Santos Takes Responsibility for Lytton Oil Spill

The Moonie Pipeline Company, a wholly owned subsidiary of Santos Limited, pleaded guilty in the Queensland Magistrates Court to a charge under the Environmental Protection Act (Qld) 1994 arising out of the rupture of the Moonie to Brisbane oil pipeline and oil spill on March 17, 2003.

Santos was fined $300,000 and no conviction recorded. Santos accepts the court's decision and will not appeal the decision.

"Santos takes its environmental responsibilities very seriously and we deeply regret this incident," said Santos Northern Australia General Manager, Mr. Rod Rayner. "We threw every available resource at alleviating the spill, immediately implementing a comprehensive emergency response plan in conjunction with the Environmental Protection Agency, Emergency Services and the Port of Brisbane Authority.

"The rapid response by all parties meant the impact associated with the oil spill was contained and did not reach the Brisbane River."

The investigation by the EPA identified that there was pre-existing damage to the Moonie to Brisbane pipeline caused prior to 1994.

The pipeline ruptured at the point of the pre-existing damage, below the maximum allowable operating pressure (MAOP) and therefore before the two safety systems would have operated.

At the time of the rupture, investigation work was being undertaken that required the pipeline to be pressurized to a level still well below the MAOP. While the pipeline has a pressure control system it did not operate due to incorrect valve settings.

Mr. Rayner said that since the investigation Santos had implemented several measures to reduce the chances of a spill of this nature occurring again.

These changes include:

installing additional systems that control the pressure within the pipeline;

fitting further alarms;

enhancing the automatic shutdown system; and

further staffing of the Lytton Terminal.

"Santos will continue to work with the EPA to remediate the remaining area affected by the spill," said Mr. Rayner.

In addition to the fine, the Company has covered the total costs for the emergency response, initial clean up and long-term remediation. This is estimated to be in excess of $2 million.