Recycling of Australian oil and gas assets, an Australian Basel-compliant solution

Abstract

Australian offshore petroleum infrastructure decommissioning strategies are dictated by legal requirements set out in the Offshore Petroleum and Greenhouse Gas Storage Act, requiring prima facie that assets are removed from the title area. Legally, once assets are decommissioned, they require disposal at a Basel-compliant facility. This lack of Australian capability has forced titleholders to contemplate leaving infrastructure in situ (rigs-to-reef), which may well breach Australia’s international law obligations under the United Nations Convention on the Law of the Sea, and the London Convention on Dumping at Sea (and associated Protocols). Australia’s closest Basel-compliant facility is located in Turkey. The experience of the Iron Chieftain in 2019 demonstrated the difficulty in using this facility. In 2019 the bulk carrier Iron Chieftain caught fire in Port Kembla, and was declared a Constructive Total Loss (CTL). Disposal required decontamination, seeking Basel export approval, and towing to Turkey via South Africa. Following 9 months to complete the application, the vessel commenced its tow. The vessel was not permitted to stop or enter the port waters of any port other than Turkey after leaving. If it did stop, the application ceased and a new application was required to be commenced. If the vessel arrived in a condition not acceptable to authorities, the vessel would be turned away, requiring it to return to its home port of Port Kembla where the application commenced from. In response to such difficulties, a new Basel-compliant recycling facility has been established, co-located to a green steel recycling works, delivering a near carbon-neutral asset recycling and disposal solution for Australia’s offshore energy infrastructure. Strategically located in the mouth of the Spencer Gulf, South Australia, this facility will provide a green whole-of-asset recycling and disposal solution in-country, removing towage expenses and CO2 emissions. This extended abstract articulates the Iron Chieftain experience, highlighting the issues facing petroleum infrastructure decommissioning and disposal in accordance with Basel requirements. It also provides an overview of the Whyalla recycling and disposal facility, presenting the case for circular economy, ethical asset decommissioning and Australian capability.