Invitation to comment on Sunrise Energy’s request to amend ... · 2.5 The PLEM includes allowance...

Invitation to comment on Sunrise Energy’s request to amend its licence

application to construct LPG loading and storage facilities in Saldanha Bay (PPL.sf.F1/88/2009)

The National Energy Regulator (‘NERSA’ or ‘Energy Regulator’) is a regulatory authority established as a juristic person in terms of Section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). NERSA’s mandate is to regulate the electricity, piped-gas and petroleum pipelines industries in terms of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), Gas Act, 2001 (Act No. 48 of 2001) and Petroleum Pipelines Act, 2003 (Act No. 60 of 2003). Sunrise Energy (Pty) Ltd (‘Sunrise’) published its licence application to construct a Liquefied

Petroleum Gas (LPG) loading and storage facilities in Saldanha Bay (Application reference

number PPL.sf.F1/88/2009) for public viewing during the period 15 September 2010 to 18

October 2010.

Subsequently, on 16 November 2010 NERSA held a public hearing to consider the matter. In

its presentation at the public hearing, Sunrise informed the Energy Regulator that it wishes to

amend its licence application. The Energy Regulator is of the opinion that the changes are

material and requested Sunrise to submit the revised documentation reflecting the

amendments sought.

On 6 December 2010 Sunrise submitted the amended documentation to NERSA. The

amendments to the original licence application are available on the NERSA website at

http://www.nersa.org.za under “Petroleum Pipelines > Licences > Applications under

consideration”.

Stakeholders and members of the public are invited to comment on the application in writing.

Requests for confidential treatment of information contained in the comments must be made in

accordance with rule 4 of the Petroleum Pipelines Act Rules, 2009 (GN R. 1072 in GG 32704

of 13 November 2009) (“the Rules”). The Rules are also available on the NERSA website at

http://www.nersa.org.za under “Petroleum Pipelines/Legislation”.

The deadline for comments is 24 December 2010. Written comments must be sent to Mr Thabo Ramanamane at: Post: Petroleum Licensing, Compliance & Dispute Resolution

The National Energy Regulator PO Box 40343

Arcadia Pretoria, 0007

Email: [email protected] Fax: (012) 401-4767 For further information regarding the licence application, please contact: Mr Thabo Ramanamane (012) 401 4082 or Martin Untiedt (012) 401 4799.

Nersa Queries CBM and Land 7dec2010a

Page 1 of | 16

Sunrise Energy Pty Ltd

1 Northbank, 3rd

Floor

Northbank Lane

Century City, Cape Town

7th

December 2010

The Director of Petroleum

Att: Dr Rod Crompton

Copy: Mr Martin Untiedt

Nersa

Kulawula House

526 Vermeulen Street

Arcadia

Pretoria

Ref No: PPL.SF.F!/88/2009

Dear Sirs

Subject: Sunrise Energy License Application for the construction of LPG storage facilities in Saldanha

Bay

Your fax and email of 2nd

December 2010 refers.

Attached please find our response to the queries raised by Nersa in the same chronological order as the

request for information. Please feel free to contact me should you require any further information or

clarification on the contents of the attached submission. We have included some additional information

to aid understanding of the key technical, commercial and environmental issues.

None of the information provided is of a confidential nature and may be used in the public domain.

Thank you and regards.

Nunda Naidoo

Director of Sunrise Energy

Sunrise Energy (Pty) Ltd Registration No. 2005/027952/07 VAT No. 4140253800

t. +27 21 552 9993 f. +27 44 552 9906

No. 1 Northbank, 3rd Floor, Northbank Lane, Century City, 7441, South Africa

PostNet Suite 68, Private Bag X18, Milnerton, 7435

Directors: D Welbourne* (Managing), DH Mzamo, M Shibanda, B Harmse, P Naidoo, Z Burghers (*British)


Page 2 of | 16

For Further Information

EIA PROCESS COMMENCED

The EIA process was kicked off on 17th

November 2010 and two meetings were held with stakeholders

and interested parties in Saldanha Bay with the object of informing the public of the Sunrise Energy’s

intention to pursue the CBM option and use the land indicated on the ArcelorMittal site to construct the

storage bullets.

A CASH offer to purchase (OTP) was signed by Sunrise Energy and is under consideration by

ArcelorMittal.

Sunrise Energy has the necessary funds to purchase the land without having to rely on a bond or outside

funding.

PROGRESS ON FINAL DESIGN AND VESSEL FABRICATION

A rigorous tender and evaluation was done in order to shortlist manufacturers of the storage bullets for

the LPG project. The short list comprises two companies who have been selected.

Directors of Sunrise Energy and contractors will visit fabrication yards in India and Malaysia between 3-8

December 2010 to finalise the details around manufacturing the storage bullets and logistics to get them

to the site.

Effectively, this means that the orders for vessels can be PLACED in within the next 4 weeks to begin

fabrication.


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1 Item No. 1 – Details of Proposed Conventional Buoy Mooring

(CBM) and Pipeline End Manifold (PLEM)

1.1 Drawing no. 1039/01/2001 (Annexure 1) shows the proposed CBM layout.

1.2 The layout consists of four buoys, two off the bow and two off the stern. The number of buoys

required as been determined through numerical vessel motions analysis using TERMSIM.

1.3 The buoys are anchored using 76mm stud link chain (250m) connected to a mass gravity anchor

blocks.

1.4 The design vessel is a 6,000 DWT tanker (131m Length, 20.1m Beam, 8m Draft).

Numerical wave modelling has been undertaken to determine the design and operational

conditions at the proposed site.

1.5 The coordinates for the proposed Pipeline End Manifold (PLEM) and CBM positions are as

follows:

1.5.1 CBM (Mid-point of vessel) = Y+ 93 747.731 X+ 3 656 004.666

1.5.2 PLEM (CH 2100) = Y+ 93 682.916 X+ 36 56 042.402

1.5.3 Co-ordinate system WG19

NOTE: As part of the EIA being done, Sunrise Energy will consider BOTH THE CBM OPTION (preferred) as

well as the Jetty Option.

A Public Meeting was held on 17th

November 2010 in Saldanha Bay to inform stakeholders and affected

parties of the project and the plans to pursue the CBM route. EIA Consultants ERM and PRDW as well as

Sunrise Energy were in attendance to provide feedback and information.


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1.6 The CBM Option has the following advantages over the Jetty

1.6.1 TNPA has extensive experience in providing services to the offshore loading and unloading

facilities including the CBM in Mossel Bay, SPM in Mossel Bay and SPM in Durban (SPM means

SINGLE POINT MOORING).

1.6.2 The CBM will not “sterilise” TNPA jetty space which may be required in future.

1.6.3 Unlike a Jetty which is fixed and more permanent, a CBM is movable and therefore flexible

enough to fit into future port development plans such as a liquid fuel berth.

1.6.4 A CBM requires a minimal amount of construction.

1.6.5 A CBM is significantly cheaper than a Jetty to construct.

1.6.6 A vessel moored to a CBM in big bay is considered to be safer option compared to a vessel

moored on a jetty in a busy working part of the port with activities including (i) the iron ore

loading, (ii) multiproduct terminal handling (MPT), (iii) crude oil unloading, (iv) ship repair yard,

etc.

1.6.7 In the event of an onboard fire the vessel from a CBM can be towed out to sea thereby

reducing the risk to other activities on the Jetty.

1.6.8 The CBM is in a area of very little seagoing traffic, unlike the Jetty.

1.6.9 No dredging is required at the CBM whereas dredging may be required to accommodate larger

vessels in the Jetty.

1.6.10 Larger ships can be accommodated in future given the water depth of 12.5m at the PLEM. This

allows for future growth in market demand.


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1.7 Places in the world where LPG is unloaded and loaded via CBM and sea buoys.

Location Name Type of LPG Marine Terminal

Israel Ashkelon CBM

Turkey Lpragaz Sea Buoy CBM

Turkey BP Gaz Sea Buoy CBM

Turkey Milangaz Sea Buoy CBM

Dominican Republic Coastal Dominican Republic CBM

India Hazira CALM Terminal

Portugal Canical Marine Terminal Madeira CBM

Sri Lanka Shell Lanka CBM

Sri Lanka Colombo SPBM1 & 2, CBM

Turkey Delta CBM


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2 Item No. 2 – Details of Proposed Submarine Pipeline

2.1 Drawing no. 1039/01/2000 shows the proposed submarine pipeline layout (annexure 2).

2.2 The pipeline characteristics are as follows:

2.2.1 A-333 Grade 6 Low Temperature, Carbon Steel

2.2.2 20 bar design pressure

2.2.3 Minus 30 deg C design temperature

2.2.4 12” pipeline diameter

2.2.5 12mm wall thickness

2.2.6 Flow rates: 500 m3/hr (normal) and 750 m3/hr (maximum)

2.3 The pipeline is to be coated with a polypropylene coating (e.g. 3LPP coating)

2.4 Cathodic protection in the form of sacrificial anodes will be provided

2.4.1 he pipeline is to be protected with concrete stabilisation mattresses between the PLEM and the

shore crossing. The pipeline through the shore crossing is to be protected with rock armour.

2.5 The PLEM includes allowance for a pig launcher.

2.5.1 The shore crossing and servitude along which the pipeline will run, is situated on the eastern

side of the existing oyster dam (see drawing no. 1039/01/2000) (Annexure 2).

2.6 The undersea pipeline will be covered with a Smartmat system shown in Annexure 2.


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3 Item 3 – Servitude to be followed by the Pipeline En-Route to Storage Area

LPG

Undersea Line

SFF Crude Oil Pipeline

Existing

Servitude to SFF Tanks

LPG Pipeline to

Storage Area


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3.1 DETAILS OF OVERLAND PIPELINE

3.1.1 From the beach crossing above the pipeline will follow the existing SFF 48” crude line to the SFF

ultra large crude storage way lease servitude over TNPA land to the ArcelorMittal land.

3.1.2 General overland pipeline information

Size, outside diameter 12”

Length (Km) 1.8

Highest elevation above sea level (m) 16

Lowest elevation above sea level (m) 4

Laying method Buried up to B/L

No. of Road Crossing Nil

No. of Railway Crossing Nil


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4 Item 4 – Geographic Location of the proposed Site for the LPG

Facility

4.1 Sunrise Energy analysed several sites in terms of environmental impact, operations, safety and

commercial considerations.

4.2 The ArcelorMittal quarry site has proved to be the most ideal.

4.3 This is damaged quarry site that needs remediation. All of the environmental remediation

obligations have been taken over by Sunrise Energy as per the Offer to Purchase Agreement.

4.4 Excavation on the site during the quarrying operation has left a substantial cavity in the ground

which is ideal for burying the storage bullets. There is a significant cost saving in excavation

and civil works that would have had to be done on an alternate site. THIS FEATURE WILL BOTH

REDUCE THE CIVIL WORKS PROGRAMME while achieving the objectives of remediating the

site.

4.5 From the EIA work done to date, the eastern side of the site is bounded by fynbos and

vegetation classified as very high conservation value.

4.6 Sunrise Energy will use 40-50% of the site only. The results of the EIA study shows that that it

will be extremely difficult to use the remainder of the site for industrial development owing to

the sensitive nature of the plants in the area (refer to the attached Google Map below as well

as X and Y co-ordinates).

4.7 Boundaries selected to completely avoid encroachment on sensitive environmental areas.

4.8 The land survey has been completed by Sunrise Energy.


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4.9 Google Map showing Location of Study Area and proposed LPG Storage Area

Very High

Conservation Value

Medium to HighConservation

Value


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4.10 Sunrise Energy LPG Site X and Y Coordinates


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5 Item 5 – Geographic Location of Proposed Site Showing TNPA Land

5.1 The map below indicates the boundary between TNPA land and the proposed Sunrise Energy

site.

TNPA

Land

ArcelorMittal Land

Preferred Option G2

Sunrise Energy

Site

5.2 Sunrise Energy investigated ALL the options indicated in the above schematic as part of the

technical, commercial and environmental studies.

5.3 G2 is the preferred location of the CBM as presented in this application.


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6 Annexure 1: Drawing indicating the CBM Layout

Extract from consultant’s report indicating CBM layout.


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6.1 Simulation Results of Modelling Vessel navigation up to CBM (using wave, channel and wind

modelling sub-studies)


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7 Annexure 2: Location Details of the Undersea Pipeline Layout

Undersea

Pipeline Routing


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7.1 SUBSEA LINE COVERING AND CATHODIC PROTECTION

The SmartMat is a standard flexible concrete stability mattress integrated with a cathodic protection

system. The system involves casting anodes directly into the individual concrete blocks of the mat and

wiring them to the pipeline with the use of a connection clamp (RetroClamp), as shown below.

SmartMat

Retroclamp

SmartMat

Retroclamp

Invitation to comment on Sunrise Energy’s request to amend ... · 2.5 The PLEM includes allowance...

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