Friday 28 October 2011

Confusing media picture around Maui gas pipeline leak

A very confusing media picture on this.

Firstly yesterday I referenced an article from Stuff entitled “Industry take big hit”

By the afternoon the same article had metamorphosed into “Gas back on for small busineses”.

This morning it appears that there are shortages of food because of the leak - despite that the headlines in the NZ Herald were about the All Black victory.

There was an item on the 7.00 am news on Radio New Zealand saying that the gas producers were saying that it was not economic to build a new pipeline because gas reserves at Maui are not high enough to warrant the cost of construction.

By 7.30 this item had disappeared from the news.

This is what the local Taranaki media is saying this morning.

How long until the next emergency?


All this is about an emergency situation - but there is predictably nothing about the bigger picture. What I see is basically what happens when oil (in this case gas) reaches Peak; 30-year-old infrastructure is starting to break down and no one is going to make the investment to build another gas pipeline because it is simply not economically viable.

Run on food as leak hits Taranaki supplies

28 October, 2011

Bread was flying off the shelves last night as the effects of the Maui gas leak reached Taranaki supermarkets.

Late last night some supermarkets had only about 20 per cent of their bread stock left.

"People were loading up their trolleys with it, some had four or five loaves. They were probably just thinking they better buy some and stick it in the freezer," shopper Murray Hills said.

"It was just about empty."

Shoppers at City New World were faced with signs warning of bread shortages as bakeries shut down production because of the Maui problem. "We are sorry for any inconvenience this may cause and as soon as we can we will restore stock levels for you," the sign read.

Supermarkets across country face bread, dairy shortages

This is coverage from Radio New Zealand this morning

Supermarkets across the country face food shortages

Gas leak forces businesses to review their continency plans

Here is the modified article from yesterday -
The original headline was "North Island Gas leak could cripple businesses"

Hopes gas pipeline can be lifted by tomorrow

DOWNSTREAM: A map shows where the gas pipeline was damaged in Taranaki and other gas lines affected by the gas supply shut down.

27 October, 2011

The leaking Maui gas pipeline could be excavated some time tomorrow morning if the process runs as planned.

The Maui pipeline was closed yesterday after a remote Taranaki landowner discovered gas escaping during the weekend. Operator Vector believes it may take at least two days to fix the leak in the pipeline, which carries most of New Zealand's gas supplies.

Large commercial and industrial gas users in Bay of Plenty and Waikato northwards have been told to stop using gas until further notice.

Vector, as the technical and system operator for the Maui pipeline, could then consider the best method to repair the damaged pipeline.

An estimated 5000 businesses in the upper North Island are thought to be affected by the gas pipeline outage.

Well-known Kiwi manufacturer Griffins Foods is one that has had the majority of its operations shut down because of the gas leak.

''Obviously this situation is high impact for the Griffins business - we have no indication as to how long this situation will continue, however speculation ranges from between three and 12 days,'' the company said.

At a press conference late this afternoon Vector said the gas curtailment affected only areas in a direct line north of Taranaki so businesses further south or east out into the Hawkes Bay region have not been impacted.

Acting minister of energy and resources Hekia Perata said the government's focus is firstly on ensuring safety so essential services are operating.

''The government has been assured by Vector that they have been working  systematically, methodically, safely and expeditiously on assessing the situation in repairing it as quickly as possible,'' she said.

''We are very keen, as are they, to ensure that safety is paramount at the site and in the work that they're doing there aren't any further complicating issues.''

Essential services - which included bakeries - are now permitted to use gas as are residential customers in their homes.

''I just want to reiterate that those users who are able to take gas should moderate their use as much as possible,''  Parata said.

''While the gas outage is being repaired, we are assured by Transpower that there is sufficient electricity to cover that outage.''


Fonterra dairy plants between Taupo and south of the Auckland Harbour Bridge will start cranking up operations again in the next 16 hours after being paralysed along with other big businesses by a major gas supply problem.

Some hospitals are back up and running, using gas from the Vector pipeline which normally only supplies residential customers. Residential and other customers have been told they need to conserve gas.

Essential services were still being asked to be careful how they used power, but were back up and running.

There are 255,000 gas customers, of which 250,000 are small residential customers.

The big users, such as power stations and industry, were still affected.

Fonterra is advising its farmers in the regions affected by the pipeline rupture to continue dumping diluted milk on their paddocks until further notice. Each processing plant will take some hours to get up to speed again, and not all will be fully operational, a spokesman said.
The first set of gas customers were told to curtail their use at 1.30am on Monday, followed by more customers yesterday morning.

New Plymouth was not affected, but customers just north of the city were affected, including the upper North Island, Bay of Plenty, Gisborne and the Central North Island.

Huntly Power Station has been forced to switch from burning gas to coal, although electricity supplies are not thought to be under threat.

The country's only oil refinery and supplier of half of all petrol has switched to alternative fuel to continue to run the Marsden Point plant in Northland.


In a statement this afterrnoon, Griffins said it had to stop the bulk of operations at its Wiri and Papakura plants in Auckland until gas supply resumes.

Griffins was looking at converting some production to alternative fuel supplies, but it was not yet known if that was possible.

The company had some stock cover available and will be able to provide restricted supply to the market over the next few weeks. It will also be able to recommence production as soon as supply is restored.

''We are working closely with our staff and with the unions to ensure that we support people through this period of disruption to our operations and are in the process of allocating alternate duties for our 620 employees who work at our manufacturing sites in Auckland,'' Griffins said.


The Service and Food Workers Union food industry leader, Chas Muir, told BusinessDay the union's local organisers have been the supporting workers from the onset ''because at this time of year workers are very concerned about their abilitiy to put food on the table and Christmas is coming up''.

''We would expect all employers to do the right and decent thing. We've had workers who have just had children on school holidays for which they need their annual leave, we've got Christmas coming up - they'll need annual leave.''

Muir said staff couldn't be expected to use their annual leave to subsidise their wages. ''And of course employers should have insurance covering them in these events.''

Employers and Manufacturers Association spokesman Gilbert Peterson said employers could ask staff to take annual leave or take on duties they didn't usually do in a situation like this.
"The employer, at the end of the day, has a legal right to assign staff to other duties."

But he said employers and employees were generally good at coming to a compromise, when exceptional circumstances arose, such as during the swine flu scare and the Christchurch earthquakes.

"We find in circumstances like this when it's out of the hands of employers and employees that they're good at seeing the other's point of view and coming to an agreement."

The gas leak is the last thing New Zealand business needed following disasters this year and a ragged economy, said the EMA's Bruce Goldsworthy.

Two major companies Goldsworthy has spoken to, which didn't want to be named, said they were trying to look after customers by running down stock levels and look after staff by finding them something useful to do while their plants are shut down by the leak. They're hopeful Vector will get the problem fixed within the next 48 hours.


Initially, on Saturday a landowner saw gas bubbling up through low lying water and Vector has been liaising with him since then.

Late on Monday evening, a gas leak was identified but at that point it wasn't clear if it was the Maui or Vector pipeline, Vector chief executive Simon McKenzie told a press conference.

The Maui and Vector pipelines run parallel from Taranaki through to Huntly.

Vector is the technical and system operator for the Maui pipeline, which is is owned by Maui Developments, a subsidiary of Shell NZ.

The incident was extremely critical, McKenzie said.

The pipeline had to be isolated in the area of the suspected leak, and valves shut around the leak, every kilometre or so.

''Through this whole period of time we have to isolate the pipeline, and then we have to vent the gas. Civil aviation has to be told because the gas is extremely high pressure,'' he said.
A team had been working on excavating the pipeline, expected to be completed later this afternoon, and was looking at pipeline repair options.

A more accurate update was expected later today on the repair time, but it was likely to be at least two days.

The pipeline had a weld crack on the pipe, about 80mm long, and there was some creasing on the pipeline, he said. The section that was damaged was about four metres long.

It was premature to say what the cause was, but there was some ground movement.
The Vector pipeline was meeting as much demand as it could in Auckland.

There had been no issues on the pipeline for 30 years, and it was regularly maintained, he said.

Back up was the Vector pipeline, and it was not economic to build a larger back up pipeline which would be an ''extremely expensive exercise''.

Acting Energy and Resources Minister Hekia Parata said the Government would give Vector any assistance it needed.


Auckland Council has been shutting down gas supplies to its buildings and services, including swimming pools, crematoria and heating in some council offices and buildings.
The council has also activated its emergency co-ordination centre and Mayor Len Brown is urging Aucklanders to do what they can to cut gas use.

"This is a major challenge for Auckland. I am urging all Auckland businesses and retailers to seek advice from their gas provider as to how to safely shut off supplies as quickly as possible," Brown said.

Gas has been turned off at AUT University's City and North Shore campuses, including science laboratories, teaching kitchens, gymnasiums and commercial food outlets.

"Gas to our student accommodation is still on, in line with advice to Auckland residential customers," said AUT Deputy Vice-Chancellor Professor Rob Allen.  

Auckland Grammar School's head of operations, Patrick Gargiulo, said the heating for the pool had been switched off following a request from supplier Nova Energy.

Auckland Art Gallery was looking at ways to limit the air conditioning while ensuring the art was not affected in the temperature-controlled rooms.


Fonterra's Northland processing sites Kauri and Maungatoroto, as well as the Tip Top plant, will stay closed.

Fonterra's consumer products manufacturing plant at Takinini, south of Auckland, has been running on diesel, and supplies to supermarkets and stores should not be impacted, the company said. However, icecream supplies could be hit with Tip Top closed.

Vector is supplying the big dairy plants in the Waikato and Bay of Plenty with an emergency restricted supply to avoid a potential environmental disaster as Fonterra farmers in the affected regions are forced to dump 35 million litres a day on their paddocks.

The dumped milk is worth about $20 million a day to affected farmers. Although their farmer cooperative will reimburse them for lost milk, the money will have to come from farmers' own pockets in the long run.

The Tatua dairy cooperative in the Waikato has been shut down since yesterday by the gas outage. Unlike its Fonterra neighbours, it has had no word of resumed gas supply from Taranaki.  Its 109 farmers are having to dump milk on their farms, the company said.

Open Country Dairy's plant at Whareroa in the Waikato is unaffected. The privately owned company is trying to help Fonterra and Tatua farmers by offering to process whatever milk it can, but has limited capacity in the current seasonal height of milk production..

Fonterra's Waitoa and Te Awamutu sites are operational because they are coal-fired.
The gas leak had come at the worst possible time, Federated Farmers president Bruce Wills said.

"It's very unfortunate this has happened right at the peak of the season...if it was going to happen, it's probably happened at the worst time."

Fonterra processors worked for half the day yesterday, and a speedy resolution and good weather meant the environmental impacts had been very small, the company said.

Some major greenhouse growers around Auckland will be seriously affected without gas heating for the next few days, said Leigh Catley, communications manager for Horticulture New Zealand.

She said it could easily impact on the supply of tomatoes and capsicums in the run-up to Christmas.

That's likely to force up the price of those vegetables to consumers and also stop exports that need to be heat-treated for biosecurity.

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