Exxon Halts Australian Ethane Supply on Pipe Rupture

By Angela Macdonald-Smith

Dec. 16 (Bloomberg) -- An Exxon Mobil Corp.-BHP Billiton Ltd. venture in southeast Australia halted supplies of ethane to chemical plants in Melbourne’s west after a pipeline ruptured when a ship dragged its anchor during a storm.

The incident happened on the afternoon of Dec. 13, when the anchor of the vessel, APL Sydney, dragged across the pipeline, said Steve Curry, a spokesman at the Australian Transport Safety Bureau, which is investigating the accident. Exxon can’t estimate when supplies from the Bass Strait petroleum venture will resume, said Trisha Perkins, a spokeswoman in Melbourne.

Exxon, the world’s biggest publicly traded oil company, and Melbourne-based BHP Billiton each own 50 percent of the Bass Strait petroleum business, the largest in Australia’s eastern states. Ethane is separated from liquefied petroleum gases at Long Island Point for transportation by a 78-kilometer (48-mile) pipeline to chemical plants in western Melbourne.

Exxon is assessing the damage to the 10-inch-diameter line and sending equipment to the site, said Perkins. “Once we better understand what has occurred, we can put the necessary repair procedures in place” for repairs, she said.

The venture is working with its two customers, Qenos Pty and Huntsman Chemical Co. Australia Pty, on “ongoing supply issues,” Perkins said. She declined to say whether Exxon and BHP have declared force majeure on deliveries.

Qenos, owned by China National Chemical Corp., has reduced output of ethylene at Altona in western Melbourne because of the interruption to supplies, said Maureen Short, a spokeswoman. The company is using ethane from stockpiles and liquefied petroleum gas as alternative fuels, she said. Qenos uses ethane to produce ethylene, which is further processed into petrochemicals and plastics at its site.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net