Gas leak shutdown closes power stations, dairy factories

Some businesses, farms and essential services have been brought back online but have been told to use only what they must and to conserve the still limited gas supply.

Pipeline operator Vector has closed the Maui gas pipeline until a leak in the remote area of White Cliffs, north of New Plymouth, is repaired.

Fonterra has been able to bring some sites back online because they of gas being provided by a smaller Vector pipeline. Because supply is limited they are going to need to cut back production.

Fonterra Managing Director Trade and Operations Gary Romano said it could be between 5 to 16 hours before those sites with access to the gas supply can start processing milk again.

“As our sites come up and running we will need to process the milk currently in the silos at the sites but we also expect to be able to collect and process milk from some farmers in the Waikato and Bay of Plenty from tonight. Our Service Centre will contact those farmers whose milk will be collected this evening.” said Romano

In latest developments:
• Gas leak isolated and pipeline is being excavated
• Gas supply cut to power stations, industrial and commercial users
• Lost milk production is costing Fonterra and its suppliers $20 million a day
• Hospitals cut back on laundry, heating and other operations

In an update this morning, Vector says the damaged Maui pipeline, which has a fractured weld patch, has been isolated and de-pressurised. Geotechnical engineers have worked through the night excavating around the pipeline.

They will then cut out the leaking section and weld in a replacement. This is likely to take at least two days, the Vector spokesman says.

Vector owns a nearby smaller pipeline, which is not affected and is still supplying gas to the upper North Island.

However, supply has been cut to power stations in Huntly, Otahuhu and Southdown as well as all non-residential consumers on the North, Bay of Plenty and Morrinsville lateral pipelines.

Residential users have been asked to limit their use of gas.

Auckland Council has activated its Emergency Cooperation Centre and is shutting down gas supplies to some of its services and buildings. Disruptions may be caused in swimming pools, crematoria and office buildings.

Mayor Len Brown wants Auckland to play its part in the conservation process.

“I am urging all Auckland businesses and retailers to seek advice from their gas provider as to how to safely shut off supplies as quickly as possible," said Mayor Brown.

Acting Minister of Energy and Resources Hekia Parata says the area where the gas is leaking is in steep and difficult terrain. This is the first major problem with the Maui pipeline in its 30 years of operation.

Fonterra has been forced to shut down 15 dairy processing plants in the Bay of Plenty, Waikato and Northland. Two others use coal and are not affected.

Trade and operations managing director Gary Romano says that means 30 million litres of milk is being dumped every day, which is costing $20 million a day.

He says it's a period of peak production and this has restricted the options to switch between factories.

"Ultimately it ends up being picked up by the cooperative and its dairy farmers directly but ultimately that money doesn't come into the New Zealand economy," he says.

Fonterra is looking for alternate sources of energy to use to ensure continuity of supply into the retail market.

He says supplies for the export market are holding up because they're mainly processed dairy products.

Hospitals in Waikato and Auckland have cut back on laundry and heating until supplies are renewed. Meanwhile, they have switched to diesel generation and emergency supplies.