Santos Fined for Spilling 25,000 Litres of Petroleum Condensate Offshore

The logo of Australian oil and gas producer Santos Ltd is pictured at their Sydney office Feb. 15, 2016. Reuters/Jason Reed/File photo

The multinational oil and gas company Santos, which won a $9 million cost settlement from the Environmental Defenders Office over a failed bid to stop it from building a new gas pipeline in northern Western Australia, has pleaded guilty to a major condensate spill from another of its pipelines in the same area.

The local registered subsidiary, Santos WA Northwest Pty Ltd, admitted that it was responsible for the accidental discharge of around 25,000 litres of petroleum condensate into the ocean at the Varanus Island Marine Terminal, located off the northwest coast of Western Australia, in March 2022.

Condensate is byproduct formed from natural gas production.

In the Karratha Magistrates Court, it was fined $10,000 (US$6,239) plus costs of $9,700 after pleading guilty to operating its licensed pipeline improperly and failing to prevent the escape of petroleum, in breach of the Petroleum (Submerged Lands) Act 1982.

The condensate escaped from a rupture in the flexible part of a pipeline that conveyed it to offshore shipping tankers.

The pipeline was stored on the seabed at depths of 20 to 25 metres and attached to surface buoys, allowing support vessels to retrieve it.

Petroleum was observed on the ocean surface shortly after dawn, prompting an immediate halt to the loading process.

The rupture occurred due to repeated overbending and kinking of the flexible loading line, which compromised its structure over time.

Santos Responsible

The court heard that crews on the support vessels were not sufficiently aware of the company’s written procedures for loading tankers, which had identified the hazard of repeatedly bending flexible loading lines and prescribed measures to prevent it from happening.

Despite this, Santos was held to have failed in several ways as the pipeline licensee, including insufficient monitoring of condensate loading operations and failing to conduct an adequate investigation to determine if the pipeline was fit for purpose before starting to use it in 2022.

Following the spill, the WA Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) required Santos to strengthen its operational controls and amend its environmental plan to reduce the risk of future incidents.

DEMIRS Executive Director of Resource and Environmental Compliance Tyler Sujdovic said the department would continue to ensure companies observe all regulations and adopt best practice.

“Operating subsea pipelines in a ‘proper and workmanlike manner’ is a fundamental principle widely understood and applied by operators in the oil and gas industry,” he said.

The objective is to ensure pipelines are operated safely, reliably, and professionally.

“Companies must ensure all workers, including contractors, have the required training and access to up-to-date written procedures to manage petroleum effectively when performing their assigned tasks.”

After the incident, Santos reviewed its practices and implemented measures to prevent the kinking of flexible loading lines, including subsea monitoring of the line’s position.