The monitoring confirmed that the concentration of the benzene plume under the Olefins site is not changing. Importantly, the offsite monitoring wells, downstream of the plume, continue to be benzene free. In one of the Olefins bores north of the Olefins flares a small amount of free phase hydrocarbon liquid was discovered. The hydrocarbon liquid (approximately 300 ml) has been removed from the bore. An action plan has been submitted to the EPA for this bore and includes

Removal of the hydrocarbon from the affected bore Frequent monitoring of the affected and adjacent bores. Investigate the origin of the liquid of the bore. Further integrity testing of plant equipment for potential leak sources

Monthly monitoring since the hydrocarbon phase has been removed has found no further hydrocarbon in the affected or adjacent bores. Testing of the hydrocarbon removed from the bore when compared with current products on site indicates that it is not a current product and that the hydrocarbon is from a past leak. A Groundwater management plan is being developed and has received in principle agreement by the EPA and community following presentation at an EMT meeting. The plan will be formally submitted to the EPA for approval in 2005. Qenos will continue to monitor groundwater on an annual basis.

Page 20


ENVIRONMENT IMPROVEMENT PLAN (EIP) Qenos performance in completing the Action Items in EIP3 is shown below:

Table 3: Completion of EIP items.

Year Completed Deferred Indefinitely Rolled Over

2001 12 1 9 2002 12 0 2 2003 17 0 3 2004 11 0 1

Total 52 1 15

A total of 11 EIP items were completed or closed out in 2004. EIP3 expired during 2004, so all action items were due for completion by year end. Several sub-items from one EIP3 item, Olefins Effluent Treatment Plant improvements, have been rolled over for completion in 2005. The item deferred indefinitely is the desludging of the Elastomers cooling pond. Some of the major achievements included: Greenhouse Gas reduction plan was approved by the EPA development of a sewer inspection program at Olefins completion of the recommendations from the Olefins environmental performance

review consolidation of the water savings initiatives implemented in 2003 EIP3 expired in 2004. EIP4 has been prepared following a new format that includes an annual action plan rather than a three year action plan. This structure better fits the annual business planning model, and recognizes the need for regular review of changing priorities in a mature EIP program. The Environment Action Plan (EAP) for 2005 contains 32 action items, and has been approved by the EPA and endorsed by the other EMT members. This will be stewarded by the EMT as usual, with development of the 2006 plan towards the end of the year. Annual reporting will be incorporated into the EIP4 in the form of a yearly addendum with updated progress reports. COMMUNITY RIGHT TO KNOW AND COMMUNITY INTERFACES Qenos promotion of safety, health, environment and corporate citizenship has continued to be a high priority for the company. A variety of contributions and sponsorship programmes have continued under the Qenos banner. Major activities for 2004 were being the gold sponsor for the Bayside Festival and major sponsor of the Qenos Art Show, the Rotary Club of Altona's various community initiatives

Page 21


including the Police in schools program. Other sponsorships throughout the year included various local sporting and youth clubs, the Williamstown Festival and Literary Festival, Baywest Homeless Youth support and local charity golf days. Support was also extended to local kindergartens and school fundraising activities throughout the Altona and Altona Meadows district. There were no Community Right to Know enquiries received. Over 2004, there was a total of 18 site tours conducted with visits from various schools and universities. Qenos also participated in the Victorian Employers' Chamber of Commerce and Industry (VECCI) MPs in Business program with the Deputy Leader of the Opposition and Shadow Minister for the Environment, Phil Honeywood, MP, spending a day with Qenos and its management understanding the full array of operational and strategic issues confronting Qenos. Qenos participated in PACIAs Open Door Day on 9th October, 2004. Qenos Resins was the only site open to the public with an estimated 350 people visiting the site. Visitors participated in a variety of activities at the Educational Display including a tour of the Technical Centre and Resins facilities. It was a year of Awards for Qenos throughout 2004. Qenos received accolades from the Savewater Awards for their efforts in water sustainability. This was followed later in the year by Qenos winning the Celebrating Melbourne Award for Manufacturing in Victoria. This award reflected the companys efforts in water sustainability, rebuilding of industrial relations with its unions and working with the local community. PERSONAL SAFETY PERFORMANCE Qenos aims for world-class performance in Personal Safety for both its employees and contractors. Table 4 details the number and type of injuries in 2004 and Figures 14 and 15 detail the long-term trend of our performance in this area. ( TRIR is based on the number of reportable injuries per 200,000 hours worked). Measures put in place in 2002/3 have resulted in an improvement in the 2004 TRIR for both Employees and Contractors. The 2004 TRIR for Qenos Altona employees was 0.47 ( 0.6 in 2003) and contractors was 0.87 ( 2.5 in 2003).

Table 4 Personal Safety Performance Figures, Altona 2004

2004 Qenos Contractor

Lost Time Injury 1 1 Medical Treatment/Restricted Work Case Injury

2 1

First Aid injuries 41 18 Total Recordable Injury Rate (TRIR) 0.47 0.87

The three employee reportable injuries were

A lost time injury occurred from an arm strain when clearing a polymer blockage. Three stitches were required for a fitters hand cut by a pocket knife. An operator was put on restricted duties for a shoulder strain after operating a stiff

valve.

Figure 14

Page 22


Altona Own Employee TRIR

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1998 1999 2000 2001 2002 2003 2004

Year

The 2004 Qenos contractor TRIR of 0.87 improved significantly on the 2003 figure of 2.5. The two reportable injuries in 2004 occurred while carrying out low-risk activities, a Draughtsman jumped into a pit and fractured his ankle, and an insulator cut his hand on sheet metal. During 2005 continued emphasis will be placed on all contractor activities.

Figure 15

Altona Contractor TRIR

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1998 1999 2000 2001 2002 2003 2004

Year

HEALTH INITIATIVES Workplace exposure monitoring programs for specific chemical and physical agents continue to be carried out at each of the operating sites. Results indicate that exposures to these hazards are typically maintained below current occupational exposure standards. Personnel receive training in the nature, exposure and control of the hazards present in the workplace. In 2004 the Material Safety Data Sheet system, Infosafe 2000, was used to provide chemical safety information to all personnel. A new MSDS system called Infosafe On-Line

Page 23


was introduced in December 2004 that supersedes Infosafe 2000 and enables remote access to MSDS to enhance emergency response procedures. Hard copy MSDS manuals are available at all sites for operators and emergency services. MSDS are available for all Qenos products on the Qenos website. Qenos maintains management manuals, policies and procedures for hazards encountered in the workplace. Each site has hazard registers that includes asbestos and workplace hazardous substances. In 2004 a major asbestos survey was conducted to ensure all asbestos containing materials are safely contained and labeled. During 2004 all Qenos industrial cooling tower systems had registrations renewed with the Department of Human Services (DHS). Legionella risk management plans for the industrial cooling towers on all sites were internally assessed. Ongoing medical programs continue to show no evidence of adverse health effects arising from workplace exposures. The annual benzene medical surveillance program, which focuses on employees potentially exposed to benzene in the workplace, again reported no health effects that could be related to benzene exposures. Qenos conducts rigorous internal assessments for compliance with occupational health and safety legislation. Continuous improvement projects are initiated as a result of monitoring programs and internal assessments. These projects are stewarded to completion within specified time frames. Qenos is striving to minimize employee noise exposure. During 2004 noise control projects were implemented to reduce employee exposure and plant emissions. MAJOR HAZARD FACILITIES (MHF) REGULATIONS All the Qenos manufacturing facilities have been registered as Major Hazard Facilities. Qenos has a 5 year Licence to Operate, obtained in December 2002 with a condition linked to Olefins SCAL1 conversion project. Post licensing, WorkSafe implement an Oversight activity to ensure licensed facilities safety obligations are met. The scope of WorkSafe oversight covers major incident safety and all other relevant occupational health & safety and dangerous goods regulatory obligations. The oversight activity is managed through a yearly plan established through consultation with the facility (Qenos) and other government agencies (eg MFESB, Office of Gas Safety etc). The activity includes routine site visits that focus on regulatory compliance aspects and a yearly detailed inspection. The detailed inspection incorporates a review of safety management system elements that WorkSafe sees as important for Major Hazard management. In 2004 Qenos had a detailed inspection performed in November, the SMS elements checked were Management of Change, Risk Assessment and Asset Integrity. Additionally a review of WorkSafe nominated safety critical controls was also performed, this included routine testing and fault management. No major issues were identified during the inspection. Items for action are listed in applicable Qenos work lists and will also be followed up in the 2005 oversight plan. WorkSafe additionally use the number of incidents associated with dangerous goods as a performance indicator. Qenos and WorkSafe work closely together on the review of these

Page 24


incidents to determine if there are any issues for follow up. The 2005 Oversight plan will be established in early 2005. A key focus in 2005 will be the proposed SCAL1 Conversion project and the regulatory interaction issues, in particular the revision and update of the Qenos Safety Case. Gas Safety (Safety Case) Regulations In 2005 Qenos intends to submit a Safety Case for the operation of complex gas facilities. These gas facilities include items such as boilers, furnaces and other gas combustion equipment. The Office of Gas safety (OGS) is the regulator with the responsibility of implementing these and the associated Gas Installation regulations. Qenos see this as a means to enhance the effectiveness of our safety management systems and develop stronger links with the OGS. Preliminary work and consultation with the OGS occurred in 2004, this will act as a basis to move forward for the submission. Electricity Safety Management Scheme (ESMS) The Electricity Safety Act of 1998 provides the opportunity for individual companies to apply variations to the regulations to achieve equal or better safety outcomes applicable to electrical installations through the establishment of an ESMS. The Act also provides the opportunity for persons authorised under an approved scheme to be exempt from certain sections of the Act or from the Regulations. The Office of the Chief Electrical Inspector (OCEI) is responsible for electrical safety in Victoria and manages the applications received for ESMSs. Qenos has made application for an employer operator ESMS to the OCEI. This occurred in late November of 2004. Final approval may take up to 18 months.

Page 25


DANGEROUS GOODS STORAGE The following materials classified as Dangerous Goods are stored or processed at Qenos. The quantity range is shown in tonnes. The data presented below is based on Safety Case documentation.

Compressed gas NOS* 0 - 1 Acetylene 0 - 1 Ethylene 1 - 10 Ammonia 10-100 Methane/Natural gas 1 - 10 Butadiene 1000 - 10000 Propane 10-100 Butene/butylene 1000 - 10000 Actrene 230W 1 - 10 Carbon Monoxide 0 - 1 Hexene 10-100 Hexane 0 - 1 DiMethylDisulphide 10-100 Ethane 0 - 1 Acetic Acid 10-100 Ethylene 1000 - 10000 Pyrophoric Hydrogen 1 - 10 Organometallic NOS* 10-100 Hydrogen Sulphide 0 - 1 Flammable Liquid NOS* 1 - 10 Nitrous Oxide 0 - 1 Bis(Triphenylsilyl)Chromate 0 - 1 LPG 1 - 10 Isoprenyl Aluminium 1 - 10 Propylene 100 - 1000 Triethyl Aluminium 1 - 10 Acetone 0 - 1 Ethyl Aluminium Benzene 10-100 Sesquichloride 10-100 Cyclohexane 100 - 1000 Diethyl Aluminium Chloride 10-100 Isopropyl Ether 1 - 10 Quench Oil 1000 - 10000 Ethanol 0 - 1 Magnesium Ethylate 1 - 10 Diesel 10-100 Diethylaluminium Ethoxide 10-100 Petrol (Motor Spirit) 10-100 Heavy Gas Oil 1000 - 10000 Heptane 0 - 1 Carbon Black Feedstock 1000 - 10000 Iso-propanol 10-100 Mobil DTE Light 10-100 Kerosene 1 - 10 Diethanolamine 10-100 Methanol 1 - 10 Ethylene Glycol 1 - 10 Pentane 10-100 Tertiarydodecylmercaptan 1 - 10 Naphtha (olefins gasoline) 1000 - 10000 Diethylhydroxyamine 1 - 10 Toluene 1 - 10 Organic Peroxide 1 - 10 Turpentine substitute 1000 - 10000 Butane 0 - 1 Cuprous Ammonia Acetate 100 - 1000

* NOS denotes Not Otherwise Specified Technical information and Material Safety Data Sheets are available for these materials on request.

Page 26

SH&E INCIDENTS: QENOS PTY. LTD. ALTONA SITES PROCESS SAFETY PERSONNEL HEALTH &

SAFETY ENVIRONMENT TRANSPORT

SIGNIFICANT INCIDENTS

Fatality 0

2 0 Leak or spill requiring immediate MFB and EPA notification 6

00

LTI3 - Employee - Contractors

0 0

A multiple (>=4), accepted community complaint incident

0 00

OTHER INCIDENTS

1 Medical Treatment 4 -Emp - Cont

3 2

Leak or spill requiring post-event notification to relevant authorities6

2 0

First Aid 5 - Emp - Cont

41 18

Accepted community complaint

9

Table 7: Incident Summary 1. Significant Plant Incident: an incident such as a fire, hazardous chemical or flammable dust release or explosion that results in the sounding of the community alarm or accident costs in

excess of $500k

2. Fatality: a work related death of an employee, on-site contractor or visitor occurring in the period of the survey.

3. Lost Time Injury/Illness: work related occurrence that results in a permanent disability or time lost from work of one full day or shift or any time after the day of the shift on which the injury occurred.

4. Medical Treatment Injury/Illness (not including those involving lost time): a work related injury requiring treatment by a medical practitioner which is beyond the scope of normal first-aid according to the Australian Standard.

5. First-aid Treatment: a work related one-time treatment and any follow-up visit for observation, of minor scratches, cuts, burns, splinters and the like which do not normally require medical care. Such treatment is considered to be first-aid even if administered or supervised by a medical practitioner.

6. Leak and Spill: see Leak and Spill Reporting Procedures, 1995

Serious Transport Incident: an occurrence posing a danger or potential danger to life, property or the environment which results from a leakage, spillage, fire or explosion of goods during transport, including loading and unloading and requiring the presence of emergency services.

7.

8. Other Transport Incident: an occurrence posing a minor danger to persons, property or the environment which results from a leakage, spillage, fire or explosion of goods during transport, including loading and unloading.

2005 Annual Report to ACNCG Page 27

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