26 Oct 2011

Vector can't give time to fix crippling Maui leak

9:30 pm on 26 October 2011

Gas pipeline operator Vector says it's unable to give a timeline for fixing damage to the Maui pipeline in north Taranaki, as many production plants closed in the upper North Island.

Vector asked about 5000 businesses, including New Zealand's largest company Fonterra, to stop using gas on Tuesday after a leak was discovered in the pipeline in the remote White Cliffs area, near Urenui.

Farmers dumped milk and hundreds of workers were idle at factories and production plants on Wednesday.

Vector says supply has been restored to dairy processing plants, hospitals and other essential services but it is asking them, and households, to minimise their usage.

It says 3500 commercial customers are still without gas.

Farmers in Northland, Waikato and Bay of Plenty dumped many thousands of litres of milk on Wednesday.

However, on Wednesday evening Fonterra said it expected to have all its milk processing plants in Waikato and Bay of Plenty operating again by Thursday morning.

It does not know when two Northland plants, or its Tip Top factory, will be brought back on line.

Factories slowed or shut down entirely include Griffin's Foods at Wiri and Papakura, which employ 620 people, and parts of New Zealand Steel's Glenbrook mill, which are both planning for the disruption to last several days. Workers are still getting paid.

Acting Energy and Resources Minister Hekia Parata says the Government is confident Vector is taking a careful, methodical approach to fixing the pipe.

Three options for repair - Vector

Vector says it hopes to fully excavate the damaged pipeline on Thursday. It will then work out the best of three options that could be used to fix the 30-year-old line, which has a 13cm crack in it.

Chief executive Simon Mackenzie says many firms are still without gas.

"The types of business range from large industrial companies, like New Zealand Steel, or manufacturing facilities like glass making right down to cafes that use gas as their primary source for cooking."

Mr Mackenzie says he agrees this is a critical situation for a lot of people.

He says Vector needs to work carefully to to ensure there's not a major explosion, or further damage to the ground around the leak. He says once geotechnical engineers can make sure the ground is stable, they can start the actual repairs.

Contractors have to move in 30cm increments to ensure they don't hit a Vector gas pipe 5m away that is the sole source of backup gas for the upper North Island.

Mr Mackenzie says it appears the cause of the fault was a fractured weld.

He says Vector is deciding whether redoing the broken weld, putting a cap over the crack or putting in a new section of pipe is the best option.

Weetbix, bread and mints among disruptions

The Food and Grocery Council says the gas leak is creating a challenge for the food industry.

Chief executive Katherine Rich says the concern in the long-term is to ensure the Auckland area does not run short of food.

Bread producer Quality Bakers, which is owned by Goodman Fielder, has closed its factories north of New Plymouth and is relying on the company's Wellington factories to bake extra bread to send to Auckland.

Goodman Fielder's director of corporate affairs, Ian Greenshields, says the gas leak means they have changed the focus of their bread production.

Sanitarium says it will have difficulty supplying products such as Weetbix if its gas supply is not restored soon.

Sanitarium stopped production at its Auckland cereal factory on Wednesday because of the gas leak.

General manager Pierre van Heerden says the Auckland factory is dependent on gas, but he will now consider other energy sources.

He also says Sanitarium will try to increase production at its Christchurch factory.

Mr van Heerden says he is amazed a first world country such as New Zealand has only one pipeline to service thousands of customers in the upper North Island.

Nestle has had to shut down part of its factory in Wiri.

The production line that has been closed down produces sweets such as Mackintosh toffees, liquorice allsorts and oddfellow mints.

Corporate services manager Maurice Gunnell says it is too early to know what the closure will cost the company.

Caterers hit

A catering company that supplies inflight meals for airlines says the gas interruption is making it difficult to source some basic food supplies.

LSG Sky Chefs New Zealand general manager Jaap Roest says its customers include Air New Zealand and several other international carriers.

He says there are real problems getting food such as milk, cheese and bakery items from suppliers, and now there is no cooking using gas, electric cooking equipment has had to be brought in.

Mr Roest says business interruption insurance may cover some of the costs.

Medical, council disruptions

Gas has been restored to the Manukau Surgery Centre, meaning elective surgery can resume there on Thursday.

On Wednesday Counties Manukau District Health Board had to cancel about 20 operations at the centre, which uses gas for heating and for sterilising instruments.

DHB spokesperson Dorothy McKeen says they've been involved in a conference call with boards from Auckland, Waitemata and Northland, and they all seem to be managing well.

She says the problem at the centre in Manukau is that it relies mainly on gas, and they're now looking at putting in a diesel backup.

The shut-down is also affecting hospital laundry services.

Waikato DHB's laundry service has taken on additional work from other regions including Auckland, Waitemata and Counties Manukau.

Auckland Council has shut down gas supplies to its buildings and services including swimming pools, crematoria and some council offices.

It's activated its Emergency Coordination Centre and is urging businesses and retailers to cut down on gas usage.

Glass factory cooling

Production has ceased at New Zealand's only manufacturer of glass bottles and jars.

O-I Asia Pacific spokesperson Dieter Lehmann says the company stopped using gas at its plant in Penrose on Tuesday afternoon.

He says the focus now is on keeping customers informed, and the large furnaces warm.

Mr Lehmann says the facility employs about 250 people and operates 24 hours a day, seven days a week.

He says rosters are now being assessed given that production has stopped.

The Novotel hotel in Greenlane in Auckland is bringing in BBQs and portable showers for its guests.