Maui Pipeline Capacity Don Gray March 2012

Summary This presentation discusses: Capacity constraints on the Maui Pipeline. The measures that will be taken if available capacity is exceeded. The mechanisms for keeping pipeline throughput within available capacity under a Common Carrier based pipeline regime.

Some History The Maui Pipeline was constructed in the 1970s as a dedicated pipeline to carry gas from the Maui field to the various delivery points required by the Maui Gas Contract. In 2003 the government issued a policy statement requiring an Open Access regime across gas transmission pipelines. The MPOC Open Access regime was negotiated by October 2005. Maui gas now accounts for around 30% of the gas carried by the Maui Pipeline.

Major Points Distance (KM) Welded Point Name Party Receipt (%) Total Delivery (%) Total 0.00 Oaonui MDL 30 43.9 Frankley Road Vector 12 (net) 65.3 Bertrand Road Methanex 3 66.8 Tikorangi 1 Todd 6 Tikorangi 2 15 Kowhai Greymouth <1 67.0 Ngatimaru Road Receipt SENZL 45 Ngatimaru Road Delivery 21 71.0 Turangi 4 114.3 Mokau Compressor 230.8 Pokuru 290.6 Rotowaro 39 299.3 Huntly Power Station Genesis 20

Capacity Constraint The section of the Pipeline south of Mokau collects gas from a number of points. There are large delivery points but they are close to, or contiguous with, receipt points. The lower section of the line is pressure constrained. Operating pressures should be in the range 42-48 bars. The capacity constraint is the pipeline’s ability to deliver gas north of Mokau. This is measured by the flow through the Mokau compressor station.

Capacity Limit The maximum flow through the Mokau Compressor Station, (330 TJ/day) is based on the flow attainable with one compressor operating. There are two compressors at the station to meet the n+1 reliability standard. It is possible to operate both at once and obtain some increase in flow but the level of reliability suffers. MDL reserves the right to curtail nominations when the 330 TJ/day limit is exceeded. The SOP governing this is posted on the MDL IX.

How is Capacity Constrained? If MDL has to reduce flows north of Mokau then it does so by reducing nominations to points downstream. The procedures followed are set out in Section 8 of the MPOC. To simplify greatly, balancing gas and AQ nominations are allocated first then the remaining nominations are pro-rated according to Gross Historical Usage. Gross Historical Usage for a Welded Point is the mean of a Shippers nominations for that point for the previous 12 months.

Actual Flows

Increasing Capacity Decisions on capacity increases depend on the service level required. Since the commencement of open access MDL has never curtailed nominations north of Mokau for capacity reasons. However dry years or further gas-fired electricity generation north of Mokau could lead to a capacity constraint on some days. Expenditure on additional equipment would have to be balanced against the value gained by removing the constraints.

Common Carrier Requirements One of the advantages cited for Common Carrier and some Hybrid systems for pipeline capacity allocation is that all the physical capacity of the pipeline can be used. However: Consideration needs to be given to the control mechanisms needed to make this happen. The complexity of this task can be under-rated.

Common Carrier Requirements To ensure that all available capacity in a pipeline is used, you need: Pipeline users to nominate their expected gas flow in advance. A real-time system that allocates the available capacity and can adjust user’s nominations in advance so that pipeline capacity is not exceeded. The ability to monitor flows at critical points and to compare nominated flows with actual flows. Investment in metering, scheduling and computer systems.

Maui Nomination Cycles Nomination cycles generally require a number of steps: A Shipper placing a nomination for gas transmission between two points on the pipeline. Confirmation from the receipt point that the gas requested is available and the delivery point that it can be accepted. Confirmation from the pipeline operator. The Maui system runs six nomination cycles for each day; week ahead, day ahead and four intra- day cycles.