Victoria gas supplies restarting after blast

Limited natural gas flows to the Australian state of Victoria have been restarted following an almost total cessation of gas deliveries.

The supply crisis was the result of a series of explosions and resulting fires at the Longford gas processing plant, operated by Esso Australia Ltd. and co-owned by BHP Petroleum Pty. Ltd. (OGJ, Oct. 5, 1998, p. 39). The plant processes oil and gas from Bass Strait fields and supplies 80% of the state's gas needs.

The plant outage left all industrial and domestic users in the state without gas, while emergency services were using a combination of linepack gas and gas brought into Victoria via a small-diameter pipeline connecting the New South Wales pipeline system to the Victorian grid. Because the Longford plant also processes crude oil and LPG, supplies of these commodities were also cut.

The crisis cost Victoria an estimated $58 million (Australian)/day during its nearly 2-week duration and put 100,000-150,000 employees temporarily out of work.

Gas started flowing to the state's 500 largest industrial users on Oct. 5. An additional 200 were connected the following day.

All industrial users were expected to have gas by the afternoon of Oct. 7, although an estimated 1.4 million households were still without gas at that time.

Domestic supplies were expected to restart late last week, according to local reports. The extent to which supplies will be restored in the short term, however, is still unknown.

Esso's recovery

Both Esso and BHP have declared force majeure on contracts with key customers, including oil refineries.

An investigation into the cause of the explosions is under way, but the results may not be known for some time. Although damage was sustained in Gas Train No. 1, Trains 2 and 3 were shut in for safety reasons, as all three plants are interconnected.

Esso was working around the clock at presstime to restore the flow into the plant. New pipe was installed to bypass the damaged train and to test systems in undamaged units.

Gas Plant No. 1, the oldest of the three trains, was commissioned in 1969 to process gas from the then newly discovered Barracouta and Marlin fields in Bass Strait. The other two plants were added as new discoveries were made.

At the time of the explosions, Longford was capable of processing more than 530 MMcfd of sales gas, 37,700 b/d of LPG, and 188,500 b/d of crude oil.

Backlash

Industry was losing an estimated $200 million/week during the outage.

A class-action suit has already been launched against Esso on behalf of industrial, commercial, and domestic gas users. The suit, led by a local tile manufacturer, has the potential to become Australia's largest-ever class-action suit.

And trade unions are fighting for compensation from the company. Unions have also claimed that Esso had reduced maintenance efforts at the Longford plant.

Esso has denied the charge.