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Australia Pacific LNG Project Appendix M - Greenhouse Gas Management Plan

LNG Facility

AUSTRALIA PACIFIC LNG PTY LIMITED

AUSTRALIA PACIFIC LNG PROJECT

APPENDIX M - GREENHOUSE GAS MANAGEMENT PLAN

LNG FACILITY

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Disclaimer

This report has been prepared on behalf of and for the exclusive use of Australia

Pacific LNG Pty Limited, and is subject to and issued in accordance with the

agreement between Australia Pacific LNG Pty Limited and WorleyParsons

Services Pty Ltd. WorleyParsons Services Pty Ltd accepts no liability or

responsibility whatsoever for it in respect of any use of or reliance upon this report

by any third party.

Copying this report without the permission of Australia Pacific LNG Pty Limited or

WorleyParsons is not permitted.

Revision 1 dated 22 November 2010

APLN-000-EN-R01-D-10176




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Contents

1. Introduction, purpose and scope ........................................................................................ 1

2. Environmental Policy .......................................................................................................... 2

3. Planning ............................................................................................................................. 3

3.1 Coordinator-General Imposed Conditions ......................................................................... 3

3.2 Environmental aspects ....................................................................................................... 3

3.3 Applicable legislation, standards and guidelines ............................................................... 6

3.3.1 Commonwealth government policy position ......................................................... 6

3.3.2 Commonwealth government legislation ................................................................ 6

3.3.3 Queensland Government position ......................................................................... 9

3.4 Objectives and targets ....................................................................................................... 9

4. Implementation strategy ................................................................................................... 14

4.1 Construction ..................................................................................................................... 14

4.1.1 Reduction of GHGs during construction.............................................................. 14

4.2 Operations ........................................................................................................................ 14

4.2.1 Reduction of GHGs from turbines ....................................................................... 14

4.2.2 Reduction of GHGs from flaring .......................................................................... 15

4.2.3 Reduction of GHGs from venting and fugitive emissions .................................... 16

4.2.4 Reduction of GHGs from LNG shipments ........................................................... 16

4.2.5 GHG offset plan ................................................................................................... 16

4.2.6 CO2 recovery plan ............................................................................................... 17

4.3 Resources, roles and responsibilities .............................................................................. 17

4.4 Documentation ................................................................................................................. 20

4.4.1 Record keeping under the NGER Act ................................................................. 20

4.4.2 Record keeping under the under the EEO Act .................................................... 20

4.4.3 Record keeping in relation to the National Carbon Offset Standard ................... 21

5. Monitoring ........................................................................................................................ 22

6. Reporting, auditing and review ........................................................................................ 25

6.1 Reporting .......................................................................................................................... 25

6.1.1 GHG reporting under the NGER Act ................................................................... 25




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6.1.2 Energy Efficiency Opportunity Reporting ............................................................ 30

6.1.3 Reporting under the National carbon offset standard ......................................... 33

6.2 Corrective actions ............................................................................................................ 34

6.3 Auditing ............................................................................................................................ 34

6.4 Management Review ....................................................................................................... 34

7. References ....................................................................................................................... 35

Figures

Figure 6.1 National Greenhouse and Energy reporting thresholds for facilities and corporations .... 27

Figure 6.2 Upper limits for amounts of GHGs and energy data that may be considered incidental .. 30

Figure 6.3 Process for EEO reporting ................................................................................................ 31

Figure 6.4 EEO Assessment and Reporting Cycle ............................................................................ 33

Tables

Table 3.1 Summary of potential impacts, their causes, mitigation and management measures and

the residual risks ................................................................................................................................... 4

Table 3.2 List of GHG objectives, targets and performance indicators .............................................. 10

Table 4.1 Staff roles and responsibilities in relation to GHG management ....................................... 18

Table 5.1 Monitoring activities for reportable GHG sources and emissions ...................................... 22

Table 5.2 Monitoring activities for some scope 3 GHG sources and emissions ................................ 24




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1. Introduction

The overall greenhouse gas (GHG) management objective is to contribute to reducing global GHG

intensity by producing LNG which can substitute for higher GHG intensive fuels. Australia Pacific LNG

will seek to minimise the GHG intensity of LNG production during construction, commissioning and

operational phases of the LNG facility.

This document describes Australia Pacific LNG’s approach to GHG management by:

• Giving an overview of Australia Pacific LNG’s environmental policy in relation to GHG

management.

• Outlining the various GHG related environmental aspects associated with the activities and

products of the LNG facility.

• Discussing the applicable Commonwealth and Queensland government policy and legislation.

• Discussing Australia Pacific LNG’s objectives, targets and programmes for mitigating GHG

emissions at the LNG facility during construction, commissioning, and operations phases.

• Describing the implementation and operation of the plan including who is responsible.

• Discussing additional GHG mitigation measures such as a biodiversity offset strategy which will

generate GHG offsets.

• Describing the monitoring, evaluation and auditing to be undertaken to demonstrate that all

construction, commissioning and operational activities comply with the requirements of this

plan.

• Describing the management review and continuous improvement to be implemented.




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2. Environmental Policy

Australia Pacific LNG recognises that climate change poses significant risks to its business, but this

also offers opportunities to improve environmental performance. Australia Pacific LNG will be pro-

active in building a business that will be well-positioned in a low-carbon economy. Origin’s and

ConocoPhillips’ established corporate strategies on climate change will underpin Australia Pacific

LNG’s response to the challenges of climate change.

Origin has long recognised the need to address the global issues of climate change, and has built a

business that is well-positioned in a more carbon-constrained regulatory, social and investment

environment. Origin has a strong portfolio of natural gas reserves in Australia and New Zealand and

invests in renewable energy sources including wind, solar and geothermal. Origin has developed a

series of retail offerings, such as GreenPower, to encourage customer participation in GHG

reductions.

Origin has engaged strongly in the development of government policy in relation to mitigating GHG

emissions and reducing the impacts of climate change. This includes contributions to the Garnaut

Review (Garnaut 2008), the Carbon Pollution Reduction Scheme and other government processes,

and participation in the media and public debate. Origin has also taken significant measures to

understand and reduce its carbon footprint.

With operations around the globe, ConocoPhillips seeks to encourage external policy measures at the

international level that deliver the following principles:

• Slow, stop and ultimately reverse the rate of growth in global GHG emissions.

• Establish a value for carbon emissions, which is transparent and relatively stable and sufficient

to drive the changed behaviours necessary to achieve targeted emissions reductions.

• Develop and deploy innovative technology to help avoid or mitigate GHG emissions at all

stages of the product’s life.

• Ensure energy efficiency is implemented at all stages of the product’s life.

• Recognise consumer preference for reduced GHG-intensive consumption, and work towards

meeting these expectations.

• Deploy carbon capture and storage as a practical near-term solution if technically and

economically feasible.

• Develop processes that are less energy and material intensive.

• Build price of carbon into base-case business evaluations.

• Ensure energy and materials efficiency is part of the project development/value improvement

processes.

The project will use the commitment and technical strengths of both of its co-venturers to develop and

implement a GHG management plan that includes GHG mitigation measures, monitoring, reporting,

and assessment of business-specific actions.




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3. Planning

3.1 Coordinator-General Imposed Conditions

The Coordinator-General’s Imposed Conditions describe the specific management objectives for the

GHG management plan:

• To describe the GHG emissions policy.

• To describe the energy efficiency program.

• To describe the continuous improvement program.

• To describe the improvements in control systems.

• To develop a CO2 recovery plan.

3.2 Environmental aspects

Explicit throughout the terms of reference (TOR) for the environmental impact statement (EIS),

Australia Pacific LNG was required to identify and manage any adverse construction, operation and

decommissioning impacts that its coal seam gas (CSG) to liquefied natural gas (LNG) project may

create. The identification and management of these impacts was undertaken through a risk

assessment.

Risk assessment is a process that evaluates the likelihood (probability and exposure) and

consequences (magnitude) of positive and negative environmental effects occurring as a result of

exposure to one or more hazards.

The EIS for the LNG facility presented a risk assessment as part of the greenhouse gas assessment.

The risk assessment identified each environmental aspect and the causes for the impact associated

with each project aspect. The mitigation and management measures were described and the residual

risk from each impact was assigned a rating if the impact materialised. The risk assessment was

undertaken based on the project design developed in the EIS. Table 3.1 summarises the results of the

risk assessment.

The potential impact is the release of GHGs to the environment and their likely long-term impact on

global climate change. The causes for the GHG emissions were found to have arisen from the

construction and operation activities associated with the LNG facility. Mitigation measures were

developed to specifically reduce GHG emissions from these sources and the residual risk was

assessed.

In general, the residual risk was found to be low or negligible for each impact. A risk matrix that

describes each level of risk in terms of likelihood and consequence is given in the Table 4.6, Chapter

4, Volume 1 of the Australia Pacific LNG Project EIS.



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Table 3.1 Summary of potential impacts, their causes, mitigation and management measures and the residual risks

Potential impacts Possible causes Mitigation and management measures Residual risk level

GHG emissions to the

atmosphere; potential long term

climate change impacts

Operation of construction machinery

and transport equipment hauling

Optimise transport logistics to reduce energy consumption, and use fuel

efficient vehicles and machinery where practicable

Low

Operation of gas liquefaction facilities

(power generation and refrigeration

turbines)

Use high efficiency turbines that produce lower GHG emissions.

Install waste heat recovery units to meet the process heat requirements of

the LNG facility

Low

Transportation of people, construction

materials and liquefied natural gas

Optimise transport logistics to reduce energy consumption and use fuel

efficient ships

Negligible

Flaring and venting CSG during

maintenance and process upsets

Reduce flaring by capturing liquefied natural gas boil off gases from normal

ship loading using boil-off gas compressors.

Activating the spare gas compressor to avoid flaring when a compressor is

down for maintenanceDevelop and implement plans for preventative

maintenance and operational efficiencies to reduce flaring

Low

Low

Embedded energy in materials Consider less energy intensive construction materials during design phase

of the Project

Low

GHG emissions from LNG facility

processes and other indirect

emissions such as third party and

worker transportation

Develop and implement a GHG management plan to monitor and assess

GHG emissions from the Project. Use this plan to define and execute

actions to reduce GHG emissions

Low

Land clearing releases CO2 and Land clearing for construction of Progressively rehabilitate cleared areas as described in Volume 4 Chapter Low




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Potential impacts Possible causes Mitigation and management measures Residual risk level

reduces CO2 uptake project infrastructure 8 of the EIS.

Develop biodiversity offset strategy which will generate GHG offsets




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3.3 Applicable legislation, standards and guidelines

The Commonwealth and Queensland governments have developed policy, strategy and legislation in

relation to the management of GHGs. Much of the policy landscape is still uncertain, especially at the

Commonwealth level. However, Australia Pacific LNG has taken a proactive approach to finding

technological solutions to reducing its GHG emissions, as well as considering biodiversity offsets.

Australia Pacific LNG has chosen this approach so that they will be well-positioned in terms of their

GHG liabilities once the policy landscape is clear.

3.3.1 Commonwealth government policy position

Prior to the 21 August 2010 Commonwealth election, the proposed carbon pollution reduction scheme

(CPRS) was the Australian Government’s central policy instrument for reducing the GHG emissions

Australia produces. This was to be an emissions trading scheme in which GHG emissions would be

capped, permits would be allocated up to the cap, and emissions permits would be traded. Liable

entities would have been required to obtain carbon pollution permits to acquit their GHG emissions

liabilities. The Commonwealth Government intended that the CPRS would commence on 1 July 2011.

However the CPRS Bills were defeated in August and December 2009, and in May 2010 the CPRS

was delayed until at least 2013. Since the 21 August 2010 Commonwealth election, the GHG policy

landscape in relation to the remains CPRS uncertain.

If the CPRS or similar scheme to regulate GHG emissions is introduced, Australia Pacific LNG will

likely have a liability in respect of GHG emissions permits.

Despite the policy uncertainties, the Commonwealth government has retained:

• A long term GHG reduction target of 60% of 2000 levels by 2050.

• An unconditional medium term GHG reduction target of 5% below 2000 levels by 2020.

3.3.2 Commonwealth government legislation

The NGER Act (2007)

The National Greenhouse and Energy Reporting Act 2007 (NGER Act) establishes a national

framework for Australian corporations to report GHG emissions, and energy consumed and produced

from 1 July 2008. The NGER Act and supporting systems are administered by the Commonwealth

Department of Climate Change and Energy Efficiency. The NGER system was also designed to

provide a robust database for the proposed CPRS.

From 1 July 2008, corporations are required to report if:

• They control facilities that emit 25,000 tonnes or more GHGs in CO2-e units, or produce or

consume 100 terajoules or more of energy.

• Their corporate group emits 50,000 tonnes CO2-e, or produces or consumes 200 terajoules or

more of energy for 2010-11 and beyond.




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Companies must register by 31 August and report by 31 October following the financial year in which

they first exceed a threshold. A report must be submitted every year once registered even in those

years where the threshold is not triggered. Origin and ConocoPhillips report under the National

Greenhouse and Energy Reporting Act (2007), and so both partners in Australia Pacific LNG are

familiar with the Act's requirements.

Australia Pacific LNG proposes to use the NGER system under which the LNG facility will report its

GHG emissions following project start-up. Refer to section 6 for details of NGERS reporting

requirements.

Energy Efficiency Opportunities Act (2006)

The Energy Efficiency Opportunities Act 2006 (EEO Act) was introduced by the Department of

Resources, Energy and Tourism (DRET). It requires significant energy users, consuming over 0.5 PJ

per annum of energy, to take part in a transparent process of energy efficiency assessment and

reporting.

The program’s requirements are set out in the legislation, which came into effect on 1 July 2006.

Participants in the program are required to assess their energy use and report publicly on cost

effective opportunities to improve energy efficiency. In particular, corporations must report publicly on

opportunities with a financial payback period of less than four years. Australia Pacific LNG joint

venture partners Origin Energy and ConocoPhillips have been reporting under the energy efficiencies

opportunities scheme since 2006 and 2007 respectively, so both partners in Australia Pacific LNG are

familiar with the scheme's requirements.

Australia Pacific LNG proposes to use the EEO program to assess its energy use and to quantify the

opportunities identified to save energy at the LNG facility following project start-up. Refer to section 6

for details of EEO reporting requirements.

National Carbon Offset Standard (NCOS)

NCOS is a voluntary standard that took effect from 1 July 2010. The NCOS is intended to provide a

benchmark for consumers and businesses to assess claims of carbon neutrality or the credibility of

offset products available for sale in the voluntary carbon market.

The following units are currently accepted under the NCOS for the purposes of voluntary carbon

offsetting:

• Carbon Pollution Reduction Scheme (CPRS) permits, known as Australian Emissions Units

(AEUs), including those issued for forestry projects and any offsets allowed under the CPRS (if

it is introduced).

• Other units accepted for compliance under the CPRS which include the following units

generated under the United Nations Framework Convention on Climate Change (UNFCCC)

flexible mechanisms:

− Certified Emissions Reductions (CERs), excluding temporary (tCERs) and long term

(lCERs) CERs

− Emission Reduction Units (ERUs); and Removal Units (RMUs)

− Voluntary Emissions Reductions (VERs) issued by the Gold Standard




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• Voluntary Carbon Units (VCUs) issued by the Voluntary Carbon Standard, including credits

issued for agriculture, forestry and other land use (AFOLU) and reduced emissions from

deforestation and degradation (REDD) projects, where they apply methodologies approved by

the Australian Government.

• Offsets generated from emissions sources in Australia not counted toward Australia’s Kyoto

Protocol target and using a methodology that has been approved by the Australian

Government.

Under the NCOS, offset projects may be developed within Australia from emissions sources and sinks

currently not counted towards Australia’s obligations under the Kyoto Protocol target, such as:

• Enhanced forest management (the management of forests established before 1990).

• Cropland and grazing land management (net greenhouse gas emissions from soil, including

biochar, crops and vegetation on cropland and grazing land).

• Revegetation (establishment of vegetation that does not meet the Kyoto Protocol definitions of

afforestation and reforestation).

Methodologies for producing offsets from these emissions sources must be proposed and approved

under the NCOS before offset projects can be implemented.

Domestic offset projects must meet the following eligibility criteria:

• Additional - GHG reductions generated by the LNG facility must be beyond what would be

required to meet regulatory obligations under any Australian laws or regulations or undertaken

as part of ‘business-as-usual’ investment. The level of additional emissions reductions

generated by an offset project is the difference between the emissions associated with the LNG

facility (‘project emissions’) and emissions under a business-as-usual scenario.

• Permanent - GHG reductions must be permanent. In the case of sinks, this requires that the

carbon stored is sequestered and will not be released into the atmosphere in the future.

• Measurable - methodologies used to quantify the amount of emissions reductions generated

must be robust and based on a defensible scientific method. Methodologies must clearly define

a boundary for the emissions reduction project, emissions sources and emissions factors and

activity levels. They must specify the calculation of a baseline emissions forecast reflecting

business-as-usual and the means of comparing it to expected emissions from the project to

determine the carbon offsets generated. The methodology must specify the uncertainty

associated with the calculation of offsets generated. It should also specify the risks associated

with achieving the forecast abatement and how they will be managed.

• Transparent - consumers and other interested stakeholders must be able to examine

information on domestic offset projects, including the applied methodology, emissions

calculations and project monitoring arrangements, by accessing a publicly available website.

The information provided should clarify data sources, exclusions, inclusions and assumptions.

• Independently audited - eligibility of methodologies, offset projects and GHG emissions

reductions generated must be audited by an independent third party. Existence of a conflict of

interest should be determined. Further information on audit requirements is provided under the

Audit section.




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• Registered - emissions reduction units generated must be registered and tracked in a publicly

transparent registry. The equivalent number of eligible units to offset the total emissions

associated with any product or organisation (or specified part of an organisation) should be

voluntarily surrendered and retired into a registry. Registry arrangements for the domestic

offsets generated under the NCOS will be determined as part of the NCOS administrative

framework. Administrative arrangements are yet to be finalised.

The NCOS will be reviewed on an annual basis and updated as required to reflect changes in

Australian standards and legislation, international standards, best practice, domestic and international

carbon markets and international emissions accounting rules.

3.3.3 Queensland Government position

The Queensland Government’s ClimateSmart 2050 strategy (2007) outlines key long-term climate

change targets. The Queensland Government has agreed to the national target of achieving a 60%

reduction in national GHG emissions by 2050, compared with 2000 levels. This will involve cuts in

GHG emissions of more than 30 Mt CO2-e over 10 years and save the Queensland economy about

$80 million each year (Queensland Government 2007).

To help achieve this target, the Queensland Government has developed the Queensland gas scheme,

where Queensland electricity retailers and large users of electricity are required to source at least 13%

of their electricity from gas-fired generators.

The gas scheme is aimed at reducing Queensland’s emission intensity from 0.917 tonnes CO2-e/MWh

(2000-2001 levels) to 0.794 tonnes CO2-e/MWh by 2011-2012. The 13% target under this scheme has

been increased to 15% by 2010 with the provision to increase it to 18% by 2020.

It should be noted that the LNG facility will generate its own power from natural gas, which will assist

the Queensland government to meet its 2020 objective of 18% power generated from natural gas.

In 2008 the Queensland Government commenced a review of Queensland’s climate change strategies

in response to national and international developments in climate change science and policy. In

August 2009, the Queensland Government released ClimateQ: toward a greener Queensland. This

strategy consolidates and updates the policy approach outlined in ClimateSmart 2050 and

Queensland's ClimateSmart Adaptation Plan 2007-12. The revised strategy presents investments and

policies to ensure Queensland remains at the forefront of the national climate change response

(Queensland Government 2009).

3.4 Objectives and targets

The overall GHG management objective is to contribute to reducing global GHG intensity by producing

LNG which can substitute for higher GHG intensive fuels. Australia Pacific LNG will seek to minimise

the GHG intensity of LNG production during construction, commissioning and operational phases of

the LNG facility. To minimise the GHG intensity of LNG production, the following objectives, targets

and performance indicators are given in the table below.




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Table 3.2 List of GHG objectives, targets and performance indicators

Project

Phase

Objective Target Performance indicator(s)

Operation To minimise GHG emissions during LNG facility

operation

For operations at the LNG facility at Curtis Island, achieve a

GHG intensity of 0.31 tonne CO2-e/tonne LNG produced

GHG intensity of LNG facility

Measure GHG emissions of all operations

and tonnes LNG produced

Construction To use fuel efficient vehicles and machinery

where practicable and optimise transport

logistics (of people and equipment) to reduce

fuel consumption

For on-site diesel consumption for transport, achieve GHG

emissions of approximately 15,000 tonnes CO2-e per annum

over the 4.75 year construction period

For on-site diesel consumption for power generation, achieve

GHG emissions of approximately 57,000 tonnes CO2-e per

annum over the 4.75 year construction period

Annual volumes of diesel and other fuels

consumed.

Reporting volume of fuels consumed and

GHG emissions under NGERS

Design/Constru

ction

To reduce the use of energy intensive

construction materials during design phase of

the LNG facility

Minimise the embedded energy related GHG emissions.

As a guide, the lifecycle GHG emission intensities for the

following materials are:

-galvanised steel; 2.7 kg CO2-e/kg

-concrete; 0.13 kg CO2-e/kg

-copper cable; 3.8 kg CO2-e/kg

-insulation; 1.35 kg CO2-e/kg

Note, these intensities will vary depending on the region in

which the materials were produced. These intensities ignore

transport-related emissions.

Life cycle greenhouse gas emissions of

major materials and their alternatives

during the detailed design phase




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Project

Phase


Construction To minimise land clearances during construction

of LNG facility infrastructure to limit releases of

GHGs

Develop a biodiversity offset strategy which will

generate GHG offsets such as biosequestration

opportunities

Progressively rehabilitate cleared areas

Complete a review of practicable GHG offsets option

completed prior to operations commencing

Minimise the GHG emissions from land-clearing

Offset all GHG emissions associated with land clearing and

some of the other project emissions.

Area of land to be cleared for construction

GHG emissions associated with land

clearing

The number of GHG offsets created

GHG offset study report and

recommendations

Progress selection and implementation of

acceptable offset projects

Commissioning To minimise GHG emissions from gas flaring

Use less than the benchmark quantity of gas to start up each

LNG train

Fully assess the options of ground flaring versus elevated

flaring during detailed design phase.

Volume of gas flared.

Option assessment report

Operations To minimise GHG emissions from routine and

non-routine gas flaring

Achieve a GHG intensity of 0.015 tonnes CO2-e/tonne LNG

produced. This covers all flaring activities such as dry, wet,

and marine flaring, and non-routine gas flaring.

Reduce GHG emissions by approximately 100,000 tonnes

CO2-e per train per year by capturing LNG boil-off gases

Volume of gas flared

Reporting annual GHGs, and energy

consumption and production for gas flaring

under NGERS.

Operations To reduce GHG emissions from refrigeration

compressor and power generation turbines

using high efficiency turbines. To be achieved by

selecting generator and compressor turbines

For the refrigerator compressors, reduce GHG emissions by

25% compared with commonly used Frame 5D turbines -

achieve a GHG intensity of 0.2 tonnes CO2-e/tonne LNG

produced

Volume of fuel gas consumed for power

generation

Audit assessments




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Project

Phase


based on benchmarked GHG emissions

intensity, and perform optimisation of the

number and mode of operation of the power

generation turbines

For the power generation turbines, achieve an intensity of

0.03 tonnes CO2-e/tonne LNG produced

During periods where ship-loading is occurring, achieve an

intensity of 0.055 tonnes CO2-e/tonne LNG produced

Energy consumption and energy efficiency

reporting under the EEO Act

Annual reporting of GHGs (tonnes CO2-e)

and energy production and consumption

from natural gas for combustion for power

generation and refrigeration turbines under

NGERS

Operations To minimise GHG emissions from heating the

hot oil and the dehydration systems using

recovered waste heat

Reduce GHG emissions by approximately 63,000 tonnes

CO2-e per train per annum

Achieve an intensity of 0.004 tonnes CO2-e/tonne LNG

produced

Audit assessments

Energy consumption and energy efficiency

reporting under the EEO Act

Annual reporting of GHGs, and energy

consumption and production data

associated with the hot oil system under

NGERS

Operations To minimise GHG emissions from acid gas

venting and GHG impurities in vented nitrogen


produced for vented acid gases


produced for vented nitrogen

Volumes of gases vented

Audit assessments

Annual reporting of GHGs, and energy

consumption and production data

associated with the acid gas rejection unit

under NGERS

Operations To optimise LNG shipment logistics to reduce For ships powered by gas only, achieve a GHG intensity of Volume of fuel(s) consumed in shipping




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Project

Phase


energy consumption –e.g. LNG ships and routes

selected based on benchmarked fuel efficiency

0.43 kg CO2-e/kWh of shipping power required. From the

EIS, estimated 0.12 tonnes CO2-e/tonne LNG shipped

Dual fuel (fuel oil/gas) powered ships should achieve a GHG

intensity of 0.53 kg CO2-e/kWh of shipping power required.

Fuel oil powered ships should achieve a GHG intensity of

0.63 kg CO2-e/kWh of shipping power required




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4. Implementation strategy

4.1 Construction

4.1.1 Reduction of GHGs during construction

The GHG emissions will primarily arise from use of construction machinery and site vehicles, and

vehicles used in transporting people and construction materials.

Engineering controls include:

• Selecting fuel efficient vehicles and machinery.

• Assessment of construction techniques to determine the most fuel efficient and least GHG

intensive methods, i.e. on-site versus modular construction.

• Assess alternative fuels will e.g. CNG, LNG, LPG and biodiesel versus diesel and petrol.

• As GHG emissions will arise from land-clearing for construction, cleared areas will be

progressively rehabilitated.

Operational controls include:

• Back-loading of trucks and sourcing materials and services from local suppliers.

• Operating the vehicles and machinery in a fuel efficient manner e.g. on-site vehicles to be

operated at an optimal speed, and no idling for extended periods.

4.2 Operations

4.2.1 Reduction of GHGs from turbines

Australia Pacific LNG has an objective to reduce the GHG intensity of its production processes. The

liquefaction/refrigeration process is highly energy intensive and it is therefore a key area where energy

efficiency improvements will focus on an ongoing basis.

Annual baseline calculations of GHG emissions (tonnes CO2-e) from turbine exhaust stack emissions

will be performed during first year of operations, to verify actual plant performance against design

basis. Volume of fuel gas consumed will also be monitored. Frequency of testing will be adjusted

based on results when compared to project design criteria and vendor equipment performance

specifications.


• Install waste heat recovery units on gas turbine exhausts. This will provide heat for the hot oil

system and the dehydration regeneration gas system for two of the refrigeration gas turbines.

• Use GE LM2500+G4 aero-derivative gas turbines are among the most fuel efficient turbines

available. Frame 5D turbines operate with 30.3% thermal efficiency and the GE LM2500+G4

operate with 41.1% thermal efficiency. The GE LM2500+G4 produce 26% fewer GHG

emissions.




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• Implement inlet air-cooling, which will improve the efficiency of the turbines over a wide range of

operating temperatures and humidities.


• Optimising the number, type and rating of power generation gas turbines depending on the

optimisation of power requirements.

• Optimising turbine operating conditions, project phasing, reliability, GHG emissions and

capital/operating costs.

These optimisation processes will be part of a continuous improvement process.

4.2.2 Reduction of GHGs from flaring

Australia Pacific LNG proposes to use a ground flare similar to that currently used at ConocoPhillips’

Darwin LNG facility. This type of flare burns more cleanly than the conventional elevated pipe flare

and results in fewer GHG emissions overall. Australia Pacific LNG will perform a detailed comparison

of ground and elevated flaring GHG emissions. An assessment report will be generated detailed the

preferred options.

During commissioning of each train, the amount of gas needed for train start-up will be carefully

assessed to reduce GHGs from flaring.

Baseline calculations of annual routine and non-routine flaring volumes will be conducted from the first

year of operations to verify actual plant performance against design predictions. A comparison of

actual versus predicted annual flaring volumes will be used to define total annual flaring volume

reduction targets for subsequent years.

Baseline calculations of annual routine and non-routine flaring contributions to GHG emissions (tonnes

CO2-e) from first year of operations will be performed. This data will be used to verify actual plant

performance against design GHG emissions calculations. The annual GHG intensity target (tonnes

CO2-e)/tonne LNG production) for subsequent years will be defined on this basis

Engineering controls include recovering the boil-off gas from LNG storage and ship loading rather than

flaring it.


• The Australia Pacific LNG Plant asset management system.

• A dry and wet flare system start-up and operating procedure.

• Marine flare start-up and operating procedure.

• Australia Pacific LNG Marine Terminal Handbook to minimise night-time flaring during LNG

offloading.

• Activating the spare gas compressor to avoid flaring when a compressor is down for

maintenance. A spare gas compressor will be piped into the system so that in the event of

maintenance being required on the other compressors, the spare can be utilised instantly. This

reduces GHG emissions by continuing gas compression rather than flaring the unused CSG.

• A leak detection program and a strategy to minimise plant shutdowns.




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4.2.3 Reduction of GHGs from venting and fugitive emissions

Fugitive emissions of methane arise from equipment including piping connectors, valves, pumps and

flanges. Vented emissions arise from the acid gas rejection unit, the nitrogen rejection unit, and from

equipment maintenance venting.

Baseline calculation of annual routine and non-routine venting volumes will be conducted from first

year of operations to verify actual plant performance against design predictions. A comparison of

actual versus predicted annual vented volumes will be used to define total annual venting volume

reduction targets for subsequent years.

Baseline calculations of annual routine and non-routine venting contributions to GHG emissions

(tonnes CO2-e) from first year of operations will be performed. This data will be used to verify actual

plant performance against design GHG emissions calculations. The annual GHG intensity target

(tonnes CO2-e)/tonne LNG production) for subsequent years will be defined on this basis.


• Thermally oxidising the methane in the rejected nitrogen stream.

• Thermally oxidising the methane in the rejected acid gas stream.

• Plant design (valve specifications, flange minimisation).

It is proposed that regular energy audits be conducted to evaluate and benchmark energy use and to

identify energy efficiency opportunities. These will be evaluated, and once developed; those

opportunities with sound business cases will be implemented in accordance with Australia Pacific

LNG’s business plan and EEO guidelines.

4.2.4 Reduction of GHGs from LNG shipments

LNG transport via ship is a large source of scope 3 emissions for Australia Pacific LNG. The estimates

from the EIS suggested that GHGs from LNG shipments could be of the order of two million tonnes

CO2-e annually.

The key operational control will be to assess the ship’s fuel efficiency. Heede (2006) developed GHG

intensities for LNG shipping based on the GHGs per kWhr of power required for the journey,

depending upon the fuels used. The following are GHG indicators of ship performance that could be

used in ship selection (amongst others):

• As only: 0.43 kg CO2-e/kWhr.

• Dual fuel (fuel oil/gas): 0.53 kg CO2-e/kWhr.

• Fuel oil 0.63 kg CO2-e/kWhr.

To further reduce fuel consumption and GHG emissions, routes to major ports will be optimised using

satellite navigation/GPS.

4.2.5 GHG offset plan

It is expected that the GHGs associated with land clearing and some of the project emissions will be

offset to some degree.




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Review and evaluation of greenhouse gas emission offset opportunities will be an on-going part of the

GHG management plan for the Australia Pacific LNG facility during its operational lifetime. Details of

selected emission offset projects will be included in the strategy that will be submitted to the

Commonwealth Department of Environment, Water, Heritage and the Arts (DEWHA), the Queensland

Department of Environment and Resource Management (DERM) and the Department of Employment

Economic Development and Innovations (DEEDI). These departments have confirmed that terrestrial

and marine offsets will be required to compensate for significant unavoidable impacts of land-clearing.

The key measures are to:

• Develop a biodiversity offset strategy which will generate GHG offsets such biosequestration

projects.

• The offset strategy for domestic offsets will include an assessment of the additionality,

permanency, measurability, transparency, independent auditing and registration of offsets as

required under the National Carbon Offsets Standard.

• Prepare a GHG offset options study report prior to operations commencing at the LNG facility.

• Recommendations from the report will be used as the basis for selection and implementation of

acceptable offset projects.

Given the spatial extent of the Project and its various components, it is proposed that offset properties

will be largely located within 100km of the study area defined in the EIS.

4.2.6 CO2 recovery plan

Before conversion to LNG, the coal seam gas contains about 1% CO2. The current design uses a-

MDEA to remove the CO2 from the CSG.

A CO2 recovery plan will be developed that considers the following:

• A study to consider the options for enhanced recovery of CO2 from the CSG e.g. using the latest

alternative CO2 absorbents. Solvents should avoid co-releases of methane.

• The installation of equipment which is carbon capture ready. However, at present there are

there are no feasible reservoirs for CO2 storage currently available.

• Develop an CSG-LNG industry response for CO2 re-use. Consider feasibility of re-use options

such as enhanced oil recovery or piping CO2 back to CSG fields to enhance CSG recovery.

Investigate synergies with local industries for CO2 use.

4.3 Resources, roles and responsibilities

Responsibility for day-to-day operations of the LNG facility will be assigned to the Australia Pacific

LNG Environmental Manager. The Environmental Manager will be responsible for ensuring that the

requirements of the Environmental Management Plan (EM Plan) and the Health, Safety and

Environmental Management System (HSEMS) are effectively implemented. Technical support is

provided by the Australia Pacific LNG Operations Team. This responsibility also includes the regular

review and update of the EM Plan and other HSEMS documentation to ensure that they reflect current

activities and policy requirements.




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In relation to GHG reporting under the NGER Act and energy usage/energy efficiency reporting under

the EEO Act, the roles and responsibilities for the following Australia Pacific LNG staff have been

identified in Table 4.1 below. The specific GHGs to be reported and their frequency are described in

more detail in Section 5. Specific reporting timelines under the EEO Act and the NGER Act are

described in section 6.

Table 4.1 Staff roles and responsibilities in relation to GHG management

Reporting

requirements

Accountable Project leader Data to be gathered and

reported

Actions

Energy Efficiency

under the EEO

Act

LNG facility

Operations

Centre Manager

Senior Process

Engineer

Energy usage data

Identify and evaluate energy

efficiency opportunities.

Cost and payback periods for

each opportunity

Annual review of

identified energy

efficiency

opportunities

Conduct energy

efficiency assessment

Gather energy data

and manage

verification and audit

of data

Register to report if

threshold is triggered

GHG reporting

under the NGER

Act

Internal report to

Australia Pacific

LNG Corporate

HSE Manager

Environmental

Supervisor

Volume of gas flared (routine

and non-routine flaring)

Volumes of gas from process

venting (acid gas removal

unit, NRU gas venting)

Volumes of gases released

from fugitive emissions from

LNG processing equipment

Volumes of fuel consumed

(diesel and fuel gas) from

power generation turbines,

and refrigeration compressor

gas turbines

Volumes of fuel consumed

(diesel and petrol) from site

vehicles and construction

machinery

Collect relevant data,

calculate GHG

emissions, energy

production and

energy consumption

data (see section 6

for details) using the

GHG and energy

reporting system.

Register with

Greenhouse and

Energy Data Officer

to report by 31

August in the year

after NGER

thresholds have been

triggered.

Manage verification

audit of greenhouse

and energy data prior

to 31 October




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Reporting

requirements


reported

Actions

Report data to the

Department of

Climate Change and

Energy Efficiency by

October 31 August in

the year after NGER

thresholds have been

triggered

Scope 3 GHGs for

internal report to

APLNG Corporate

HSE Manager

Environmental

Supervisor

Fuels consumed (fuel oil and

natural gas) by LNG ships

Masses of construction

materials for embedded

energy related GHG

emissions; emission factors

for each material

Collect relevant data,

calculate GHG

emissions for internal

reporting.

Reporting GHG

intensity to

APLNG Corporate

HSE Manager

Environmental

Supervisor

All flaring activity, power

generation turbines, and

refrigeration compressors,

process vents and fugitive

emissions

Volumes of gas vented.

volumes of fuels combusted ,

production volumes (LNG,

fuel gas)

Calculate GHG

Intensity (tonnes

GHG emitted per

tonne production).

Publish data in the

Annual report for

preceding calendar

year (1 January to 31

December) to be

completed by 1 May

Identifying GHG

reduction

opportunities

LNG facility

Operations

Centre Manager

Environmental

Supervisor

Identify GHG reduction

opportunities via workshops

Volume of GHG reductions

Internal reporting on

an Annual basis.

Management Team to

review opportunities

to facilitate

continuous

improvement of the

GHG Management

Plan

Carbon offset

projects

HSE Manager

Environmental

Supervisor

Identify carbon offset projects

Volume and type of offsets

generated and purchased

Manage offsets

(purchase and

retirement of offsets)

Reporting offset

activities




LNG FACILITY

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Reporting

requirements


reported

Actions

Manage verification

and audit of offsetting

projects

4.4 Documentation

4.4.1 Record keeping under the NGER Act

Australia Pacific LNG will be required to keep records for seven years from the end of the reporting

year in which the activities recorded took place. This means that records for the 2010–11 reporting

year should be kept until the end of 2017–18.

Records that will be kept include any information that can be used to verify the relevance,

completeness, consistency, transparency and accuracy of reported data during an external audit.

Records to be retained include:

• A list of all sources monitored.

• The activity data used for calculation of greenhouse gas emissions for each source, categorised

by process and fuel or material type.

• Documentary evidence relating to calculations—for example, receipts, invoices and details of

payment methods.

• Documentation of the methods used for greenhouse gas emissions and energy estimations.

• Documents justifying selection of the monitoring methods chosen.

• Documentation of the collection process for activity data for a facility and its sources.

• Records supporting business decisions, especially for high-risk areas relating to reporting

coverage and accuracy.

When facility-specific emissions factors are used, records will document the monitoring methods used

and the results from the development of these emissions factors, as well as information such as

biomass fractions and oxidisation or conversion factors.

Records can be kept on paper or in electronic form. They should, however, be stored in a format that

is accessible to the Greenhouse and Energy Data Officer or external auditors if required. Australia

Pacific LNG will consult AS ISO 15489 (the Australian and international standard for record

management) for guidance about record-keeping processes.

4.4.2 Record keeping under the under the EEO Act

Adequate records must be retained for seven years to demonstrate that Australia Pacific LNG has met

the program requirements.




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Records should include evidence gathered for the assessment and reporting schedule, assessments,

reporting and any other documentation prepared for, or used in the participation of, Energy Efficiency

Opportunities.

The record keeping principles outlined under the NGER Act should apply to records obtained for

reporting under the EEO Act.

4.4.3 Record keeping in relation to the National Carbon Offset Standard

Australia Pacific LNG will keep records of and disclose the offset units in a registry and record

appropriate details to verify this cancelling activity (i.e. registry name, serial number, cancellation

certificate, etc). These details are required as part of the Public Disclosure Summary.

Records will be kept to prove that sufficient eligible offsets have been acquired to offset the proportion

of the total carbon footprint associated with the activities of the organisation (or specified part of the

organisation) or products committed to be offset.

Appropriate records will be maintained to allow emissions reductions claims under NCOS to be

audited.

For GHG inventory/carbon footprint verification purposes in relation to NCOS, records will be

maintained including monitoring records, utility bills, test reports, failure reports, internal audit and

management review records, customer complaints and statistics related to the operations and the

manufacture of the product. The relevant NGER report can be used if it has been used to develop a

carbon footprint.




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5. Monitoring

Monitoring activities will be undertaken throughout the life of the project to ensure that the objectives

and targets are met. The activities below will be performed as part of the GHG monitoring program

and energy-efficiency programs. Note that the data reported below are “reportable” emissions under

the NGER system (i.e. for the LNG facility these are scope 1 from fuel combustion, fugitive and vented

emissions), for which reporting is mandatory. GHG emissions calculations from purchased fuels like

diesel will be based on the “full fuel cycle” emissions factors, which include scope 1 emissions due to

combustion of the fuel and the scope 3 emissions from the extraction, production and transport of

those fuels.

The NGER reporting requirements are explained in more detail in Section 6.1.1.

Table 5.1 Monitoring activities for reportable GHG sources and emissions

Activity to be measured Frequency of

monitoring

Data evaluation

method

Data to be reported

Operation of construction

machinery, site vehicles and

diesel fired power

generators

Monthly Fuel consumption from

invoices

Volumes of fuels

consumed

GHG emissions (tonnes):

CO2, CH4, N2O and CO2-e

Land clearing during

construction

Daily Mapping/geomatics-GIS Area of land cleared

(hectares) and the

vegetation types

Emissions from land-

clearing in tonnes CO2-e

Gas flaring during plant

commissioning

Daily Calculations based on

average design daily

flowrates




Gas flared (routine flaring

from dry and wet flares,

purge and pilot gas flaring)



flowrates




Gas flared (non-routine

flaring - process upsets,

planned full or partial blow-

downs, and emergency

flaring from dry and wet

flares)

Per event Calculations based on

continuous flow

monitoring





from marine flare – flare







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Activity to be measured Frequency of

monitoring

Data evaluation

method

Data to be reported

purge and pilots gas flaring flowrates GHG emissions (tonnes):



from marine flares -ship

cool-down and flaring during

loading operations)

Per loading event Calculations based on

continuous flow

monitoring




Non-routine gas flaring from

marine flare


continuous flow

monitoring




Process venting (acid gas

removal unit, nitrogen

rejection unit gas venting)


flow monitoring

Volume of gas vented


CO2, and CH4 and CO2-e

Fugitive emissions from

LNG processing equipment

Annual reporting Calculations based on

fuel throughput

tonnes CH4 emitted

Operation of power


refrigeration compressor gas

turbines and provision of

process heating from

recovered waste heat

Daily Flow metering and

equipment run-time

hours

Fuel consumption (diesel

and fuel gas)

Energy consumption (TJ)


CO2, and CH4 and CO2-e

All flaring activity, power


refrigeration compressors,

process vents and fugitive

emissions

Monthly Reporting based on

measurement and

calculation

Calculate GHG intensity:

tonnes GHG in CO2-e

emitted per tonne

production

Australia Pacific LNG will consider reporting significant scope 3 emissions such as embedded energy

related emissions and LNG shipping related emissions, as determined in the EIS. The monitoring

activities required are listed below.




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Table 5.2 Monitoring activities for some scope 3 GHG sources and emissions

Activity to be

measured

Frequency of

monitoring

Data evaluation

method

Data to be reported

Use of construction

materials

Monthly Data from invoices

Emission factors for

each material from

databases

Mass of construction

materials used.

Embedded energy related

emissions in tonnes CO2-e

LNG shipping Annually Data from fuel

invoices and quantity

of LNG boil-off gas

consumed during

shipment

Volumes of fuels consumed






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6. Reporting, auditing and review

Reporting, auditing and reviews will be undertaken during the construction, commissioning and

operations phases of the project.

6.1 Reporting

List of required reports:

• GHG and energy reporting under the NGERs Act – annual.

• Energy Efficiency Opportunities.

• Reporting under the National Carbon Offset Standard.

• Annual GHG and energy audits to assess opportunities for improvements in GHG intensity

during facility life.

• Construction Contractor Environmental Manager will provide monthly updates to the

Construction Contractor Site Manager on routine monitoring and auditing results

• Construction Contractor Site Manager to provide Australia Pacific LNG with periodic updates on

routine monitoring and auditing results

• Non-routine monitoring and auditing results will be communicated by the Construction

Contractor Site Manager to Australia Pacific LNG as they become available

• Data to be captured by internal GHG and energy data management and reporting system on a

monthly basis:

− Flaring volumes from routine and non-routine processes

− All unplanned emergency flaring events

− Planned and unplanned venting volumes and fugitive emissions; and associated flaring

events

− Fuel gas consumption for power generation turbines and refrigeration/compressor turbines;

GHGs arising from power generation turbines and refrigeration/compressor turbines

− Diesel volumes and GHGs from combustion from power generation

− Diesel volumes and GHGs combustion for on-site transport and construction machinery

− Gasoline volumes and GHGs from combustion from on-site transport

6.1.1 GHG reporting under the NGER Act

Australia Pacific LNG will use the National Greenhouse and Energy Reporting Guidelines to determine

its reporting obligations under the NGER Act. Australia Pacific LNG will use the National Greenhouse

and Energy Reporting (Measurement) Determination 2008 to quantify its GHG emissions.




LNG FACILITY

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Australia Pacific LNG will determine its participation by using its GHG and energy data management

and reporting system to collate data on GHG emissions (GHG emissions will be calculated in units

tonnes CO2-e) and offsets, and to review, verify and report this data under NGER Act. This system will

also require contractors to provide a monthly report detailing a record of unplanned GHG releases.

NGER GHG and energy reporting

The thresholds for GHG and energy reporting are shown in Figure Figure 6.1. There are three types

of facility thresholds:

• Combined scope 1 and scope 2 GHG emissions of 25 kilotonnes of CO2-e.

• Energy production of 100 terajoules.

• Energy consumption of 100 terajoules.

If any one of these thresholds is met the Australia Pacific LNG will register and report all GHG

emissions, energy produced and energy consumed.

Scope 1 and scope 2 GHG emissions for the LNG facility are:

• Scope 1 GHGs arise from generation of heat and electricity from fuel (e.g. fuel gas, diesel and

petrol) combustion; manufacturing processes that produce emissions; transport of materials,

waste and people; fugitive or unintentional releases of greenhouse gases from pipes and joints;

and flaring of gas.

• Scope 2 GHGs emissions arise from the generation of electricity purchased from the grid and

consumed (if applicable).

Energy production and energy consumption will also be reported in units of gigajoules or terajoules for

all GHG generating activities except vented and flared GHGs.

The GHGs to be reported are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O).

Hydrofluorocarbons from air conditioning and sulphur hexafluoride (SF6) are also reportable.

In the event that the thresholds are triggered, Australia Pacific LNG will be required to submit a report

to the Greenhouse and Energy Data Officer using the OSCAR system.

From the GHG assessment for the LNG facility performed in the EIS, it is likely that construction and

commissioning activities alone will trigger the NGERS thresholds. Therefore, the GHG and energy

data reporting system will be need to be established prior to commencement of construction and

commissioning works. GHG and energy data during operations will be reported annually throughout

the lifetime of the LNG facility.

The timelines for registering and reporting under NGERS are also described in Figure 6.1 and will be

discussed in more detail below.

Australia Pacific LNG will apply for registration by the 31 August after the financial year in which a

threshold is met. The Chief Executive Officer (or an authorised representative) of the controlling

corporation must register on behalf of all businesses within the corporate group.




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Figure 6.1 National Greenhouse and Energy reporting thresholds for facilities and

corporations

Reporting requirements for Joint Ventures

In its first year of reporting under the NGER Act, Australia Pacific LNG, being a joint venture between

CoP and Origin Energy, will resolve which of the JV partners will assume reporting responsibility,

based on the following criteria.

Under the NGER Act, an incorporated joint venture will not generally be taken as falling within the

definition of ‘joint venture’. Only unincorporated joint ventures will fall within the definition of ‘joint

venture’ for the purposes of the NGER Act.

• If the JV is an incorporated JV and it fulfils the definition of a controlling corporation (under the

Corporations Act 2001) it will be required to register and report in its own right.

• Where an incorporated joint venture falls within the definition of ‘subsidiary’, the joint venture

company will be included in its parent company’s corporate group.

Only unincorporated joint ventures fall within the definition of a joint venture, these are the only types

of arrangements where participants in a joint venture will be required to nominate a responsible

reporting entity. Further details can be found in the NGER supplementary guidelines on joint ventures

and defining a corporate group.

Operational Control

Australia Pacific LNG will also resolve the issue of which member has ‘operational control’ over

individual facilities. Obligations under the NGER Act are based on which members have operational

control over facilities that meet a facility threshold or that contribute to meeting a corporate-level

threshold. The concept of operational control will be used for allocating responsibility for reporting

energy and GHG emissions data for the LNG facility.




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A corporation is considered to have operational control over a facility if the member has authority to

introduce and implement operating, health and safety, and environmental policies. Only one

corporation can have operational control over a facility at any time. The corporation deemed to have

operational control will be the one with the greatest authority to introduce and implement operating

and environmental policies.

If a third party is contracted to manage or operate a facility on behalf of the owner, it is expected that

authority to introduce policies will be shared between the owner and the manager or operator

according to conditions specified in the contract between the parties. The greatest authority to

introduce policies is thus dependent on the contractual relationship between the parties.

Facility definition

The activities at the LNG facility represent a separate “facility” under the NGER Act because:

• The activities produce GHGs or produce or consume energy.

• The activities are part of a production process.

• The LNG production activities occur at a ‘single site’.

• The activities are attributable to a single industry sector.

The facility reporting boundary for construction activities will include:

• Scope 1 emissions from diesel and gasoline combustion for on-site transport.

• Scope 1 emissions from diesel for power generation.

• GHG emissions from land clearing.

GHG emissions from transport of workers, materials and equipment by third parties, waste disposal

and embedded energy related emissions from construction materials are scope 3 emissions for the

LNG facility and are not reportable under NGERs.

The facility reporting boundary for operational activities will include:

• All fuel gas combustion by power generation and refrigeration/compressor turbines.

• All flaring and venting activities.

• All fugitive emissions from LNG processing.

• All diesel consumed by standby power generators.

GHG emissions from LNG shipping, transport of workers, materials and equipment by third parties,

and waste disposal are scope 3 emissions for the LNG facility and are not reportable under NGERs.

GHG emissions and energy data from major contractors at a facility will be identified if the contractors’

activities emit 25 kilotonnes or more of CO2-e or consume or produce 100 terajoules or more of

energy. GHG emissions and energy data from the entire facility will be reported initially by Australia

Pacific LNG, with major contractor GHG emissions and energy data identified separately but attributed

to the industry sector the facility data are reported against. Major contractors will be identified by their

ABN (Australian Business Number).




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Contractors’ activities the LNG facility that emits less than 25 kilotonnes of CO2-e or consumes or

produces less than 100 terajoules of energy will not be identified separately. They are reportable by

the JV member with operational control over the LNG facility. The GHG and energy data from the

contractor’s activities will be reported against (attributed to) the industry sector the facility reports

against—rather than construction or any other contractor activity.

Contractors’ GHG and energy data will be reported under the Australia Pacific LNG GHG and energy

data management and reporting system.

GHG and energy reporting principles

The NGER (Measurement) Determination 2008 sets out the following general principles for measuring

emissions:

• Transparency - emission estimates must be documented and verifiable.

• Comparability - emission estimates using a particular method and produced by a registered

corporation in an industry sector must be comparable with emission estimates produced by

similar corporations in that industry sector using the same method and consistent with the

emission estimates published by the Department of Climate Change in the National

Greenhouse Accounts.

• Accuracy- uncertainties in emission estimates must be minimised and any estimates must

neither be over nor under estimates of the true values at a 95 per cent confidence level.

• Completeness. All identifiable emission sources within the energy, industrial process and waste

sectors as identified by the National Inventory Report must be accounted for.

Estimates of GHG emissions and energy production and consumption will be prepared in accordance

with these principles.

Calculating GHG and energy data

The National Greenhouse and Energy Reporting (Measurement) Determination 2008 outlines four

methods that can be used to estimate GHG emissions and energy produced or consumed. Australia

Pacific LNG will report on the methods used. Broadly, the four methods are as follows:

• Method 1 - the default methods, derived directly from the methods used for the National

Greenhouse Accounts and the same as those used in OSCA.

• Method 2 - a facility-specific method using industry sampling and Australian or international

standards listed in the Determination or equivalent for analysis.

• Method 3 - a facility-specific method using Australian or international standards listed in the

Determination or equivalent standards for both sampling and analysis of fuels and raw

materials. Method 3 is very similar to method 2, but it requires reporters to comply with

Australian or equivalent documentary standards for sampling.

• Method 4 - direct monitoring of emission systems, on either a continuous or a periodic basis.

One method for a GHG source must be used for 4 reporting years unless a higher order method is

used.




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A detailed GHG measurement plan based on the four reporting methods under the National

Greenhouse and Energy Reporting (Measurement) Determination 2008 will be developed for each

GHG source.

Estimating incidental greenhouse gas emissions and energy

Incidental greenhouse gas emissions and energy are small sources of GHGs or energy at a facility. If

GHGs or energy sources from a facility are incidental, the Australia Pacific LNG will estimate the

amounts using its an internally developed methodology.

Figure 6.2 indicates the upper limits for GHG emissions and energy data.

Incidental GHGs will be separated by source; energy produced or consumed (divided by energy type).

• GHGs and energy data may be treated as ‘incidental’ only if more accurate estimation is difficult

or expensive.

• The data is not otherwise required for reporting in another government program.

Figure 6.2 Upper limits for amounts of GHGs and energy data that may be considered

incidental

Reporting GHG emissions to the Greenhouse and Energy Data Officer

Once registered, Australia Pacific LNG will submit a Corporate report (inclusive of all reportable

emissions from upstream and downstream sources) by 31 October following the reporting period

(financial year).

Australia Pacific LNG will report GHG emissions and energy data for the financial year during which it

first meets a threshold. A report will be provided to the Greenhouse and Energy Data Officer for every

year after the year the thresholds are first met. GHG emissions and energy data reports will be lodged

on the federal government’s OSCAR (the Online System for Comprehensive Activity Reporting),

administered by the Commonwealth Department of Climate Change and Energy Efficiency.

6.1.2 Energy Efficiency Opportunity Reporting

The five steps for reporting Energy Efficiency Opportunities is given in Figure 6.3.




LNG FACILITY

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Figure 6.3 Process for EEO reporting

Determine participation

If Australia Pacific LNG on a corporate level (inclusive of upstream and downstream activities) uses

more than 0.5PJ of energy in a financial year, it will participate in Energy Efficiency Opportunities. The

responsibility for participating in Energy Efficiency Opportunities rests with the controlling corporation.

Register with the Department of Resources, Energy and Tourism

Registration will be undertaken within nine months following the end of the financial year in which the

energy use of the corporate group exceeds 0.5PJ. That year is referred to as the trigger year. The

Chief Executive Officer (or an authorised representative) of the controlling corporation must register on

behalf of all businesses within the corporate group.

Prepare an assessment and reporting schedule

After registering, Australia Pacific LNG will prepare an assessment and reporting schedule (termed

‘Assessment Plan’ in the legislation). The scope of the assessment will include the LNG facility only.

This schedule will be submitted to the Department within 18 months following the end of the trigger

year.

An assessment and reporting schedule covers a five-year assessment cycle and will comprise:

• An outline of corporate structure and related information.

• Current energy use and savings data.

• An assessment schedule – outlining how and when Australia Pacific LNG will conduct

assessments.

• A reporting schedule – outlining how, where, and when the Australia Pacific LNG intends to

report to the Department and to the public.




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An assessment and reporting schedule will be submitted within 18 months of the end of the trigger

year. For example, if the trigger year is 2012-13, the assessment and schedule must be submitted by

31 December 2014. Schedules for second and subsequent cycles will be submitted within 18 months

of the end of the previous cycle.

Conduct assessments

Energy use will be assessed to identify cost effective opportunities for improving energy efficiency with

up to four year paybacks. Australia Pacific LNG will ensure that each member of the corporate group

that is scheduled to conduct assessments completes its first assessment for at least one site, key

activity or business unit within the first two years of the assessment cycle.

The Australia Pacific LNG will ensure that at least 80% (current reporting cycle; 90% in subsequent

cycles) of its total energy use is assessed, including all sites that use more than 0.5PJ per year, within

the five year assessment cycle.

Energy use data collected as part of the assessment will be accurate to within ±5%. If an accuracy

level of ±5% accuracy cannot be met, Australia Pacific LNG will apply in their schedule to report less

accurate energy use data.

To ensure assessments are rigorous and comprehensive, the minimum standard detailed in the

Assessment Framework will be met. The key elements of the Assessment Framework are:

• Leadership support for the assessment and the improvement of energy use.

• The involvement of a range of skilled and experienced people, and people with a direct and

indirect influence on energy use during the assessment process.

• Information and data that is appropriately, comprehensively and accurately measured and

analysed.

• A process to identify, investigate and evaluate energy efficiency opportunities with paybacks of

four years or less.

• Business decision making and planning for opportunities that are to be implemented or

investigated further.

• Communicating the outcomes of the assessment and the investment decisions made regarding

the opportunities identified and proposed business response, to senior management, the board

and personnel involved.

Report on assessment outcomes and business response

Australia Pacific LNG will publicly report the outcomes of the first assessment or assessments,

including their business response, within 15 months of the first assessment’s completion. Annual

updates of further assessments and business responses will be provided. Australia Pacific LNG will

ensure that public reports will be readily available to investors, shareholders, other key stakeholders

and interested members of the public. Typically, ConocoPhillips have included them in annual financial

or other similar reports.




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Australia Pacific LNG will also report to the Department on the outcomes and the business response

to the assessments by the time their first public report is made, and again within six months of the end

of the assessment cycle.

Figure 6.4 gives a summary of the EEO program cycle.

Figure 6.4 EEO Assessment and Reporting Cycle

6.1.3 Reporting under the National carbon offset standard

Australia Pacific LNG will issue a periodic report that may be made publicly available on a website to

communicate progress on emissions reduction activities and carbon offsetting of carbon neutral

organisations and products. The periodic report will be made against an Emissions Management Plan

and should include the following:

• The total carbon footprint of the activities of the organisation (or specified part of the

organisation) or the product sold in the given period, including any actions taken to reduce total

greenhouse gas emissions before offsetting.

• A statement on the emissions reduction activities undertaken in accordance with the emissions

reduction strategy and the resulting quantity of emissions reduced.

• Records to prove that sufficient eligible offsets have been acquired to offset the proportion of

the total carbon footprint associated with the activities of the organisation (or specified part of

the organisation) or products committed to be offset.




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• Details of the quantity and type of offset units purchased and register into which they have been

retired, or cancelled.

6.2 Corrective actions

Corrective actions will be implemented in accordance with Section 6.10, Volume 1 – Overview EM

Plan and ConocoPhillips’ HSEMS element No.10 – Non conformance, investigation and corrective

actions

6.3 Auditing

Australia Pacific LNG and its contractors will conduct internal compliance audits against this

management plan on an annual basis.

Audits of GHG and energy data should be performed on an annual basis.

For established GHG offset projects, GHG emissions reductions and offsetting activities should be

reported and independently audited on an annual basis. Audited progress reports may be made

publicly available

6.4 Management Review

The Management Team will conduct an annual review of the GHG management plan.

As part of the annual review, a review will be conducted of current and potential GHG abatement

opportunities and this will be reported to the Management Team for consideration.

This process will facilitate continuous improvement of the GHG Management Plan.




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7. References

Australian Government 2006 Energy Efficiencies Opportunities Act.

Australian Government 2008a National Greenhouse and Energy Reporting Act 2007

Australian Government 2008b National Greenhouse and Energy Reporting (Measurement)

Determination.

Australian Government 2010 National Carbon Offset Standard.

Australia Pacific LNG Environmental Impact Statement, 2010, http://www.aplng.com.au/process.

Darwin LNG, 2005, Darwin LNG Operations, Health, Safety, & Environment, Environmental

Management Plan, Document No: DLNG/HSE/PLN/001 Section 5, Revision 1.

Garnaut, R 2008 The Garnaut Climate Change Review-final report. Cambridge University Press,

Chapter 12, p. 284

Heede, R 2006 LNG supply chain greenhouse gas emissions for the Cabrillo Deepwater Port: natural

gas from Australia to California

Australia Pacific LNG, 2010, Draft Environmental Offset Strategy, Q-LNG01-15-EA-0021.

Queensland Government 2007 ClimateSmart 2050: Queensland climate change strategy 2007: a low

carbon future.

Queensland Government 2009 ClimateQ: toward a greener Queensland. Source

http://www.climatechange.qld.gov.au/whats_being_done/queensland_climate_change_strategy.