FITNESS FOR PURPOSE REPORT 2007 -...

FITNESS FOR PURPOSE REPORT 2007

For

Pipeline Licence No 2 MOOMBA TO PORT BONYTHON LIQUIDS

PIPELINE

Document No S -34-102-FFP-G-001

August 2007

Disclaimer: This report has been prepared by Epic Energy on behalf of Pipeline Owner Santos Limited. Information presented in this report is based on the best available knowledge Epic Energy has as the operator of the Santos Owned Moomba to Pt Bonython Liquids Line. Epic Energy cannot and will no be held liable for any information contained in this document

Table of Contents

EXECUTIVE SUMMARY ......................................................................................1

1 OVERVIEW OF FACILITIES ..............................................................3

2 MANAGEMENT SYSTEMS ................................................................4

3 RISK MANAGEMENT ........................................................................8

4 PHYSICAL ASSESSMENT OF FACILITIES ....................................12

5 EFFECTIVENESS OF MANAGEMENT SYSTEMS..........................19

6 IMPACT OF THE ENVIRONMENT ON THE PIPELINE ...................24

7 POTENTIAL FOR SERIOUS INCIDENTS ........................................25

8 PIPELINE UTILITIES........................................................................25

9 FITNESS FOR PURPOSE ................................................................25

10 CONCLUSIONS ...............................................................................27

11 APPENDICES...................................................................................27

LIST OF ABBREVIATIONS ALARP - As Low As Reasonably Practicable AS2885 - Australian Standard 2885 – Pipelines- Gas and Liquid Petroleum ASME - American Society of Mechanical Engineers CAR - Corrective Action Request CFS - Country Fire Service COP - Code of Environmental Practice CMMS - Computerised Maintenance Management System COPS - Closed Order Potential Survey CP - Cathodic Protection DCVG - Direct Current Voltage Gradient EMS - Environmental Management System ERC - Emergency Response Centre GPS - Geographical Positioning System GIS - Graphical Information System HAZOP - Hazard and Operability Study ILI - Inline Inspection IMP - Integrity Management Plan KP - Kilometre Point KPI - Key Performance Indicator LMS - Land Management System LPG - Liquid Petroleum Gas MAOP - Maximum Allowable Operating Pressure MAP - Moomba to Adelaide Pipeline MFS - Metropolitan Fire Service MLV - Mainline Valve MIC - Microbiologically Influenced Corrosion NB - Nominal Bore NDT - Non Destructive Testing NGL - Natural Gas Liquid P&ID - Piping and Instrumentation Drawing PIRSA - Primary Industries and Resources of South Australia PS - Pump Station PSV - Pressure Safety Valve RBI - Risked Based Inspection ROC - Remote Operation Controller ROW - Right of Way SCADA - Supervisory Control and Data Acquisition SCC - Stress Corrosion Cracking SEO - Statement of Environmental Objectives SES - State Emergency Service SMS - Safety Management System SRB - Sulphate Reducing Bacteria SWER - Single Wire Earth Return TRU - Transformer Rectifier Unit TSCC - Transportation Services Control Centre UHF - Ultra High Frequency VHF - Very High Frequency

EXECUTIVE SUMMARY The Moomba to Port Bonython “Liquids Pipeline” is owned by the South Australian Cooper Basin Joint Venture. The pipeline is licensed under Pipeline Licence 2 (PL 2) and was designed and constructed in accordance with AS 2885. The pipeline is operated and maintained in accordance with this standard by Epic Energy on behalf of pipeline owners. The Pipeline is 659km long and 355.6mm in diameter. Pump Station 1 injects product into the pipeline at the Moomba plant for transport to Port Bonython. Along the pipeline there is one out of service Pump Station, facilities for two future Pump Stations and 25 mainline valves. Pigging facilities are permanently installed at either end of the pipeline and at each Pump Station location and future Pump Stations. Epic Energy operates and controls the pipeline from the Transportation Services Control Centre (TSCC) in Melbourne, Victoria using the Epic Energy Telvent SCADA System. The pipeline can also be monitored and controlled by a back up system located at Epic Energy’s emergency control centre at Dry Creek, South Australia. In accordance with the South Australian Petroleum Act 2000 and the Petroleum Regulations Part 6 Division 4 this Fitness for Purpose Report assesses the risk imposed by the pipeline on: • The environment • Public health and safety • Security of production of supply of natural gas This report specifically addresses: • The physical condition of the pipeline • The effectiveness of management systems for the operation and

maintenance of the facility • The potential for the environment to effect the safe and effective operation of

the pipeline • The potential for serious incidents to occur along the pipeline including the

potential for hazardous materials or substances stored at or near the pipeline to affect the safe or effective operation of the pipeline

• The adequacy of and reliability of the utilities in order to enable the effective operation of the pipeline

Fitness for Purpose Reports are required to be carried out at five-yearly intervals with the previous report prepared in June 2002.

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Based on the following assessments of the Pipeline: • Internal and external defect assessment using Inline Inspection tools. • Inspection of pig launchers and receivers • Coating defect surveys and dig up inspection programmes • A risk review carried out in accordance with the requirements of AS 2885 in

2007 • Audits and improvements of the management systems governing the manner

in which the Pipeline is operated and maintained • Corrosion and protection system surveys and other relevant information. • Maintenance Records The Moomba to Port Bonython Liquids Pipeline is assessed, as at June 2007, as being in good condition and is considered “fit-for-purpose” for the current and future use, for at least the next five years.

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1 OVERVIEW OF FACILITIES The design parameters and description of the facilities for the pipeline are summarised in Table 1. A detailed description of facilities is given in Appendix 1. The pipeline is considered to include all the facilities downstream (but not including) the inlet isolation valves to the pump station from the Moomba Plant to the outlet isolation valves from the meter runs at Port Bonython. The Moomba to Port Bonython Liquids pipeline transports a liquid mixture containing propane, butane, gas condensate and crude oil.

Table 1 – Moomba to Port Bonython Technical Data Date Constructed 1982/83 Date Commissioned 1984 Length, km 659 Diameter (OD), mm 355.6 Wall Thickness,mm: -Nominal -Special Crossings (eg: rivers, roads, railways)

7.14 8.74

Pipe Grade API 5LX-52 ERW MAOP, kPa 10.3 Fluid Crude/condensate and high vapour pressure liquid

hydrocarbons Coating Polyken Tape System: Butyl primer/Tape/Butyl

mastic/Tape/Polyethylene outer wrap. Depth of cover Nominal 900 mm, 1200 mm at road, rail and creek

crossings Main Line Valves 25 off Adamson & Chronister 350 mm Class 600

slab gate valves. Actuators 17 - Every third valve from Moomba to Mainline

Valve MLV 13 is remotely operated while the others are manually operated. From MLV13 to Port

Bonython all valves are operated remotely. Pump Stations 1 active ( Moomba) , 1 decommissioned ( pump

station 3) , 2 future sites Scraper ( Pig Launcher/ Receiver ) Stations

Scraper stations to facilitate pigging are installed at Moomba, MLV 7, MLV 13, MLV 19 and Port

Bonython. Meter Stations 2 – Inlet and Outlet Cathodic Protection 14 Transformer Rectifier Units Installed SCADA 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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2 MANAGEMENT SYSTEMS 2.1 SAFETY MANAGEMENT SYSTEMS As the pipeline operator on behalf of Santos Limited, the pipeline owner, Epic Energy demonstrates effective management of health and safety risks through the development and implementation of Safe Operational Procedures and Work Instructions. Epic Energy’s Health and Safety Policy is shown in Appendix 2. The Safety Management System (SMS) developed and implemented at Epic Energy provides all Epic Energy personnel with a framework for the Management of health and safety related risks on facilities operated by Epic Energy, including the Liquids Pipeline.

The Safety Management System provides guidance to personnel at all levels of the organisation, to ensure that all activities on site are undertaken safely. It is an integral part of the overall management system at Epic Energy, designed to complement other systems in order to facilitate the management of safety and risk at each facility. The Safety Management System also provides a means for review of individual performance and a mechanism for continuous improvement of operational performance. The Safety Management System is periodically reviewed and updated as a result of operational, personnel, legislative and/ or management changes. A revised Safety and Operating Plan was issued in November 2005. Epic Energy also audit and monitor compliance with the Safety Management System at regular periodic intervals. 2.2 ENVIRONMENTAL MANAGEMENT Epic Energy’s Environmental Policy is shown in Appendix 3. The South Australian Petroleum Act 2000 and Regulations require that all regulated activities carried out under the Act must be covered by an approved Statement of Environmental Objectives (SEO) and Environmental Impact Report (EIR). In January 2006 an Environmental Impact Report (EIR) and a draft SEO were prepared to meet the regulatory requirements for the operation of the pipeline. The EIR provided: • A description of the pipeline and facilities • Described the specific features of the environment that can reasonably be

expected to be affected by pipeline operational activities • Proposes measures to mitigate potential environmental impacts and

consequences • Summarises stakeholder consultation • Identified potential environmental impacts and consequences

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The SEO was developed in conjunction with the EIR to outline the environmental objectives that Epic Energy is required to achieve and the criteria upon which the objectives are assessed. The objectives stated in the SEO were: • To minimise the environmental damage from the activities involved in the

construction or operation of transmission pipelines in transporting hydrocarbon products.

• To establish appropriate consultative processes involving people directly affected by regulated activities and the public generally

• To promote adherence to AS2885 as a primary means of achieving public, environmental and safety objectives

• To protect the public from risks inherent in regulated activities. The EIR has been approved and the SEO for PL 2 is in the final process of being approved. All operational activities on PL 2 are conducted in accordance with the SEO. 2.3 LANDOWNER LIAISON An integral part of Epic Energy’s Environmental Management and to ensure compliance is landowner liaison. There are a total of forty four landowner/residents with one hundred and twenty one parcels of land crossed by the Moomba – Port Bonython Liquids Pipeline. A property owner contact scheme is operated where each owner or occupier along the Liquids Pipeline is visited annually and in addition contacted by phone and or mail periodically. Other contacts, made by Field Maintenance Officers and Superintendents during the course of daily business, are recorded in the Land Management System (LMS). Land Management is supported by dedicated LMS software which is linked to a GIS system. All property details and notes relating to discussions or issues with the property owners are recorded in the LMS. All property owners are provided with pipeline safety awareness information, which contain the "Dial before You Dig" contact phone number and strongly reinforce safe working practices near high pressure pipelines. Public pipeline Safety Awareness Presentations for the Liquids Pipeline are held throughout the year. These presentations are provided to local Councils, contractors, utilities and emergency service providers. The focus of these presentations are on the specific nature and characteristics of the products carried by the Liquids Pipeline, the route of the pipeline, basic information about the pipeline and its monitoring, control and emergency procedures.

2.4 EMERGENCY RESPONSE Epic Energy maintains an emergency response capability designed to ensure that in

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the event of an emergency, Epic Energy: • minimises or eliminates any danger or risk to individuals, • minimises or eliminate any risk to the business, and • ensure that the pipeline system is returned efficiently to a safe, operational

state, with minimum customer and environmental impact. 2.4.1 EMERGENCY RESPONSE To ensure that the pipeline system is returned efficiently to a safe, operational state with minimum customer and environmental impact Epic Energy maintain a comprehensive team structure, equipment and services, that is available and tested regularly to fine tune it’s responsiveness to emergency events. To enable this, the Emergency Response Manual and the mapped business process of responding to breakdown and emergency are utilised. The Emergency Response Plans provide an Emergency Management Overview detailing the Epic Response Notification and the Emergency Management Team supplemented by the State response recovery plans. Epic Energy's Emergency Response follow a process based on Incident Command System that work towards the establishment and maintenance of a uniform, fully integrated, well coordinated, response effort. Its aim is to move the response from a reactive to a proactive mode of operation as quickly and efficiently as possible. By addressing the needs of an emergency as a project, the techniques and benefits of project management are utilised in achieving this aim. Epic review and test its preparedness to respond to an emergency as follows: • Two desk top exercises conducted annually (on pipelines including those

other than PL 2) • An emergency exercise conducted once every two years on PL 2 exclusively. 2.4.2 EMERGENCY RESPONSE DRILLS Emergency response procedures, equipment and materials are maintained to allow a prompt and effective response to any emergency situation, which may develop on the liquids pipeline. The procedures are regularly tested to provide training for involved personnel and as a check that the response plans and procedures ensure an effective response. Emergency exercises code named “Flinders and Hawker” were undertaken during 2006 and 2004 respectively and focused on testing the emergency field response to an incident and interaction with emergency services. A real emergency was declared in 2006 when a stem seal on MLV25 leaked

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discharging small amounts of product and prompting an emergency response. The root cause of the leak was failure/degradation of the seal due to age. The specific details of this failure including mitigation and prevention measures to prevent re-occurrence are discussed in the “Physical Assessment of Facilities” under the MLV section. The practice drills and their outcomes are reported separately to PIRSA. 2.5 MAINTENANCE PLAN Epic Energy’s Maintenance Plan is designed to provide timely, quality and cost-effective maintenance and technical guidance in support of the pipeline operation. The programme outlines Epic Energy’s maintenance organisation, detailing maintenance commitment, resource structure and work control philosophy. The maintenance programme outlines the maintenance to be performed on varying types of asset, detailing the frequency, duration, plant condition, type of maintenance action, rationale behind the activity to be undertaken and technical expertise required for the task. The resource structure details the types of resource available and the responsibilities in the maintenance organisation. The work control philosophy details the methodology on how the work is to be controlled. The maintenance plan is submitted to the Pipeline Licence owners and approved by them for implementation.

2.5.1 MAXIMO Maximo is the Computerised Maintenance Management System (CMMS) utilised to plan and implement the Maintenance Plan. This is a work management tool for planning, scheduling, executing, controlling and recording the maintenance work. 2.6 TRAINING Epic Energy’s strategy is to ensure all operations and maintenance staff is trained and competent in the tasks for which they are employed to carry out. Annual individual training programmes are developed for each employee from a skills/competency matrix to identify safety and technical training needs. Training and competencies programmes are monitored in monthly reports and measured against Key Performance Indicator ‘s (KPI’s). 2.7 INTEGRITY MANAGEMENT PLAN A draft Integrity Management Plan (IMP) has been prepared to identify monitoring, mitigation and inspection activities necessary to ensure safe, reliable and environmentally responsible operation of the pipeline and compliance with the requirements of AS2885 ( Attachment 1).

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The IMP was derived using Risk Based Inspection (RBI) techniques which provide the means by which hazard levels, as a result of a loss of integrity, are identified against the modes of degradation/ failure and the likelihood of such a failure mode occurring. Once the risk has been identified, the appropriate monitoring, mitigation and inspection methods and the frequency of application of these methods is determined. The specific aims of this process are to: • Identify the potential failure modes. • Evaluate the Hazard Level (consequence of failure) for each item. • Evaluate the Likelihood of each degradation mechanism. • Apply appropriate activities to monitor, mitigate and inspect degradation. • Determine the appropriate frequency of application of monitoring, mitigation

and inspection activities. The aim of the IMP is to maintain pipeline risk to “As Low As Reasonably Practicable (ALARP)” . The IMP will be audited in accordance with the Santos Environmental Health and Safety Management System (EHSMS). A major non conformance will include: • Failure to implement mitigation plans. • Failure to monitor or inspect. • Failure to assess the results. • Any activity which results in the execution of the IMP being materially

ineffective. This IMP is a draft; the activities presented in the IMP may be further optimised depending on business needs. A five year plan will document the phased implementation of the IMP and the required risk based activities. The IMP was developed by Santos and provided to Epic Energy for review and implementation in future. 3 RISK MANAGEMENT A detailed Risk Assessment of the pipeline was completed by Santos Ltd and Epic Energy in September 2001 in accordance with Australian Standard AS2885.1. The risk assessment included a Hazard and Operability Study ( HAZOP) of the above ground facilities. This risk assessment identified 23 credible threats. For these threats existing protection was determined to be adequate for the majority which were assessed as being ALARP. The remaining threats were then assessed and risk ranked. The Risk Assessment identified that the greatest threats to the integrity of the

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pipeline included: • External corrosion, • Dam building • Power pole boring • Trenching operations These were assessed as significant threats with the risk assessed ALARP. The HAZOP study did not identify any unacceptable threats, 30 follow up actions were identified. As per the requirements of AS2885.3 a five yearly review of this risk assessment was conducted in September 2006. This review included certain additional requirements of the draft AS2885.1. The review was conducted in the following manner: • Examine every metre of the pipeline starting at Moomba and working south

wards. • Review each previously identified threat in terms of whether the threat was

still applicable, whether the noted protection measures were still applicable and whether the risk associated with the threat was reduced by the protection measures to an acceptable level.

• Protection measures and risk evaluations updated directly into a graphical information system (GIS) database.

• Additional threats not previously noted were added to the GIS database together with the applicable protection measures and risk evaluation.

• Where additional information or assessment was identified as being required applicable actions were recorded. Each action was assigned a priority/ due date based on the criticality of the issue in question.

• Where the risk assessment could not be completed due to the need to obtain information then the item was tagged as pending in the GIS database.

• Where the risk is not reduced to acceptable by the protection and prevention measures in place, the risk is assessed as a hazardous event.

The scope of the risk review included all buried sections of the pipeline plus scraper stations and main line valves as they are integral to the integrity of the buried pipeline. The review of the risk assessment found that in most cases the protection measures in place reduced the risk of the identified threats to acceptable levels. The following threats were deemed hazardous events and were risk ranked: • Railway at location KP 503.6 • Railway at location KP 577.1 Several actions were recommended following the risk review, these included:

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• Conduct additional analyses to confirm the adequacy of standard designs with respect to power line faults to ground.

• Check depth of cover in selected locations. • Check cooling effect on pipeline material due to vaporisation of liquid if

backpressure is not maintained • Confirm landowner activities with selected landowners. These risks are mitigated by: • Liaison with landowners and other parties as determined in the location

specific threat analysis • Involvement in the Dial Before You Dig programme • Pipeline signage • Aerial and road patrols • A real time leak monitoring system which enables rapid response in the event

that damage is sustained • Operations and Maintenance procedures A review will be initiated during 2007 to address the issues of potential power line faults to ground and the effect on pipeline material due to vaporisation of liquid. As part of the risk assessment process Epic Energy plan to carry out a full Hazard and Operability (HAZOP) for the above ground facilities associated with the Pipeline, and has reviewed the 2001 HAZOP with little changes occurring to these sites since then. The Petroleum Regulations specifically refers to the risk the pipeline imposes on the following: • Public Health and Safety; • Environment; and • Security of Natural Gas Supply. 3.1 PUBLIC HEALTH AND SAFETY The pipeline route varies between broad rural landscape and National Park where land is largely undeveloped and sparsely populated and traverses some regional rural centres which are more densely populated. Epic Energy implements a Community Awareness Programme, which involves holding community awareness meetings with communities along the pipeline route. To cover the pipeline infrastructure that Epic Energy operates in South Australia including the Moomba to Port Bonython Liquids Pipeline, Epic target 30 meetings annually with CFS, MFS, Police, Ambulance, SES, councils, earth moving contractors, irrigation and fencing installation contractors. The presentations for the Moomba to Port Bonython pipeline focus on the general

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properties of the liquid hydrocarbon transported the process of liquid 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. Previous incidents that have occurred on the pipeline have included: • Pipeline exposure due to water movement • Pipeline exposure due to wind erosion • Pipeline exposure due to dam building • Minor leaks from valves • Threats to pipeline integrity due to activities by third parties (e.g. fencing

contractor and quarrying). To date no incident has resulted in any significant or long term impact to the environment or members of the public. The safe design of the pipeline, routine inspections and maintenance coupled with sound management practices reduces the risk to as low as reasonably possible. 3.2 THE ENVIRONMENT The risk imposed from operation of the pipeline on the environment is considered to be short term and minor in extent. These risks include: • disturbance to third party infrastructure, landholders or land use • soil erosion • maintenance of vegetation cover • spread of weed and disease • water and land contamination • disturbance to surface drainage • noise due to operation • potential for discharge from the pipeline • disturbance of cultural heritage sites and values These issues were subject to an assessment or audit according to the guidelines given in the SEO in 2006 to determine if satisfactory environmental management is achieved. One non conformance was noted relating to the leak at MLV 25. No significant long term adverse impacts are expected. The most significant contamination associated with the operation of the pipeline was land and ground water contamination associated with the burn pits at pump stations 2, 3 and 4. Liquid hydrocarbon released during maintenance and pigging activities were discharged to the burn pits and disposed of via burning. This practice no longer occurs, at pump stations 2 and 4 13500 litre fibre-glassed lined concrete liquid hydrocarbon collection tanks have been installed to capture any product that needs to be drained or vented during pigging operations or other maintenance

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activities that may be required. This liquid hydrocarbon waste is collected by a waste contractor. The installation of the underground concrete tanks has allowed the site burn pits at pump stations 2 and 4 to be remediated with the removal of contaminated soil and the pit backfilled. All equipment associated with the burn pits such as inlet piping, torch gas supply piping and the flame arrestor shields has been removed. A proposal to rehabilitate the burn pit at pump station 3 is currently being considered. 3.3 SECURITY OF NATURAL GAS SUPPLY An incident which results in the shutdown or significant restriction in throughput of the liquids pipeline has the potential to adversely impact the security of supply of natural gas. This adverse impact results from the inability to store large quantities of propane and butane at Moomba and hence the volume of natural gas that can be processed for supply to the SA market is reduced. In such circumstances it is possible to include as much of the propane and butane in the natural gas stream as gas specification will allow, and flare the remainder of the LPG. This would reduce the impact of security of supply of natural gas. It is recognised that this is not a desirable outcome but is more favourable than the other options. The systems and procedures used to manage maintenance work and third party activities, monitor pipeline condition, emergency systems and procedures are directed at eliminating or minimising the risk of a serious incident which may result in a shutdown of the pipeline. 4 PHYSICAL ASSESSMENT OF FACILITIES The Moomba to Port Bonython Pipeline is 24 years old and was designed and constructed to the standards and best practice principles at the time. During the time frame since the last fitness for purpose report was issued in 2002 the following physical assessment activities have been performed on the pipeline and facilities. 4.1 PIPELINE Routine maintenance of mainline valves, scraper station site major valves is performed six monthly, all pipeline pressure regulator and over pressure protection devices are tested in accordance with relevant Australian Standards and the maintenance schedule. Ancillary equipment such as pipe supports and pigging facilities are also routinely inspected. In addition to routine maintenance activities the following inspections were also performed:

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4.1.1 INTELLIGENT PIGGING SURVEYS An Inline Inspection (ILI) Survey conducted in July 2005 detected thirteen external defects with wall loss of 20 % and above. These and all other defects were evenly distributed over the circumference of the pipeline. The maximum measured wall thickness loss was 30%. The defect assessment conducted per AS2885 determined that all defects passed the fitness for service calculation for the pipeline MAOP. Details of the distribution of identified features are provided in Appendix 4. In January 2006 three of these defects were excavated at Kp 26.3, 198 and 320.99 for verification purposes. Two additional defects at Kp 340.4 and 378.4 were excavated in March 2007. Results from these excavations correlated with the ILI survey results. Each defect was refurbished and the excavations backfilled. The remaining eight defects identified by the ILI were metal loss milling features or manufacturing defects that have passed hydrotesting.

4.1.2 CLEANING PIG OPERATIONS AND INHIBITION The pipeline is pigged annually to remove water and sludge samples are tested for the presence of bacteria. Bacteria if present can cause severe internal corrosion and failure of the pipeline. Additional cleaning pig runs are scheduled if abnormal operations exist that may result in the build up of water in the pipeline. Additional cleaning runs were performed in 2004 following the Moomba LRP incident and following tank cleaning operations at the Moomba Plant. Additional cleaning runs using a slug of Bactron IK34 biocide are also performed if high bacteria counts are detected. A batch treatment with Cortron IR2449 corrosion inhibitor is carried out annually.

4.1.3 DIRECT CURRENT VOLTAGE GRADIENT (DCVG) SURVEYS Above ground coating defect surveys were carried out in December 2002 and November 2005. An inspection and dig up programme was conducted at nine locations along the pipeline in May and September 2004 following the DCVG survey in December 2002 (Appendix 5). Eight of the most significant defects were inspected during the programme. This work concluded that the coating performed well except in areas where the tape overlap was small and in some areas where rocks and boulders have damaged the coating. No major corrosion was detected and no sign of SCC was found on the pipeline. The November 2005 survey located fourteen medium size defects with IR > 15 % (Appendix 5). A refurbishment programme was completed in March 2007 to recoat ten of these coating defects; repair to the pipeline was not required. The remaining four defects will be refurbished during 2008.

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The results of the coating defects surveys, coating inspections and the magnitude of the protective current requirement of the pipeline indicate that the pipeline coating is in good condition and has performed satisfactory after approximately 20 years in service. 4.1.4 PIG LAUNCHERS AND RECEIVERS In December 2003 external visual and ultrasonic thickness non destructive testing (NDT) surveys were conducted on the four pig launchers and four receivers. Based on the examinations undertaken the vessels were considered to be in good condition at the time of inspections and suitable for continued operation subject to: • Recertification and replacement of pressure safety valves. • Confirmation that measured wall thickness values is consistent with the

design requirements. The report also recommended that two pig launchers and three pig receivers be cleaned and areas of corrosion be recoated. Recertification and replacement of pressure safety valves and the cleaning and painting of pig launchers and receivers occurs as part of the routine maintenance programme addressing the report recommendation. A review of design drawings has confirmed that measured wall thickness values are consistent with design requirements. 4.1.5 CATHODIC PROTECTION Performance of the pipeline cathodic protection system is checked as follows: • Two-monthly by checking the functionality of the cathodic rectifier units for

correct operation and output adjustments; and • Six-monthly by conducting ON/OFF potential surveys at all test points, to

determine the level of protection and to retune the pipe to the required CP criteria of -0.850 V to -1.175 V OFF potential versus copper/copper sulphate half cell.

The condition of the coating on a pipeline can be determined qualitatively from the protective current density of the pipe and quantitatively by applying techniques such as Direct Current Voltage Gradient (DCVG) Surveys. The protection current density of the pipeline is within 20 to 30 μ A / m 2 which is consistent with current requirements from previous years and indicates good performance of the pipeline coating. The pipeline cathodic potential profiles from 2002 to 2006 are provided in Appendix 6. The pipeline cathodic protection system has performed satisfactory and has provided the pipeline with adequate current to keep it within the criteria limits. The

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system has sufficient capacity for future requirements of increased current outputs, due to the aging of the pipeline coating. The following issues require further follow up: • At KP 0.0 the DCVG survey performed in 2004 showed a significant coating

defect. Inspection of this area showed two buried anodes bonded to each side of a buried monolithic joint. It was noted that the upstream section of the pipeline from the monolithic joint to the Moomba pig receiver had no cathodic protection. A scope of work has been prepared to repair this defect and implement suitable cathodic protection with work expected to be completed during the 2007.

• Downstream of KP 0.0 cathodic interference between the Liquids Pipeline, Moomba to Adelaide gas pipeline (MAP) and Santos gathering pipelines has been noted. It is planned to engage a Cathodic Protection Consultant during 2007 to resolve these issues.

• At pump station 3 the interference between the station earthing and pipeline cathodic protection system needs to be resolved.

• At Port Bonython the buried monolithic insulating joint needs to be excavated and inspected.

In 2007 the first two points are being addressed and it is proposed that the later 2 items will be completed in 2008. 4.2 PUMP STATIONS Pump Station 1 at Moomba delivers product into the pipeline at the required pressure and flow rate. This is achieved using steam turbine driven pumps (one duty, one standby). The pumps, metering facilities and pig launching equipment is operated and maintained by Santos Ltd. No major modifications have been carried out to this equipment in the past five years. The control system was modified in 2004 to interface the control system into a new Moomba Plant distributive control system. Routine six monthly valve maintenance is carried out, pig launchers and receivers are serviced and inspected annually. Pump Stations 2, 3 & 4 are essentially mainline block valve and scraper trap facilities. Routine six monthly valve maintenance is carried out on the valves with the pig traps serviced annually. Temperature relief valves are installed on the MLV bypass and the scraper traps and these devices are tested six monthly. These sites have SCADA pressure and temperature transmitters installed which are calibrated three monthly. Routine three monthly facility inspections are conducted as a part of the routine road patrol activity. At Pump Station 3 the pumping equipment originally installed has since been removed and the site is now non operational after being mothballed in 1990. The Control Room is not operational, no maintenance activities are carried out on the gas turbine powered pump units or any of the site ancillary equipment. There is no other plant or equipment at future pump stations 2 and 4.

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4.3 MAIN LINE VALVES Routine six monthly valve maintenance is carried out on all main line valves. In December 2003 external visual and ultrasonic thickness non destructive testing (NDT) surveys were conducted on seventeen mainline valve actuator pressure vessels. Based on the examinations undertaken the vessels were considered to be in good condition at the time of inspections and suitable for continued operation subject to: • Recertification and replacement of pressure safety valves. • Confirmation that measured wall thickness values is consistent with the

design requirements. The report also recommended that thirteen valve actuators be cleaned and areas of corrosion be recoated. The cleaning and painting of actuators occurs as part of the routine maintenance programme. The reference to pressure safety valves in the NDT report does not apply because pressure safety valves are not used on main line valve actuators. Drawings of the actuator pressure vessels are not available; however the manufacturer’s specifications state that these vessels are pressure tested to 14.9 Mpa with a maximum working pressure of 9.9 Mpa. No metal loss was detected during the thickness survey; these vessels are therefore considered to be fit for purpose. In October 2004 a “stain” from the MLV 24 bypass valve body was reported by Epic Energy personnel blasting and painting the MLV pipework. The valve body casting had an area of approximately 15mm of discoloration after blasting and an assumption was made that product was leaking via a body casting defect. The area of discoloration was in the neck of the valve body towards the downstream flange. The defect was above the two valve sealing seats, and isolated from the mainline with the valve in the closed position, effectively making the defect on the MLV bypass pipework above the MLV bypass valve. Non destructive testing on the defect area by magnetic particle inspection and ultrasonic inspections were carried out and no defects were detected. The results of the testing did not show any signs of cracking or internal defect. The stained area showed no signs of enlargement during this period. Three repair options were considered if the valve was determined to require a repair or be replaced. • Carbon Fibre Repair – the supplier believed that due to the shape and

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insufficient material this would not be the best option to complete this type of repair

• Epoxy filled Leak Seal Clamp - the supplier would not provide any engineering to support the valves integrity and so this option was rejected.

• Line stop, cut out and replace the defective valve. Santos advised their preference was to implement a monitoring inspection programme which was set up in the maintenance plan to wire brush the area and inspect for any leakage. This activity was set up in Maximo on a monthly frequency to the end on 2005 and extended to three monthly to coincide with the routine pipeline surveillance. During this period there have been no leaks detected and no changes to the discoloration of the valve body casting. This inspection programme will continue to be included into the Maximo Maintenance Plan and inspection records kept in the central filing system. In April/ May 2006 the stem seal packing of MLV25 failed resulting in the release of a minor amount of product in the form of a mist at the Port Bonython site. The pipeline flow was by-passed through the pig receiver allowing the valve to be closed, the valve cavity blown down to the Port Bonython drain system and packing replaced. An ongoing programme has been developed to inspect and replace the stem seal packing on all other main line valves over the coming 5 Years. Three valves have been planned for 2007. This is considered to be a proactive measure. All other mechanical and ancillary equipment is considered to be in good condition. 4.4 COMMUNICATIONS FACILITIES Routine maintenance tasks that occur at the communications facilities consist of the following: • Radio tower three yearly routine maintenance inspections. This work

involves a physical inspection of the radio tower structure including all ancillary equipment such as antennas, tower cabling, cable trays, mast lighting and corrosion issues.

• Guy rope tensioning to ensure the tower ropes are tensioned as per the original design specification and to correct any misalignment that may have occurred over time.

• Micro wave, VHF & UHF radio system performance checks • Electrical checks at the site radio hut facilities • Uninterruptible power supply system inspections and checks including battery

maintenance. As a result of routine maintenance activities corrective maintenance issues are identified and rectified on an as needs basis. Corrective maintenance issues that have been addressed or are scheduled to be addressed in 2007: • Replace of antennas and their associated feed horns • Painting of one tower

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• Guy rope replacement for one tower

4.5 CHEMICAL INJECTION AND CORROSION MONITORING FACILITY There is continuous injection of Bactron SK4465 biocide/corrosion inhibitor into the pipeline upstream of the meter station at Moomba. The target injection rate is 5 litres/day which is checked on a weekly basis to maintain a target biocide/corrosion inhibitor concentration of 200 ppm in the produced water. These checks include checking the “as found” and “as left” injection rate, tank levels and pump operability. The analysis of water and sludge samples from the pipeline pig receivers by serial dilution according to NACE Standard TM0194 -94 have shown the presence of moderate to high levels of bacteria confirming the importance of pipe cleaning operations to prevent contamination of the pipeline.

4.6 RIGHT OF WAY 4.6.1 SIGNAGE An ongoing programme has been developed to upgrade the signage along the entire length of the Pipeline to 500 metre spacing to comply with AS 2885. Routine maintenance will ensure the signs are maintained to the required standard. All compounds are clearly identified with signage indicating what the facility is and who to contact in the event of an emergency. 4.6.2 MAINLINE VALVE COMPOUNDS Routine maintenance is carried out on MLV compound fences and gates as part of the ROW patrols with corrective actions followed up as required. 4.6.3 WEED CONTROL Weed identification and control is performed as part of ROW patrols. 4.6.4 AERIAL SURVEILLANCE Aerial patrols are conducted quarterly between Port Bonython and Pump Station 3. Given the proximity to the main pipeline access road north of Pump Station 3 and the remoteness of the region, road patrols are considered sufficient in this section. 4.6.5 ROAD PATROLS Road patrols are conducted three monthly and after heavy rains. Being much closer to the asset, the road patrol is usually the most efficient in identifying anomalies, such as wash outs. North of Pump Station 3, the Right of Way servicing the Moomba Adelaide Pipeline (MAP) gas pipeline travels parallel to the Liquids Pipeline and anomalies are identified during normal travel along the pipelines, as

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well as during the dedicated road patrols. This is considered an effective means of monitoring the easement. From Pump Station 3 to Port Bonython, the pipeline passes through the Flinders Ranges and pastoral land and road access is more difficult for Epic Energy and the general public. Given the restricted access, three monthly road patrols through this area are considered sufficient.

Road maintenance is performed as required in areas where the ROW is used as the pipeline access track. 4.6.6 PIPELINE LOCATION SERVICE Epic Energy subscribes to the Dial-Before-You-Dig programme and offer a free pipeline location service. The remoteness of this pipeline results in a limited number of applications for this service. Cooperation with the community has been excellent in this matter. 4.6.7 LANDHOLDER CONTACT PROGRAMME Every twelve months all property owners and local bodies, such as Councils and emergency services along the pipeline are visited as part of a contact scheme. The scheme is intended to remind and keep property owners abreast of the potential hazards associated with high pressure pipelines and the rules and obligations associated with landowner activity in the vicinity of the pipeline. 4.6.8 WASH OUTS Washouts are identified through routine patrols and site visits for maintenance. Repairs are carried out at the first opportunity after the wash outs are identified. The Pipeline has not been exposed at any time due to wash outs. 5 EFFECTIVENESS OF MANAGEMENT SYSTEMS

5.1 AUDITS AND REPORTS

5.1.1 OPERATIONS AND MAINTENANCE AUDIT During November and December 2003 an Operations and Maintenance Audit was conducted, key finding from this audit included: • Epic Energy has a robust set of operating procedures for the conduct of

operations, maintenance, monitoring and provision of engineering services for the pipeline. Epic Energy aims to operate in accordance with AS2885.3 guidelines and in general has met the intent of the standard.

• A number of higher level plans and associated documentation required by the standard do not currently exist. However, the audit team did note the intention to address this issue for some documents, notably the Safety and Operating

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Plan. Some of the existing plans and procedures were outdated or not formally approved.

• The absence of the required documentation prevents Epic Energy from complying with the minimum requirements specified by AS2885.3. To assist in rectifying the discovered non-compliances, thirteen Corrective Action Requests (CARs) were raised. The CARs range from the broad reaching requirement for a specific Safety and Operating Plan and other middle level maintenance documentation to non-compliances of work instructions. Five of the CARs were assessed as having potential implications for personnel health and safety or the operation of the pipeline.

The key recommendations from this audit were: • While the majority of the discovered non-compliances referred to the lack of

documentation or the management of records, a number of technical non-compliances were discovered that contravene the standard. If an accident were to occur and the subsequent investigation specified that activities in breach of the standard were contributing factors, then the operator and licensee may be held to account. It would be in the best interest of Santos and Epic to address these issues promptly. Corrective Action Requests assessed as immediate priority have potential implications for personnel health and safety or the operation of the pipeline and should be addressed as soon as practicable. Corrective Action Requests assessed as medium priority should be addressed as in timeframe mutually agreed by Santos and Epic.

The Corrective Action Requests (CARs) raised as a result of the audit, priority and action taken are detailed in table 2 below:

Table 2 – Operations and Maintenance Audit Corrective Actions CAR No CAR Title Priority Status 01 Safety and Operating Plan Medium Completed 2005 02 Review Intervals for Procedures Medium Completed 2005 03 Foreign Crossing Approval Immediate Completed 2005 04 Excavation Near Pipeline Immediate Completed 2004 05 Operating and Maintenance Repair

Procedures Medium Completed 2005

06 Personnel Experience and Qualifications Requirement

Medium Completed 2004

07 Approved Measuring Equipment for Corrosion Protection Assessment

Medium Completed 2004

08 Frequency of Inspection Assessment Medium Completed 2004 09 Coating Repair Procedures Medium Completed 2005

Coating procedure exists for current repair programme

10 Welding onto an In-Service Pipeline Immediate Completed 2004 11 Hot Tapping Procedure Immediate Completed 2004

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12 Job Hazard Checklist Immediate Completed 2004 13 Records Management Plan Medium Completed 2005 The actions arising from the Operations and Maintenance audit have been addressed with the exception of the procedure for coating repair. This procedure will be revised to include all coating systems used on the MAPS. A revised Safety and Operating Plan was issued in November 2005. 5.1.2 COMPLIANCE AUDIT In May 2006 an internal AS2885.3 compliance audit was conducted. This audit was conducted to ensure Epic Energy’s management systems, procedures and records complied with the requirements of AS2885.3 and the resulting actions from the 2003 Operations and Maintenance audit discussed in section 6.1.1 above. The audit confirmed Epic Energy has satisfactory operating procedures to operate and maintain the pipeline but noted that improvement was required in the review and updating of working documentation. The opportunities for improvement arising from the audit and current actions are summarised in table 3 below:

Table 3 –Actions Arising from Compliance Audit

Actions Arising Observation Completion Date Status 1 Develop an Integrity

Management Plan 2006 Draft Completed

2 Update Emergency Response Manual

2007 Completed

3 Review and Update 14 Maintenance Work Instructions

2007 Completed

4 Add work instructions to the Intranet Data Base

2004 Completed

5 Review and approve TSCC operating procedures

Not completed Complete by year end 2007

6 Procedure for draining product from pipeline to be included in Emergency Plan


7 Review training Competency Plan

2006 Completed

8 Coating repair procedure required

Partially Complete

Procedure to be revised to include all coating systems by year end 2007

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9 Procedure for installation and commissioning of CP ground beds


10 Document in Maximo exchange of pig trap relief valves

2005 Completed

11 Modify work instructions for exchange of pig trap relief valves

2007 Completed

12 Ensure decommissioned pump station meets hazardous area compliance

2005 Report and recommendations forwarded to Santos. Site decommissioned.

13 No approved work instruction for pig trap maintenance


14 Records required for earthing system inspection and testing


15 Relocate weld procedures to Dry Creek library

2004 Completed

There are six opportunities for improvement arsing from the compliance audit which are currently being addressed by Epic Energy. 5.1.3 SAFETY MANAGEMENT SYSTEM AUDIT An internal audit of Epic Energy’s safety management system is conducted on an annual basis. Results of the audit are circulated to senior management for delegation of the close out actions. The status of action items is checked for completion on a regular basis prior to the commencement of the following year’s audit. There are no outstanding issues related to the Liquids Pipeline requiring follow up.

5.1.4 ENVIRONMENTAL AUDIT An audit against the Assessment of Declared objectives in the SEO was completed in 2006. Epic complied with all but one of these objectives; the non conformance related to the stem seal leak at MLV25 and as previously mentioned a plan is in place to remediate these valves. 5.1.5 WATER HOLD UP STUDY In June 2006 a fluid modelling study was conducted to estimate the water hold up profile along the pipeline route in order to estimate the threat from internal corrosion.

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The following conclusions were made from the study: • Bacteria have been reported as being present in the pipeline in significant

concentrations • Conditions exist within the pipeline that is generally conducive to the

existence of bacteria that are likely to lead to Microbiologically Influenced Corrosion (MIC) damage to the pipeline.

• There is no evidence of MIC damage from the 2005 ILI survey results along the complete pipeline route.

• There is another factor involved in the MIC threat that is not evident from the available data that is preventing the relatively high bacteria concentration from causing MIC damage to the pipeline.

• The integrity of the pipeline is generally in good condition. The following recommendations were made to identify MIC activity: • Water sampling and testing be conducted to establish whether there is

any carry over biocide present from upstream operations. • Water sampling and analysis be conducted to establish what nutrients exist in

the pipeline to promote MIC activity. • MIC analysis of pig receiver samples be conducted. Actions resulting from this study are currently being followed up in accordance with the requirements of the draft Integrity Management Plan. 5.1.6 LEAK VOLUME STUDY In May 2006 a leak volume analysis was conducted to estimate the consequence of a pipeline failure along the pipeline route. There are 25 Mainline Line Valves of which 17 can be remotely actuated for shutdown and isolation purposes. The following conclusions were made from the analysis: • With the existing pipeline design a pipeline rupture would cause some

environmental damage; however it would be manageable. The existing design could be described as the ALARP because any additional automation would not, on average, reduce leak volumes significantly.

• If any additional automation was to be implemented then the following MLVs, could be considered, in order of priority to reduce leak volumes – MLV 12, MLV 11, MLV 9 and MLV 2.

In view of the conclusions reached from this study no further action is currently being considered to increase the number of MLV’s which can be automatically automated. The need for additional automation will be reviewed as operating conditions of the pipeline require.

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5.1.7 2005 INTELLIGENT PIG SURVEY REVIEW In June 2006 a review was conducted of the 2005 ILI results. The following conclusions were made from the review: • From the analysis of the internal feature locations there is little evidence of

any internal corrosion mechanism at work. Although high bacteria counts have been noted in the pipeline it is possible that there is not enough nutrients for the bacteria to be active or that water in the pipeline has limited contact with the pipe wall.

• The external features reported may be original construction defects or possibly coating defects that occurred during backfill of the pipeline.

• There appears to be no significant deterioration from comparisons between the 1998 and 2005 ILI surveys. However the differences in tool accuracy between the two surveys make the usefulness of this comparison limited.

• Calculated corrosion rates are similar to those seen on other pipelines in this type of terrain.

• There were no features close to failing the AS2885.3 fitness for purpose criteria.

The following recommendations were made: • Direct Current Voltage Gradient (DCVG) and Closed Internal Potential (CIPS)

surveys are carried out in areas where there is an accumulation of external features. This data will help to establish if the reported features are construction features or features caused by damage to the coating. Based upon this data it is recommended to conduct a limited number of digs annually to investigate the reported features and conduct repairs to the pipe or coating as required.

As discussed previously, a DCVG survey has been conducted on the pipeline in 2005 and defects have been excavated, verified and repaired accordingly. 6 IMPACT OF THE ENVIRONMENT ON THE PIPELINE The pipeline crosses a range of different landforms and land uses and is divided into the following regions: Region Approximate Kp Facilities Impact on Pipeline Channel Country Kp 0.0 -27 Pump Station 1 Periodic flooding. Pastoral

land for organic beef - chemical free

Dunefields Kp 27 - 162 Pump Station 2 (future site)

Periodic flooding. Pastoral land for organic beef - chemical free

Stony Plains Kp 162 -215 Kp 234 - 314

Habitat for important arid zone plants and animals

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Flinders Lofty Block

Kp 215 - 234 Pump Station 3 Habitat for important arid zone plants and animals

Flooding presents the greatest risk from the environment to the integrity and operation of the pipeline. There are approximately twenty two watercourse crossings along the pipeline route, issues relating to erosion and pipeline exposure have occurred at six locations. Remedial action has been implemented at these locations to minimise the potential for further exposure and minimise the risk to the integrity of the pipeline. Depending on the severity of the incident the emergency response and maintenance systems provide effective response to these situations. Trees are not permitted to grow on the ROW within 2 metres of the pipeline. Other vegetation on the ROW is controlled to ensure that the line of sight for pipeline markers is maintained.

7 POTENTIAL FOR SERIOUS INCIDENTS A leak in the pipeline would result in the release of gas and liquid hydrocarbon. The rate of release would be dependent on the size of the failure. Fire could result if a source of ignition was present. The quantity of hydrocarbon lost and the risk to safety and the environment would depend on the time taken to detect, isolate and repair the pipeline. The risk to the public safety would depend on the location of the failure and proximity to the public. Epic Energy have conducted a pipeline integrity risk assessment in accordance with AS2885; while it is recognized that there are risks associated with the operations and maintenance of a high pressure liquids hydrocarbon pipeline Epic Energy believes all of these risks have been identified and steps taken to ensure that in all cases these risks have been reduced such that they can be considered to be “As Low As is Reasonably Practical” (ALARP”). Given this fact the potential for a serious incident to occur has been minimized. 8 PIPELINE UTILITIES The pipeline utilities consists of two off steam turbine powered pump units (one duty and one standby) located at the Moomba processing plant Pump Station 1 facility. Given that the pumps are in a duty standby arrangement the reliability of the system to deliver product into the pipeline can be considered to be 100%. 9 FITNESS FOR PURPOSE 9.1 GROUNDS FOR FITNESS FOR PURPOSE This pipeline is being operated and maintained by Epic Energy, an experienced Australian pipeline owner and operator. The management systems employed by

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Epic Energy in the operation and maintenance of the Liquids Pipeline are robust and regularly audited. Risk Assessment’s in accordance with AS2885 have confirmed that there are no threats to the pipeline, which are not being managed appropriately, and the asset poses an acceptable risk to public health, safety and the environment. The corrective actions issued during the Operations and Maintenance audit in 2003 have been addressed. A compliance audit conducted in May 2006 concluded that Epic Energy needed to improve some documentation but in general the intention of AS2885.3 had been met and Epic compiled with this standard. This compliance audit identified fifteen opportunities for improvement which have been completed or are currently being addressed. Epic Energy has a structured process in place for recruitment and training of employees, which ensures personnel involved in the operation and maintenance of the Pipeline are competent and have appropriate levels of experience. Emergency response exercises are conducted to test the emergency response capability; identified improvements are subsequently incorporated. The entire length of the pipeline was internally inspected by ILI in 2005. Results from this survey plus defect verification excavations confirmed that the pipeline is in satisfactory condition. Above ground coating surveys, coating inspections during excavations and analysis of sludge samples collected during pigging operations for bacteria analysis support the results of the ILI survey. The mainline valves and pig launchers and receivers were inspected in 2003. Based on the examinations undertaken the vessels were considered to be in good condition at the time of inspections. The actions identified during the inspections have been addressed. The actions arising from the leaks at MLV 24, MLV 25 and cathodic protection surveys are being followed up in a satisfactory manner. Further improvements to the microwave communications and SCADA systems planned for 2007 will improve the reliability of the systems and hence the ability to accurately monitor and control the Liquids Pipeline. 9.2 FITNESS FOR PURPOSE FOLLOW UP The following activities have been identified and are currently being followed up: • Prepare five year integrity management plan • Investigate and remediate earthing issues and interference with the cathodic

protection system at pump stations 2, 3, 4 and MLV14, 16, 18, 21, 22, 23, 24.

• Rectify the coating defect and cathodic protection issue at KP 0.0 • Implement the actions arising from MLV25 leak. • Continue to monitor bacteria counts for each section in conjunction with

pipeline cleaning pig operations. • Conduct water sampling and analysis to establish what nutrients exist in the

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pipeline to promote MIC activity. • Conduct water sampling and testing to establish if there is any carry over

biocide present from the biocide injection facility located at Pump Station 1. • Conduct DCVG survey 2008/9 in accordance with the draft IMP Plan • Conduct ILI 2010 in accordance with the Integrity Management Plan. • Rehabilitate the burn pit at pump station 3. • Isolate pump station 3 hazardous area equipment • Investigate and correct (if required) cathodic protection interference

issues between the Liquids Pipeline, MAP and Santos gathering pipelines downstream of KP 0.0

• Excavate the buried monolithic joint at the pipeline inlet to the Port Bonython Plant and correct any issues found.

10 CONCLUSIONS Based on the information Precented in this document it is concluded that the Fitness for Purpose of “The Liquids Pipeline” is appropriate to manage the risks imposed by the pipeline on: • The Environment • Public Health and Safety • The Security of Production or Supply of Natural Gas This report identifies a number of actions that should be followed up to ensure that the pipeline remains fit for purpose. Should the operational circumstances surrounding the pipeline change within the five year period, the Fitness for Purpose Report will be reviewed to determine whether any operational adjustment is required. The Pipeline is assessed as being in good condition and fit-for-purpose for current and future use. Over the period of the next five years a subsequent Fitness for Purpose Report is required under the Petroleum Act 2000 and Regulations. 11 APPENDICES

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APPENDIX 1

FACILITY DESCRIPTION

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MOOMBA • PUMP STATION 1 Pump Station 1 at Moomba delivers product into the Liquids Pipeline at the required pressure and flow rate. This is achieved using steam turbine driven pumps (one duty and one standby). The pumps, metering facilities and pig launching apparatus at Moomba are operated and maintained by Santos. Specific details of the pumping equipment are: Steam turbines: Type: SSA 8 Rated output: 1485 kW Rated speed: 4850 rpm Max running speed: 5075 rpm Over speed trip: 5329 rpm Pumps: Type: Horizontal DVMX No of stages: 7 Design capacity: 73.6 L/S Design head: 1209 m Design speed: 4,450 RPM Form of drive: Direct coupled to steam turbine Santos P&ID drawings 5500-10-003 and 5500-10-004 apply.

• METER STATION To accurately measure the quantity of product being delivered into the pipeline, three meter runs are installed at Moomba. Densitometers and flow computers are installed to enhance overall accuracy of measurement. Specific details of the metering equipment are:

• 3 off meter runs with Smith Turbine meters: • Max flow per meter run: 76 l/s • Min flow per meter run: 7 l/s • 1 off 12 inch Smith bi-directional pipe meter prover, used to calibrate

any of the three turbine meters. • Twin parallel Solartron densitometers. • 3 off flow computers providing the following functions: • Computation of volumetric flow at operating temperature and pressure • Computation of density at operating temperature and pressure • Computation of mass flow from the above flow and density • Input into Epic Energy pipeline leak detection system • Control of meter proving

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• PIG LAUNCHER A single scraper barrel launcher assembly is installed in the Moomba pump station facility. The scraper barrel is 4m long and 450 NB, which is 100mm larger than the mainline pipe diameter. A conical reducer connects the barrel to a 600mm long 350 NB pipe spool and the scraper trap/pipeline isolation block valve (350mm Adamson Chronister). The scraper trap is suitable for launching 350mm cleaning, batching, geometry, spheres and intelligent type pigs. It is equipped with a quick opening, horizontally hinged, swing closure, with safety interlock (Unibolt Closure).

Kicker and launcher bypass connections are 150NB to accommodate the entire pipeline flow without significant throttling effect. A 100mm drain connection is installed near the end of the trap. A closed pipe system is connected to a 15,000 litre below ground containment tank. Equaliser lines of 50mm NB, with connections at both ends of the trap, are provided. Vent and/or purge connections of 25mm NB are provided on top of the scraper barrel, to allow venting to the closed drain system and purging with natural gas or nitrogen. There is an over pressurisation mechanical device fitted to the scraper.

• CHEMICAL INJECTION FACILITY The corrosion inhibitor / biocide injection system is skid mounted and consists of one positive displacement Williams pump and a 1000 litre storage tank. The inhibitor is injected upstream of the meter station.

FUTURE PUMP STATION 2

Provision was made in the initial pipeline design for PS2 and includes the following facilities:

• Mainline Block Valve No 7 with remotely controlled Shafer Actuator and

an above ground 150mm NB by-pass. • Pig launcher and receiver facilities. • A 100mm NB closed drain system connects the pig launcher and

receiver to a 13500 liquids hydrocarbon collection tank. • Station inlet and outlet valves (300mm NB Adamson & Chronister slab

gate through conduit) with manual geared operators. Pump Station 2 facilities (pumps, drivers etc) have never been installed. The PS2 site serves as a scraper station for pigging activities.

• PIG LAUNCHER / RECEIVER One each Scraper receiver and launcher are installed. These are units of the same type and size to that installed at PS 1.

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A 100mm NB drain connection is installed near the end of the traps, to take remaining product through a closed pipe system to a liquids hydrocarbon collection tank.

PUMP STATION 3 The Liquids pipeline passes through PS3 and includes the following facilities:

• Mainline Block Valve No 13 with remotely controlled Shafer Actuator and an above ground 150mm NB by-pass.

• Pig launcher and receiver facilities. • A 100mm NB closed drain system connecting the scraper traps with a

below ground 15,000lts containment tank. • A fenced decommissioned disposal pit. • Station inlet and outlet valves (300mm NB Adamson & Chronister slab

gate through conduit) with decommissioned Shafer Actuators.

• PIG LAUNCHER/RECEIVER The pig launching and receiving facilities at Pump Station 3 are identical to those at PS 1 and future Pump Station 2.

• PUMPS (DECOMMISSIONED) Pump Station No 3 was operated between 1983 and 1990. The facility was then mothballed. The two 2400kW turbines that powered the Byron Jackson pumps were removed by Santos for sale. Both suction and discharge valves are closed and isolated from power gas. Pipework has been positively isolated on suction and discharge sides of both pumps by the installation of spectacle blinds. Fuel and power gas provided from Epic Energy’s MLV13 has been isolated and blinded from this site. The remaining pump facilities are in a mothballed state.

FUTURE PUMP STATION 4 The Liquids pipeline passes through the provision for PS4 and includes the following facilities:

• Mainline Block Valve No 19 with remotely controlled Shafer Actuator and an above ground 150mm NB by-pass.

• Pig launcher and receiver facilities. • A 100mm NB closed drain system connects the pig launcher and

receiver to a 13500 liquids hydrocarbon collection tank. • Station inlet and outlet valves (300mm NB Adamson & Chronister slab

gate through conduit) with manual geared operators.

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As with PS 2, PS 4 was never installed and currently serves as a scraper station for pigging activities. • PIG LAUNCHER/RECEIVER Pump Station 4 was never installed as the pipeline rates were able to be managed by the installed facilities at PS1 and PS3. Consequently, the PS4 site serves as a scraper station for pigging activities.

PORT BONYTHON • METER STATION To accurately measure the quantity of product being delivered from the pipeline, three meter runs are installed at Port Bonython. Densitometers and flow computers are also installed to enhance overall accuracy of measurement. This metering equipment is the same as installed at Moomba. • PIG RECEIVER A single scraper receiver assembly is installed in the Port Bonython processing terminal. The scraper barrel is 4m long and 450mm NB, which is 100mm larger than the mainline pipe diameter. A conical reducer connects the barrel to a 600mm long, 350mm NB pipe spool and the scraper trap/pipeline isolation block valve (350mm Adamson Chronister). The scraper trap is suitable for receiving 350mm cleaning, batching, geometry, spheres and intelligent type pigs. The Scraper trap is equipped with a quick opening, horizontally hinged, swing closure with safety interlock (Unibolt Closure). Kicker and launcher bypass connections are 150mm NB to accommodate the entire pipeline flow without significant throttling effect. A 100mm drain connection is installed near the end of the trap. A closed pipe system is connected to a 15,000 litre below ground containment tank. Equaliser lines of 50mm NB, with both connections at both ends of the trap, are provided. Vent and or purge connections of 25mm NB are provided on top of the scraper barrel, to allow venting to the closed drain system and purging with natural gas or nitrogen. There is an over pressurisation mechanical device fitted to the scraper.

MAIN LINE VALVES • ACTUATED There are 17 actuated mainline block valves between Moomba and Port Bonython, which are remotely operated with pneumatic–hydraulic Shafer actuators powered by either nitrogen or natural gas. The valves are Adamson & Chronister valves welded through conduit, full bore, double block and bleed,

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slab gate valves. All valves with the exception of MLV1 and MLV 25 are a below ground installation with a 150mm NB bypass, incorporating two 150mm NB ball valves and 100mm NB flange connections. The bypass pipe work is fitted with a Pressure Relief Valve to accommodate product expansion if exposed to high temperatures. • NON ACTUATED There are 8 non-actuated mainline block valves located between Moomba and PS3. The valves are Adamson & Chronister valves welded through conduit, full bore, double block and bleed, slab gate valves. All valves are a below ground installation with a 150mm NB bypass, incorporating two 150mm NB ball valves and 100mm NB flange connections. The bypass pipe work is fitted with a Pressure Relief Valve to accommodate product expansion if exposed to high temperatures. Mainline block valves from Moomba to PS3 are located adjacent to the mainline valves of Epic Energy’s 558mm NB Moomba to Adelaide natural gas Pipeline.

ROW Access to the pipeline facilities between Moomba and Pump Station 3 is generally via the Right of Way servicing the Moomba to Adelaide gas Pipeline. From Pump Station 3 to Port Bonython, access is generally via tracks across pastoral leases or private land. These tracks are generally covered by underleases, which provide access rights to maintain and repair facilities. Access tracks are gated and secured by lock and chain. Maintenance of access roads has generally been confined to the repair of water erosion damage, following periods of unusually heavy rainfall.

SWER LINES A Santos owned, 19kV SWER line runs parallel to the liquids line for 49.8 km from Compressor Station 4 to Martins Well. This incorporates MLV14 and MLV15. This line provides power to the MLVs, a CP TRU site and the Martins Well homestead. The capacity of the line is limited by the supply generation and the line is fused at 2 Amps. Average load is 5kVA.

PIPELINE MONITORING SYSTEMS • SCADA SYSTEM Epic Energy operates and controls the Moomba to Port Bonython Liquids Pipeline for the South Australian Cooper Basin Joint Venture from the Transportation Services Control Centre (TSCC) in Melbourne, Victoria, using the Epic Energy Telvent 5.2.2 OASys SCADAS System. The Liquids Pipeline

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can also be monitored and controlled from Epic Energy’s emergency backup control centre in Dry Creek, South Australia. The Telvent OASys 5.2.2 SCADA incorporates the Santos SSI Liquids modelling and leak detection system. Epic Energy is currently undergoing an upgrade of it Control Room SCADA system including hardware and software. The software will be upgraded to Telvent DNA and this project is due for completion in 2007. The Epic Energy SCADA system is a distributed, dual redundant, SCADA system which utilises Epic Energy and Santos communications infrastructures to communicate to Fisher ROC RTUs for the monitoring and control of the Liquids Pipeline. Liquids Line facilities at Moomba and Port Bonython, plus 17 of 25 MLV sites are monitored and controlled by the SCADA system. From MLV 13 at pump station 3 all valves can be remotely operated.

Epic Energy has determined it necessary to replace or upgrade their current SCADA system. The SCADA system will be replaced in July 2007 with a Telvent OASys DNA system. • LEAK DETECTION SYSTEM The Epic Energy Transportation Services Control Centre (TSCC) located in Melbourne operates a SCADA system that continuously monitors the 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 and 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 25 valves, isolating sections of the pipeline to minimize any leakage should the need arise.

COMMUNICATION SYSTEMS • COMMUNICATIONS FACILITIES Communication links between the MLV RTUs and the TSCC consist of Epic Energy owned and leased infrastructure as well as Santos owned infrastructure. The Santos infrastructure, which consists of a microwave bearer and multiplexer, originates at Port Bonython and terminates at Moomba. This equipment provides the backbone of the transmission path. Small scale spur radios provide the transmission path to the main line valve sites that are not adjacent to the backbone. The Epic Energy owned or leased infrastructure provide the transmission path from Port Bonython to Adelaide and then through to the Melbourne TSCC. Epic Energy also owns the Cisco routers, which provide the switching in

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Adelaide and Melbourne. There is a digital microwave system installed along the length of the pipeline, consisting of masts ranging from 40m through to 107m in height and equipment shelters, which contain battery systems and radio bearer equipment. There are ten remote UHF repeater sites and seven leased line sites, which service the Liquids Pipeline SCADA, to Fisher ROC RTUs. Power to all sites is provided by SWER line, with the exception of 5 sites (Repeater sites at KP115, 209 and 306, as well as remote Liquids Line MLVs 16 and 17). Mobile communications is maintained by a semi-cellular radio network that provides for communications with TSCC from anywhere along the pipeline. This consists of microwave site VHF base stations and Epic Energy vehicle mobile VHF radios.

• SITE SECURITY All communications repeater station sites have entry alarms fitted to the outer and inner building doors. These are alarmed back to TSCC, which is monitored 24 hours a day. The external and internal doors are locked in accordance with Epic Energy’s internal security locking system.

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APPENDIX 2

EPIC ENERGY HEALTH AND SAFETY POLICY

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APPENDIX 3

EPIC ENERGY ENVIRONMENTAL POLICY

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APPENDIX 4

2005 INTELLIGENT PIG SUMMARY SURVEY RESULTS

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Log Distance

Kp (km)

Type of Defect Length (mm)

Depth (%)

ERF Internal Comment

Section 1 19.34 0 Metal loss corrosion 26 13 0.92 Yes Close to GW

19.42 0 Metal loss corrosion 28 10 0.92 Yes Close to GW

19344.86 19.3 Metal loss corrosion 15 11 0.91 Yes

25609.47 25.6 Metal loss corrosion 17 15 0.91 Yes Further minor indications



26316.1 26.91 Metal loss corrosion 13 20 0.91 No Pipeline recoated


74632.42 75.60 Metal loss milling 39 20 n/a


Section 2 28644.65 189.79 Metal loss milling 9 27 n/a 34534.36 197.95 Metal loss corrosion 14 25 0.91 No Pipeline recoated



174538.97 340.39 Metal loss corrosion 46 24 0.95 No Pipeline recoated Section 3


40566.18 393.80 Metal loss construction

38 20 n/a

Section 4





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APPENDIX 5

2004 AND 2005 DCVG COATING SURVEY RESULTS

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Date Dig Kp %IR Drop Results 2004 1 0.000 56 Buried monolithic insulation joint and CP anode 2004 2 68.520 22 Coating Defect (recoated) 2004 3 209.128 23 Coating Defect (recoated) 2004 4 418.782 32 Coating Defect (recoated) 2004 5 423.860 16 Coating Defect (recoated) 2004 6 423.877 38 Coating Defect (recoated) 2004 7 423.923 15 Coating Defect (recoated) 2004 8 455.087 21 Coating Defect (recoated) 2004 9 584.474 31 Buried monolithic insulation joint and CP anode 2005 1 161.500 15.6 Pig Signal US of PS2 (2m of re-coat) 2005 2 162.000 62.5 Valve 17 in PS2 (1m of re-coat) 2005 3 162.000 46.9 Valve 22 in PS2 (1m of re-coat) 2005 4 162.000 39.8 4" Drain Line in PS2 (10m re-coated) 2005 5 162.000 37.0 Valve 3 at PS2 (Re-coated) 2005 6 256.000 69.6 Elec. Boxes at MLV 10 (Re-coated all of MLV 10) 2005 7 256.000 23.5 MLV 10 (Re-coated all of MLV 10) 2005 8 277.000 17.0 On Mainline (3m re-coated) 2005 9 352.500 53.7 4" drain line at PS3 (1m re-coat) 2005 10 353.000 24.0 On 6" kicker line at PS3 (4m re-coat) 2005 11 407.600 21.8 work schedule 2008 2005 12 409.700 16.7 work schedule 2008 2005 13 436.980 21.9 work schedule 2008 2005 14 455.110 19.6 work schedule 2008

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APPENDIX 6

CATHODIC PROTECTION POTENTIAL PROFILES

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Moomba to Port Bonython Liquids PipelineOFF Potential vs. KP (Full Line Surveys)

Date Between 1/1/02 To 31/12/06

0

200

400

600

800

1000

1200

1400

1600

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2000

0 100 200 300 400 500 600Kilometres

mV

Aug-06 Feb-06 Aug-05 Feb-05 Aug-04Feb-04 Aug-03 Mar-03 Aug-02 Feb-02

ATTACHMENT

DRAFT INTEGRITY MANAGEMENT PLAN

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