Contents
This report is based on the following case - - PURPOSE
- This business case is support to the proposed Capital Expenditure Forecast, as a part of the 2011 Access Arrangement Submission for APA Group Queensland Networks.
- BACKGROUND
- Tingalpa Gate Station is connected to the Roma to Brisbane Pipeline – Metro section trough DN50 class 300 off-take valve. Gas velocity trough this valve is extremely high, at peak times more than 55m/s. Functionality of this valve has never been checked and there is a high concern that this valve may not be operable and that it can not be used to isolate RBP in case of any failure of connection pipe between RBP and Tingalpa Gate Station. With the potential for an increase of flow-rate trough the Tingalpa Gate Station, velocity trough this off-take valve will increase above 100m/s.
- Supply pressure is between 3,000kPa and 4,000kPa and is cut to 990kPa trough two monitor/active Gorter regulators DN50 Class 150. Stand-bay regulator run has two Fisher regulators DN50 class 300. Critical issue is that on main run Gorter silencers clog up with sulphur, in regular intervals of approximately 2 months, resulting in sharp outlet pressure drop and transfer of flow trough second run with very noisy Fisher regulators. Multiple complaints were received from neighbouring property with townhouses. Surveys confirmed that actual noise is much higher than allowable limits. To prevent this noise issues cleaning of silencers is scheduled at 2 monthly intervals.
- At the inlet to each regulator run there are 500 microns cartridge filters which are far below the standard 10 microns cartridges used on other similar sites and are not able to protect other equipment from fine dust.
- There are two metering runs with Equimeter T-57 turbine meters DN150 class 150 with a maximum capacity of 1,400m3/h. With current meter runs configuration it is not possible to perform meter on-line validations.
- The installed Tartarini odoriser has a specific design which is different to odorisers on other locations in Queensland. There are two outlets from gate station both operating at MAOP=1,050kPa. There are no spare parts available in Australia for this odouriser configuration. There have been instances where regulators on the odourisers have failed and as a result of that we were not able to odorise gas at this station while waiting for replacement regulators.
- This station also has some old plug valves that cannot be operated.
- The electrical installation needs a major upgrade to comply with the electrical codes. There are some transmitters at this site that in excess of 15 years in age and routinely fail. The wiring from these transmitters to the RTU is in urgent need of replacement as well as the junction boxes. In addition the RTU needs an upgrade in order for this site to comply with standards. The barriers are not fully compliant.
- The current earthing system does not comply with code. Recent lightning strikes to the station have damaged a flow computer and the associated transmitters. Tests indicate that the earthing is not complaint and significant work is required to install sufficient earthing at this site.
- Tingalpa Gate Station high-pressure steel network has 15km long DN100 steel pipeline supplying Cleveland with MAOP=5,000kPa that is not directly connected to gate station. There is possibility to extend this pipeline for approximately 200m to be able to connect directly to Tingalpa Gate Station.
- On its north end Tingalpa Gate Station high-pressure network is connected to Doboy Gate Station high-pressure steel network with separation block valve usually closed because of current capacity limitations on both gate stations. This link is used from time to time when network alternative operation is required to perform main relocation work or respond to emergencies but requires monitoring of flow-rates at both stations. Maximum hourly load for Doboy Gate Station is 4,600Sm3/h with plan to be reduced to approximately 2,500Sm3/h after disconnection of Caltex in second half of 2010.
- Tingalpa Gate Station currently supplies 20,000 domestic and 1,700 commercial and industrial customers with total connected load of approximately 114,000Sm3/h and actual peak load of 10,900Sm3/h in winter 2009 with average diversity factor of 0.10 (0.28 for C&I and 0.01 for domestics).
- Based on current load forecast there is potential additional hourly demands for this station as follows:
- - The Smith’s Snack Food (existing customers) 500Sm3/h to 720Sm3/h
- - PA Hospital (existing customer) 250Sm3/h to 330Sm3/h
- - Brisbane Children’s Hospital (new customer) 860Sm3/h to 2,674Sm3/h
- - Meadow Lea Foods (potential coal to gas conversion) 1,500Sm3/h
- Plus other significant potential loads at Mater Hospital (potential coal to gas conversion), Woolloongabba Commercial District and large domestic developments in Redland Bay.
- As addition to that there is possibility to supply all Doboy Gate Station high-pressure network trough Tingalpa gate station after Caltex is disconnected and supplied directly from transmission pipeline.
- Peak winter day load profiles for last 5 years are shown on chart bellow.
- IDENTIFICATION OF NEED
- Based on assessment of current performance of Tingalpa Gate Station and forecast additional future requirements identified critical needs are:
- To maintain integrity of services by providing adequate gas filtration and operability of all critical station valves
- To meet environmental requirements by reducing station noise to acceptable level at all times
- To comply with regulatory requirement by providing proper gas odorisation at all times
- To meet safety of services requirements by improving station electrical installations and earthing
- To maintain capacity to meet existing customers demand
- To provide capability to meet projected demand of existing and potential new customers
- To maintain integrity of services by maintaining back up or establishing permanent supply to customers connected to Doboy Gate Station high-pressure steel network
- To discuss concerns related to integrity of supply to Tingalpa Gate Station with transmission pipeline operator
- RISK ASSESSMENT
- There are number of risks identified on Tingalpa Gate Station that require urgent action.
- Station electrical installations and earthing do not meet technical requirements and represent safety risk for employees that operate and maintain this station and for equipment.
- Sporadic high noise levels do not meet environmental requirements and represent safety risk for public (neighbouring townhouses).
- There is risk of potential damage or failure of expensive equipments and related supply problems for large number of customers as a result of poor gas filtration.
- Major risk is potential loss of supply (further to station or connection to RBP failure) to 20,000 domestic and 1,700 commercial and industrial customers with potential high level of compensation claims. This potential high level outage with adverse reports in the local and national media can have long term impact on customer’s perception of natural gas being a safe and reliable source of energy.
- Additional risk is loss of revenue from potential new customers that we will be not able to supply from existing network and that will be not keen to pay large requested capital contribution.
- Attached Risk Mitigation Form showing current risk assessment and estimated risk levels for all alternative risk mitigation options.
- EVALUATION OF ALTERNATIVES
- Option 1
- Construct new gate station on same location that will meet requirements as follows:
- Minimum station design capacity of MHQ=20,000Sm3/h
- Connection for potential new station inlet MAOP=5,000kPa for MHQ=20,000Sm3/h at 2,000kPa
- One station outlet with MAOP=1,050kPa for MHQ=20,000Sm3/h at 1,000kPa
- One station outlet with MAOP=5,000kPa for MHQ=5,000Sm3/h at 2,000kPa
- New filtration, pressure reduction, metering, odorisation, instrumentation, electrical installations and earthing to meet current industry standards
- As addition to that discus concerns related to integrity of supply to Tingalpa Gate Station with transmission pipeline operator.
- This option is addressing all identified needs and related risks.
- Option 2
- Upgrade existing gate station with critical activities as follows:
- Replace existing filters (cartages of 10 microns or better)
- Replace Fisher regulators with two new regulators (monitor/active) that will produce acceptable level of noise like existing Gorter regulators
- Replace existing odorisation unit with standard model used on other similar sites that will have back up and spare parts in case of failure
- Replace critical faulty station valves
- Upgrade existing electrical installations and station earthing to meet required industry standard
- As addition to that discus concerns related to integrity of supply to Tingalpa Gate Station with transmission pipeline operator.
- This option is addressing identified public and operational safety needs and related risks including integrity of supply to existing customers.
- With maximum station capacity of approximately MHQ=14,000Sm3/h station will be able to meet only very limited increase in customer demand. Station will be not able to provide higher outlet pressure than 1,050kPa to Cleveland Pipeline and will require major upgrade to meet potential future demands in this area. It is very likely that station will not have sufficient spare capacity to permanently supply Doboy Gate Station high-pressure steel network after Caltex is disconnected in second half of 2010.
- Option 3
- Upgrade existing gate station with critical activities as follows:
- Purchase additional odorisation unit same as existing with all critical supporting equipment and parts and kip them in store as replacement if any part of existing unit fail in future
- Upgrade existing electrical installations and station earthing to meet required industry standard
- Continue to perform scheduled cleaning of silencers on Gorter regulators
- As addition to that discus concerns related to integrity of supply to Tingalpa Gate Station with transmission pipeline operator.
- This option is addressing to the less extend identified public and operational safety needs and related risks including integrity of supply to existing customers.
- With maximum station capacity of approximately MHQ=14,000Sm3/h station will be able to meet only very limited increase in customer demand. Station will be not able to provide higher outlet pressure than 1,050kPa to Cleveland Pipeline and will require major upgrade to meet potential future demands in this area. It is very likely that station will not have sufficient spare capacity to permanently supply Doboy Gate Station high-pressure steel network after Caltex is disconnected in second half of 2010.
- ESTIMATED COST
- Budget cost estimate is based on current schedule of rates with contractor selected trough a public tender process, actual material and direct labour costs and applicable overhead charges and historical actual costs on similar projects. All costs are in $Real 09/10.
- Option 1
- Cost estimate by activity:
- New piping with filtration and pressure reduction sections $190,000
- New high-pressure metering section $90,000
- New odorisation unit $85,000
- Electrical installation and earthing upgrade $120,000
- TOTAL $485,000
- Cost estimate by type:
- Material $291,000
- Direct labour $72,750
- Contractors $24,250
- Overheads $97,000
- TOTAL $485,000
- Option 2
- Cost estimate by activity:
- New filters, pressure regulators and valves $175,000
- New odorisation unit $85,000
- Electrical installation and earthing upgrade $120,000
- TOTAL $380,000
- Cost estimate by type:
- Material $228,000
- Direct labour $57,000
- Contractors $19,000
- Overheads $76,000
- TOTAL $380,000
- Option 3
- Cost estimate by activity:
- Spare odorisation unit $65,000
- Electrical installation and earthing upgrade $120,000
- TOTAL $185,000
- Cost estimate by type:
- Material $85,000
- Direct labour $48,000
- Contractors $15,000
- Overheads $37,000
- TOTAL $185,000
- PLAN FOR EFFECTIVE EXECUTION
- Basic requirement for conforming capital expenditure specified in National Gas Rules 2008 Section 79(1) is that the capital expenditure must be such as would be incurred by a prudent service provider acting efficiently, in accordance with accepted good industry practice, to achieve the lowest sustainable cost of providing services.
- APA Group Queensland network has outsourced its capital works program (material and labour) trough a public tender process, thereby obtaining a market price with respect to the provision of these services.
- There is plan to continue to test market in regular intervals to ensure that the proposed project will be executed at the lowest sustainable cost. Competitive tendering for supply of material is planned to be organised each year and for provision of capital works services in 2 to 3 years intervals.
- JUSTIFICATION
- Basic requirements for justification of conforming capital expenditure specified in National Gas Rules 2008 Section 79(2) are as follows:
- The capital expenditure must be justifiable on a ground:
- The overall economic value of the expenditure is positive; or
- The present value of the expected incremental revenue to be generated as a result of the expenditure exceeds the present value of the capital expenditure; or
- The capital expenditure is necessary:
- To maintain and improve the safety of services; or
- To maintain integrity of services; or
- To comply with regulatory obligation or requirement; or
- To maintain the service provider’s capacity to meet levels of demand for services existing at the time the capital expenditure is incurred (as distinct from projected demand that is dependant on an expansion of pipeline capacity); or
- The capital expenditure is an aggregate amount divisible into two parts, one referable to incremental services and the other referable to a purpose referred to in paragraph “c”, and the former is justifiable under paragraph “b” and the latter under paragraph “c”.
- This capital expenditure is justified on a ground:
- It is necessary to meet environmental requirements by reducing station noise to acceptable level at all times
- It is necessary to comply with regulatory requirement by providing proper gas odorisation at all times
- It is necessary to meet safety of services requirements by improving station electrical installations and earthing
- It is necessary to maintain capacity to meet existing customers demand
- It is necessary to maintain integrity of services with back up supply to customers connected to Doboy Gate Station high-pressure steel network
- The present value of the expected incremental revenue to be generated as a result of the relevant part of this expenditure exceeds the present value of this part of capital expenditure
- RECOMMENDATION
- It is recommended to accept Option 1 and construct new gate station on same location as existing one. This option will meet all critical regulatory, environmental and safety requirements, maintain integrity of supply to existing customers and additional spare capability to meet potential future customer demands including capability to supply current customers (after disconnection of Caltex) for Doboy high-pressure network .
Description
N/A
