South Australian Current Acts South Australian Current ActsPetroleum Act 1940
Pipeline Licence No. 2
I, ERIC ROGER GOLDSWORTHY, Minister of Mines and Energy in and for the State
of South Australia (hereinafter referred to as the Minister) pursuant to the
Petroleum Act, 1940-1981 (hereinafter referred to as the Petroleum Act),
and all other enabling powers hereby grant to: SANTOS LIMITED a Company
incorporated under the laws of the State of South Australia and having its
registered office at 183 Melbourne Street, North Adelaide in that State. DELHI
PETROLEUM PTY. LIMITED a Company incorporated under the laws of the State of
South Australia and having its registered office at 33 King William Street,
Adelaide in that State. SOUTH AUSTRALIAN OIL & GAS CORPORATION PTY. LTD. a
Company incorporated under the laws of the State of South Australia and having
its registered office at 226 Melbourne Street, North Adelaide in that State.
BASIN OIL NO LIABILITY a Company incorporated under the laws of the State of
New South Wales and having its registered office at C/- Priestly and Morris,
37 Pitt Street, Sydney in that State. BRIDGE OIL LIMITED a Company
incorporated under the laws of the State of New South Wales and having its
registered office at 60 Margaret Street, Sydney in that State. BRIDGE OIL
DEVELOPMENTS PTY. LIMITED a Company incorporated under the laws of the State
of New South Wales and having its registered office at 60 Margaret
Street, Sydney in that State. TOTAL EXPLORATION AUSTRALIA PTY. LIMITED a
Company incorporated under the laws of the State of New South Wales and having
its registered office at 168 Walker Street, North Sydney in that State. REEF
OIL NO LIABILITY a Company incorporated under the laws of the State of New
South Wales and having its registered office at C/- Priestly and Morris, 37
Pitt Street, Sydney in that State. VAMGAS LIMITED a Company incorporated under
the laws of the State of New South Wales and having its registered office at
Suite 801, London Assurance House, 20 Bridge Street, Sydney in that State.
ALLIANCE PETROLEUM AUSTRALIA NO LIABILITY a Company incorporated under the
laws of the State of Victoria and having its registered office at 30 Collins
Street, Melbourne, in that State. CRUSADER RESOURCES N.L. a Company
incorporated under the laws of the State of Victoria and having its registered
office at 44 Market Street, Melbourne in that State. (hereinafter called "the
Licensees" which expression shall include in respect of each of the Licensees
its successors and permitted assigns) this licence, as the same may be varied
or replaced from time to time (referred to in the Indenture (hereinafter
defined) as "Pipeline Licence No. 2"), to construct install and operate a
pipeline system described hereunder for the conveyance of Product subject to
the Conditions set out hereinafter.
GENERAL DESCRIPTION OF THE PIPELINE SYSTEM
The pipeline and the machinery and appurtenances which the Licensees shall use
for the operation of or in conjunction with the pipeline shall
comprise:—
A. A 355.6 millimetres
outside diameter steel pipeline for the conveyance of Product, approximately
659 kilometres in length commencing at the outlet side of a petroleum liquids
extraction plant to be constructed in the vicinity of the Moomba natural gas
processing plant along a route as nearly as possible parallel to the existing
natural gas pipeline owned by Pipelines Authority of South Australia (PASA),
from Moomba to a point in the near vicinity of Compressor Station Number 4 on
the said natural gas pipeline, thence south-westerly and southerly, to a
delivery point at a fractionation and storage facility to be constructed in
the vicinity of Stony Point near Whyalla in the State.
In general terms and subject to Condition 4 hereof the said route shall more
particularly follow that shown on the plan annexed hereto, described as
Schedule 1, which said route has already been approved by the Governor;
B. An inlet metering
station at the outlet side of the said petroleum liquids extraction plant;
C. A delivery metering
station at the inlet to the said fractionation and storage facility to be
constructed in the vicinity of Stony Point;
D. A pumping station
at the outlet side of the said petroleum liquids extraction plant together
with a number of additional pumping stations as shall be required in order to
comply with sub-Condition (i) of Condition 6 hereof;
E. A system of control
for the operation and maintenance of the pipeline system;
F. A communication
system connecting the inlet and outlet points and a number of intermediate
fixed points of the pipeline; and
G. A mobile
communication system for use between any two points on the pipeline or in the
near vicinity thereof.
CONDITIONS
1. —
(i)
Terms and expressions defined in the Indenture
(hereinafter defined) shall, where the context so admits or requires, have the
same meanings in this licence; and
(ii)
"The Indenture" means an Indenture of even date with this
licence entered into between the State of the first part the Licensees
(therein referred to as "the Producers") of the second to twelfth parts (both
inclusive) and the Minister of the thirteenth part as the same may be varied
or replaced from time to time.
2. The term of this
licence is twenty-one years, commencing on the date hereof, and terminating at
midnight on the 25th day of November, 2002, both dates inclusive, but subject
always to renewals as provided in clause 52 of the Indenture.
3. —
(i)
This licence is granted pursuant to the provisions of the
Petroleum Act and all Acts passed in amendment thereof or in substitution
therefor, and all regulations and by-laws made thereunder not inconsistent
with the terms of the Indenture.
(ii)
If the Stony Point (Liquids Project) Ratification
Bill, 1981, is not passed so as to come into operation as an Act of the
State before the 31st day of December 1981, or such later date as the parties
to the Indenture may agree, in the same terms as those now contained in the
Stony Point (Liquids Project) Ratification Bill, 1981 or in such other
terms as the parties hereto otherwise may agree in writing, this Pipeline
Licence shall lapse on and with effect from that date.
4. PASA shall acquire
certain right, title and interest in certain lands between Moomba and Stony
Point pursuant to and more particularly described in an agreement of even date
herewith made between PASA and the Licensees described as the PASA and
Producers (Right of Way) Agreement therein and herein described as the
"pipeline land". The pipeline shall be constructed and installed within the
boundaries of the pipeline land providing that the Licensees before causing
construction and installation of the pipeline to commence shall request PASA
to identify the position where the pipeline shall be installed so as not to
cause damage to or interference with the operation of the existing natural gas
pipeline owned by PASA. The Licensees shall comply with any relevant direction
or instruction given by PASA as a result of the request under this Condition.
Without limiting the generality of the foregoing the pipeline shall unless
otherwise approved in writing by PASA be installed in such a position as not
to be closer at any point than 20 metres to the western boundary of any land
in relation to which PASA shall have a right, title or interest for any
purpose in connection with the existing natural gas pipeline owned by PASA.
Save as hereinbefore provided the pipeline route as nearly as possible shall
be parallel to the existing natural gas pipeline owned by PASA, from Moomba to
a point in the near vicinity of Compressor Station No. 4 on the said natural
gas pipeline, thence south-westerly and southerly to a delivery point at a
fractionation and storage facility to be constructed in the vicinity of Stony
Point.
The plan annexed hereto described as Schedule 1 does not contain sufficient
detail to identify the pipeline route otherwise than in general terms. Nothing
contained in the said Schedule 1 is intended to derogate from these Conditions
so far as concerns the position where the pipeline shall be installed,
providing that the Licensees will confer with PASA as soon as practicable
after the date of this licence with a view more precisely to identifying the
position where the pipeline shall be installed.
5. Except as otherwise
provided by these Conditions the pipeline shall be designed, constructed,
installed, tested, maintained and operated in accordance with Australian
Standard 2018–1981 (S.A.A. Liquid Petroleum Pipeline Code), supplemented
by:—
(i)
Bechtel-Kinhill Specification L-01 for Electric
Resistance Welded High Test Line Pipe;
(ii)
Bechtel-Kinhill Specification L-03 for Mainline Valves;
(iii)
Bechtel-Kinhill Specification L-04 for Pipeline
Protective Tape Coating;
(iv)
Bechtel-Kinhill Specification Exhibit C to Contract No.
141 56-CD-201-Construction of Moomba to Stony Point Pipeline; and
(v)
Bechtel-Kinhill Specifications forming part of Contract
No. 141 56-CD-207-Cathodic Protection.
which Specifications were lodged by the Licensees in making application for
this licence.
The Licensees shall comply with all Australian Standards from time to time in
force relating to the maintenance and operation of liquid petroleum pipelines
in Australia.
6. The pipeline shall
be designed so as to comply with the following requirements:
(i)
An initial capacity to convey 6,360 cubic metres per day
(40,000 barrels per day) of Product with provision for increase to capacity of
12,720 cubic metres per day (80,000 barrels per day) of Product;
(ii)
To permit the conveyance of Product including the
capability of transporting ethane in solution in a high vapour pressure liquid
system;
(iii)
To permit a maximum allowable operating pressure, as
defined by Australian Standard 2018–1981 of 10,380 kilopascals, at a
normal operating temperature not exceeding 38 degrees Celsius, and a maximum
temperature of 75 degrees Celsius under unusual conditions;
(iv)
An outside diameter of 355.6 millimetres; and
(v)
To permit conversion of the pipeline, at a later time to
be agreed between the Minister and the Licensees, to allow transmission of
natural gas in accordance with Australian Standard 1697–1981 (S.A.A. Gas
Pipeline Code) at a maximum allowable operating pressure (as defined in that
Standard) of not less than 7,322 kilopascals.
7. The Licensees
shall, as soon as practicable, submit to PASA complete details of all
equipment and materials installed on the pipeline. "As constructed" drawings
and all revisions of such drawings shall be supplied to the Minister and to
PASA.
8. When constructed
and installed the pipeline shall include the following:
(i)
Remotely operated valves to permit sections of the
pipeline to be isolated under emergency conditions. Information relating to
the selection of the site for each such remotely operated pipeline valve shall
be submitted to the Minister for approval before construction and installation
of the pipeline shall commence;
(ii)
A cathodic protection system to prevent external
corrosion of the pipeline. The said system shall be such as will not adversely
affect the cathodic protection of the existing natural gas pipeline owned by
PASA. The design shall be subject to approval by PASA. Following installation
tests shall be carried out at the cost of the Licensees to demonstrate that
the level of protection on the existing pipeline has not adversely been
affected by the system proposed by the Licensees. Surveys at intervals not
exceeding twelve months during the term of this licence shall be carried out
to ascertain whether the cathodic protection on each pipeline is adequate and
appropriate for the purpose of preventing external corrosion of either
pipeline;
(iii)
Facilities to allow the passage through the pipeline of
an instrumented inspection tool calibrated in such a manner as to detect
defects in the pipeline. Pipeline inspection surveys, using the inspection
tool shall be carried out at intervals not exceeding five years unless
otherwise approved by the Minister; and
(iv)
A communications system which shall provide for telemetry
of such status information and pressure, flow and other operating data as the
Minister shall require, remote control of valves for routine and emergency
operation, and voice communication to locations along and in the near vicinity
of the pipeline and mobile vehicles employed for purposes relating to the
operation or maintenance of the pipeline.
9. Prior to the
conveyance of liquids having a vapour pressure higher than atmospheric
pressure the Licensees shall install a leak detection system. Details of the
system including its design and sensitivity shall be submitted to the Minister
for his approval before it is installed.
10. Before
construction or installation of the pipeline commences the Licensees shall
take all reasonable steps to inform contractors of the relevant provisions of
this licence, the Indenture and the Petroleum Act and any conditions,
directions, instructions or matters of a like nature whether statutory or
otherwise relating to construction and installation of the pipeline.
11. The Licensees
shall not interfere nor cause interference with or damage to the existing
natural gas pipeline owned by PASA during the term of this licence.
12. The pipeline shall
be submitted to a hydrostatic strength test for a period of four hours at a
minimum pressure of 13 696 kilopascals and a maximum pressure of
14 416 kilopascals, and a hydrostatic leak test for a minimum period of
24 hours at a minimum pressure of 12 975 kilopascals and a maximum
pressure of 13 696 kilopascals. Both the said tests shall be conducted in
accordance with the requirements of Australian Standards 2018–1981 and
1978–1977.
13. Manuals described
the operating and maintenance procedures specified by Australian Standard
2018–1981 and all revisions to such manuals shall be submitted by the
Licensees to the Minister for his approval thereto and the Licensees, upon the
manuals being approved by the Minister, shall comply with the operating and
maintenance procedures specified therein. A review of such manuals may be
required by the Minister from time to time.
14. No section of the
pipeline shall be put into operation until all necessary hydrostatic testing,
tie-ing in and backfilling of the trench has been completed to the
satisfaction of the Minister, and the manuals describing the operating and
maintenance procedures required in accordance with Condition 13 have been
approved by the Minister.
15. Whenever the
standards referred to herein require certified test certificates to be
submitted, such certificates shall be properly endorsed in accordance with the
requirements from time to time of the National Association of Testing
Authorities.
16. The Licensees
shall, at the request of the Minister or of any person authorised by him to
make the request on his behalf, produce from time to time to the Minister or
to the person authorised as aforesaid, all books, accounts and other records
in their possession or power relating to the costs of constructing, operating
and maintaining the pipeline and shall permit the Minister or the person
authorised as aforesaid, to inspect and make copies of those books, accounts
and records.
17. Save as
hereinbefore provided, prior to completion of construction and installation of
the pipeline the Licensees may accept and employ the services of PASA
including but not limited to advice on technical matters pertaining to the
design, construction, installation and operation of the pipeline and in
relation to the supervision of all work carried out by Bechtel-Kinhill Joint
Venture.
18. Prior to
completion of construction and installation of the pipeline the Licensees
shall enter into an agreement in writing with PASA on terms to be mutually
agreed between the Licensees and PASA, (which terms shall comply with the
requirements of Condition 13 hereof) the provisions of which agreement shall
have been approved by the Minister before the parties thereto shall enter into
and become bound by such agreement, pursuant to which PASA shall maintain the
pipeline and communications systems (as described in clauses A, F and G of the
General Description of the Pipeline System) and that part of the control
system (as described in clause E of the General Description of the Pipeline
System) which is to be installed in PASA's Glenside Control Centre in good
order and condition. Terms and conditions relating to the maintenance of
pumping stations, if made the subject of a subsequent agreement between PASA
and the Licensees, shall be submitted for the Minister's approval before being
implemented.
19. The right, title
and interest in and to the pipeline land which PASA shall acquire in
accordance with the provisions of Condition 4 of this licence shall be
acquired by PASA at its own cost and expense and the Licensees shall not be
obliged to make any financial contribution in that regard.
20. The Licensees
shall enter into the PASA and Producers (Right of Way) Agreement
contemporaneously with the grant of the within licence, the provisions of
which have been approved by the Minister.
21. The Licensees
shall not use the pipeline, nor shall they cause the pipeline to be used, for
any purpose other than for conveying Product, without the consent in writing
of the Minister first had and obtained.
22. In the event that
the pipeline is no longer operated by the Licensees for the purpose of
transmitting their product extracted from the Cooper Basin region in
accordance with the Project referred to in the Indenture, PASA shall have the
right, but not the obligation, to acquire ownership of the pipeline at a cost
to be agreed at that time. Such cost shall not include any component for or in
relation to any right, title or interest in relation to any real property the
subject of any grant by PASA pursuant to Condition 4 of this licence.
23. The Licensees
shall not at any time remove any part of the pipeline without the consent in
writing of the Minister first had and obtained.
24. The interest of
any individual Licensee pursuant to this licence shall not be assigned,
transferred, sublet, or made the subject of any trust or other dealing,
whether directly or indirectly other than to another Licensee or to a related
corporation of that individual Licensee, without the consent in writing of the
Minister; and any such transaction entered into without such consent shall be
void; providing that any such interest of any individual Licensee may be
mortgaged, charged or otherwise encumbered or made the subject of a security
interest without the consent of the Minister or alternatively with the consent
of the Minister and then subject only to such conditions (if any) as the
Minister may reasonably impose after having due regard to the needs of the
Licensees or any of them to raise finance for the activities contemplated by
this licence on the most favourable terms available.
A mortgagee, chargee or encumbrancee under a mortgage, charge, encumbrance or
other security interest which has been consented to by the Minister as
aforesaid in enforcing its security or any receiver or receiver and manager of
a Licensee thereunder or any transferee or assignee thereof shall in the
exercise of its rights be subject only to such reasonable conditions (if any)
as the Minister shall have imposed at the time of his approval to the creation
of the mortgage, charge, encumbrance or other security interest.
A mortgagee, chargee or encumbrancee under a mortgage, charge, encumbrance or
other security interest which has not been consented to by the Minister as
aforesaid in enforcing its security or any receiver or receiver and manager of
a Licensee thereunder or any transferee or assignee thereof shall not assign,
transfer, sublet or make the subject of any trust or other dealing without the
consent in writing of the Minister.
The Minister may, before consenting to any such transaction, require such
information as he thinks fit with respect thereto, and shall have a discretion
to grant or refuse such consent but shall not capriciously or unreasonably
refuse it and shall not grant any such consent on unreasonable conditions.
Where a transaction has received the consent of the Minister under this
Condition 24 subject to conditions, and any of those conditions is
subsequently satisfied, the Licensees or any of them shall, within
twenty-eight days, serve personally or by post upon the Minister, notice in
writing of that fact.
For the purposes of this Condition "related corporation" shall have the
meaning ascribed to that term in section 6(5) of the Companies
Act 1962-1980.
25. —
(i)
If any individual Licensee purports, without the consent
in writing of the Minister, to assign, transfer or sublet any interest under
this licence or to make such interest the subject of any trust or other
dealing which requires the consent of the Minister as aforesaid the Licensee
shall be in default under this licence.
(ii)
Any purported assignment or transfer of the interest or
part thereof of any individual Licensee pursuant to this licence shall be
subject to the assignee or transferee executing in favour of the State and the
Minister and the other Licensees a deed of covenant in a form to be agreed
between the Minister and the Licensees to comply with, observe and perform the
provisions of this licence on the part of the Licensees to be complied with,
observed or performed in regard to the interest so assigned.
The Minister may require any person who acquires any interest whether legal or
equitable in this licence by virtue of a transaction to which the Minister has
consented under this Condition, to enter into a bond upon such terms and
conditions and in such sum not exceeding $4 000 and to give such security
for the satisfaction of the bond as he may stipulate.
26. Notwithstanding
anything hereinbefore contained, if any one or more of the following events
occurs, namely:
(i)
If any of the Licensees makes default in the due payment
of any moneys payable under this licence to the State or to anyone on its
behalf or to any agency or instrumentality of the Crown and any such default
remains unremedied for a period exceeding thirty days after notice specifying
the default is given to the Licensees and to sub-Licensees (if any) and to all
lenders of money to the Licensees or any of them who have been notified by the
Licensees or any of them to the State in writing (such lenders, whether one or
more, being hereinafter referred to as "the lenders") by the State; or
(ii)
If any of the Licensees makes default in the due
performance of any of its material covenants or obligations under this licence
(not being a covenant or obligation of the kind referred to in sub-clause (i)
of this Condition) and if the relevant Licensee fails to remedy or to commence
and continue in good faith to remedy that default within a reasonable time
after notice specifying the default is given to the Licensees and to
sub-Licensees (if any) and to the lenders by the State
then and in any such events the Minister, after consultation with the
Licensees, (and provided the Licensees not in default have agreed with the
State to assume all of the obligations, including without limitation,
obligations due and unsatisfied in respect of any antecedent breach of the
Licensee or Licensees in default) may determine this licence in respect only
of the Licensee or Licensees in default.
The rights and obligations of that defaulting Licensee or of those defaulting
Licensees under this licence vis-a-vis the State and the Minister shall
thereupon cease and shall ipso facto be assumed by and become the rights and
obligations of the Licensees not in default but in all other respects the
rights and obligations of the Licensees not in default under this licence
shall be unaffected by such determination.
If the Licensees not in default do not agree with the State to assume the
obligations of the Licensee or Licensees in default as aforesaid, or if all of
the Licensees are in default under this licence then the State may cancel this
licence.
Any determination or cancellation of this licence shall be by written notice
to the Licensees and to sub-Licensees (if any) and to the lenders.
27. Upon the
cancellation of this licence under Condition 26 of this licence:
(i)
the rights and obligations of the Licensees to, in or
under this licence shall thereupon cease and determine but without prejudice
to the liability of a Licensee in respect of any antecedent breach or default
by it under this licence; and
(ii)
each Licensee shall forthwith pay to the State all moneys
which then shall have become payable or accrued due by it
and the rights of the Minister shall, subject to sub-clauses (i) and (ii) of
this Condition, constitute the exclusive remedy of the State and the Minister
and of any instrumentality of the State and of any other Minister against the
Licensees not in default and each of them in respect of the said cancellation.
28. The liability of
each Licensee under this licence shall be several and not joint nor joint and
several and the liability of each Licensee shall be determined in accordance
with the extent of its ownership of the pipeline.
Dated this 26th day of November 1981.
Minister of Mines and Energy