Coode Island Committee Update

Terminals Pty Ltd sale process
At the CICCC meeting on 8 August 2002, Allen Hugli of Burns Philp announced the conditional agreement to sell Terminals to subsidiaries of Kaneb Pipe Line Operating Partnership, LP for AUD 83 million. It is anticipated that the conditional items will be resolved and the sale completed by the end of August. Kaneb is the third largest independent liquids terminaling company in the USA, and is a major transporter of refined petroleum products in the Midwest. Worldwide operations include 61 facilities in 26 states and the United Kingdom.

Advice from the Department of Innovation, Industry and Regional Development
Ian Munro, General Manager, Investment Facilitation, Department of Innovation, Industry and Regional Development told the Committee about progress on two matters-sewerage of Coode Island, and negotiations to bridge the ‘gap’ in the supply of bulk hazardous liquids to industry anticipated if Terminals were to quit the East side of Mackenzie Road in accordance with their lease agreement with MPC.
Ian explained that further progress has been made with MPC and City West Water in relation to the ownership of the sewer and the process to enable construction to commence, with government providing some additional funding. Formal agreements can now be put in place and the commencement of sewer construction is anticipated before Christmas, with City West Water overseeing the project.
George Horman expressed frustration at the 18 month Government delay in commencing the sewer, during which Terminals had to bear increased costs for trucking wastes off-site, rather than the cheaper trade-waste arrangements possible with the sewer.
Ian Munro told the Committee that the parties (Burns Philp, Dow, Huntsman and the Victorian Government) were extremely close to agreement on arrangements to remove the ‘gap’. While there is a confidentiality clause in the agreement that prevents the Government contribution from being disclosed to the public, Ian confirmed that agreement will not be achieved without some Government financial assistance.

Terminals’ Environment Improvement Plan (EIP)
Terminals will progressively brief the CICCC on the various components of their EIP over the next few months. At the August meeting Jeff Hibbert of Terminals presented a study on the immediate condition of the tanks, the first of three studies on tank integrity.
Prior to signing of the 20 year leases last December, Terminals were maintaining their plant for the short term-paint work etc. has been at a minimum. They are now addressing long-term maintenance issues that will prolong the life of the facility for at least 20 years.
Robert Vanderlinde of AMEC has conducted an inspection of tanks nominated as storing dangerous goods within Plants B & C on the west side of Mackenzie Road. Some 80 tanks are involved. Two main classes of defects were reported which focus on the prevention of corrosion of the tanks – roofs, walls and floors. The first is a breakdown in the bituminous seal around the base of 26 tanks, allowing moisture to seep underneath the tank with the potential to corrode the tank floor near the edge of the tank over time. The second class is the breakdown of the protective coating on the tank walls and roofs. Terminals are rectifying the problems currently and they will be complete by end August.
The second study is a detailed external inspection of the tanks that will involve ultrasonic thickness testing of the wall and roofs of the tanks. This is done every ten years. All the tanks will have this completed over the next 3 months. The results will be compared with the original thicknesses of the tanks and will identify if there has been any significant deterioration.
The third study is to conduct internal inspection of the tanks including 100% scanning of the floors to identify if there has been any corrosion underneath the floors. Given the need to empty and clean the tanks before gaining access, this study will take 2 years to complete. Currently, no tanks are suspected of having any leaking floors-tank inventory is rigorously monitored. Over recent months, non-destructive testing of 18 tank floors has been undertaken and no tank has been found to be leaking, although some corrosion has been identified in some of the tank floors. Where the corrosion has been significant, it has been repaired to ensure the long term integrity of the tanks.
The method of floor thickness testing is new. It provides a total picture of the floor, whereas previously only spot measurements could be taken. The accuracy of the new scanning process has proved to be of a high order. Three tanks that were scanned were subsequently jacked up to install a membrane barrier. (This is part of a program to install barriers under all tanks to protect groundwater from any seepage of chemicals.) The condition of the tank floors as seen from underneath was identical to that indicated by the ultrasonic scans.
Community members expressed concern about the state of the tanks, and about the uncertainty associated with tank floors that have not yet been tested. Terminals have been asked to provide clearer information at the next meeting.

Soil Remediation
George Horman told the Committee that there is between 14,000 and 28,000 cubic meters of contaminated soil in the areas east of Mackenzie Road to be vacated by Terminals. The contamination consists of organic chemicals (from chemical storage) and heavy metals (brought to the site in the original fill). A detailed survey of the site now being undertaken will establish how much of the contaminated soil is proscribed waste (heavily contaminated) and how much is more lightly contaminated.
While in-situ bio-remediation had been initially proposed, a “dig and dump” solution is now favoured. The “dig and dump” solution will reduce odours from the bio-remediation, cater for removal of the heavy metals, and provide a quicker solution that will assist in closing the “gap”.
Community representatives were alarmed at the likelihood that the dumped contaminated spoil would never be treated, resulting in a lower quality environmental outcome.

New Combustors installed
The two new combustors have been installed on site, and when natural gas is connected they will be put into service.

Next meeting of the CICCC
Agenda items for the August meeting of the CICCC include the further discussion on the Environment Improvement Plan and the Safety Case, and further advice on the soil testing at Coode Island. Members of the public are welcome to attend the meeting on Thursday 12th September 2002 at the Maribyrnong Town Hall on the corner of Hyde and Napier Streets, Footscray at 6.30 pm.

Robin Saunders, 

Chair CICCC, 

8 August 2002