UPDATE: Varanus Island Gas Explosion and Fire

“A State of Dependencies” resulted especially for Western Australia (WA), the largest Australian state by land mass.

What happened? On 3 June 2008 at 1340 hours (local time), an explosion occurred. There were no injuries and all personnel were accounted for. 153 employees were evacuated safely by helicopter and boat, although 14 remained to fight the resulting fire and monitor the situation.

The explosion and fire affected gas export pipelines that deliver gas for domestic and industrial use. Initially, it was thought gas supply would be affected for a number of days. When the damage was fully assessed and repairs began, reduced gas supplies continued for a number of months.

Source http://en.wikinews.org/wiki/Apache_pipeline_fire_-_Varanus_Island,_Western_Australia

Progress on repairs - Partial gas supplies were restored in August 2008 with full production anticipated this month.

Impacts - WA’s gas supplies were initially reduced by 30%, which impacted on power generation with 2 power stations were recommissioned; mining; tourism and hospitality; alumina refining; ammonia and asphalt (bitumen or tar for road surfacing) production; logging; pork; and many other industries as well as reduced export earnings.

The Australian Treasurer, Wayne Swann reported as part of the National Accounts, a 0.25% reduction in Gross Domestic Product (GDP) in the September 2008 quarter.

The WA State Government at the time of the explosion was voted out of government at an election called after the Varanus Island explosion, fire and the subsequent reductions in gas supplies.

Inquiries and reports – On 19 June 2008, Crikey, an online independent media source and popular in Australia provided photos and what it claimed was an anonymous WA gas worker’s account. This is available at http://www.crikey.com.au/Politics/20080619-WA-gas-worker-tells.html

There are three inquiries have been completed or underway.

1. The WA Department of Industry and Resources engaged National Offshore Petroleum Safety Authority (NOPSA) to investigate the cause of the pipeline rupture on Varanus Island. NOPSA reported to DOIR and their Minister released the report. It is available in hard copy on a request basis from Ryan Emergy (08) 9222 3333 or +61 8 9222 3333.
2. The Australian Senate Economics Committee reported on the impacts of the Varanus Island on 3 December 2008. This report is available online at http://www.aph.gov.au/Senate/committee/economics_ctte/wa_gas_08/report/report.pdf
3. Apache contracted Alert for an internal inquiry (NOPSA, VI report, p 11). It is uncertain whether this report will be made public.
4. The new WA Government is confirmed a further inquiry (http://www.abc.net.au/news/stories/2008/10/21/2396850.htm?site=perth), but waited until the Senate inquiry reported and its findings were considered (http://www.parliament.wa.gov.au/web/newwebparl.nsf/iframewebpages/Hansard+-+Advanced+Search).

In its Media Statement of 18 October 2008, Apache Northwest Pty Ltd, a subsidiary of Apache Energy claimed the NOPSA report “premature and based on an incomplete investigation”. Managing Director, Tim Wall, Apache Energy, the Australian subsidiary of Apache Corporation, Houston, Texas, continued: “Apache disagrees with any conclusions drawn at this time about this unforeseeable event because they are premature and misleading.” NOPSA found “possible breaches of legislation” under the Petroleum Pipeline Act 1969 (WA).

Background - Apache Energy runs the Varanus Island gas processing facility http://www.apachecorp.com/ and http://en.wikipedia.org/wiki/Apache_Corporation

Apache’s Australian operations in brief Exploration in Australia is focused in the offshore Carnarvon, Gippsland and Perth basins, where Apache holds 5.3 million net acres in 29 exploration permits, 10 production licenses, and five retention leases. Production operations are concentrated in the Carnarvon Basin with 10 production licenses, nine of which Apache operates. The Varanus Island processing and transportation hub is an important infrastructure asset [bolding added].

Thanks and cheers,

Chris Miller

Notes: See the previous post by Chirs Miller by going to the reference below.

Chirs Miller will be presenting a paper on Varanus Island at the 2009 Business Continuity Summit, Brisbane, Queensland, 25-26 March.