THE NEW South Wales Environmental Protection Authority (EPA) has fined AGL Energy $15,000 over a gas leak from a coal seam gas well at the Rosalind Park gas plant in the suburb of Spring Farm.
The fine comes one month after AGL chief executive Andy Vesey announced he would undertake a comprehensive review of the company’s upstream gas business.
In its announcement of the decision, EPA chief environmental regulator Mark Gifford said the Authority had determined AGL did not maintain its gas well in a proper and efficient condition as required by its Environment Protection Licence.
The incident occurred on 31 August 2014, when methane was released from a pressure safety valve on the plant’s well number five, which was being brought back online after an operational shut down.
“High pressure gas levels were occurring at the well head whilst it was being brought online, however due to the build-up of coal fines in a gas pressure sensor at the well head, lower pressure readings were being transmitted to the control room at the AGL Rosalind Park Gas Plant,” Mr Gifford said.
“These appeared to be within the normal range to the operators who allowed the gas well to be operated remotely. This resulted in a pressure safety valve activating on several occasions during the evening.”
Further to this, a high pressure switch that was supposed to shut down the well system when higher pressures occur did not activate on the evening, Mr Gifford said.
“The EPA received a number of complaints from the community about the incident and we recognise how this incident would have created significant concerns for the nearby residents, particularly with the hissing sound that occurred from the pressure releases,” he added.
In its statement concerning the incident, AGL said the well had released roughly 10,000 standard cubic feet of natural gas – which it said was equivalent to the space occupied by the air in an average family room.
AGL head of community and stakeholder relations Jenny O’Brien said AGL accepted the result of the investigation, but added that there was no harm to human health or the environment as a result.
“Since the incident, corrective actions have been taken at the gas plant to prevent a similar incident occurring again,” she said.
“These have included the installation of additional alarms in the control room to provide early warning of high pressure events at well sites and the review and implementation of operating procedures and maintenance plans.”
The company’s review of its upstream gas sector was to encompass its management structure and operational practices.
It is being led by AGL Macquarie general manager Scott Thomas, who has been appointed acting general manager of the Upstream division as the group’s existing general manager, Mike Moraza, brought forward his retirement.
Mr Vesey said it was important for the company to adapt the structure and governance frameworks as it prepared for a new phase in the development of its gas projects.
“The gas business has the potential to provide vital gas resources for our NSW customers and is set to contribute significantly to our balance sheet and deliver solid returns for our shareholders. It is important that we get the structure right,” he said.
AGL’s upstream gas division returned an operating loss before interest and tax of $10 million for the first half of the 2014-2015 financial year, an improvement on the $13 million loss incurred during the previous reporting period.