Denise mcmillan chairman hvcclt bitre colloquium june 2008 canberra
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Denise McMillan Chairman, HVCCLT BITRE Colloquium: June 2008, Canberra. Despite the debate about Climate Change, coal will continue to be in strong demand into the medium term – although “costs” are likely to increase with carbon taxes or equivalent:

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Denise McMillan Chairman, HVCCLT BITRE Colloquium: June 2008, Canberra

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Denise mcmillan chairman hvcclt bitre colloquium june 2008 canberra

Denise McMillanChairman, HVCCLTBITRE Colloquium: June 2008, Canberra

Coal outlook

Despite the debate about Climate Change, coal will continue to be in strong demand into the medium term – although “costs” are likely to increase with carbon taxes or equivalent:

“There will be a 55% growth in coal power generation (2.1m MW) by 2020

“ By 2020 China will have twice the coal fired power generation capacity of the US; - But only half the capacity per capita

“ Coal remains the most cost effective option for power generation”….….…. McLLvaine Report: Coal Fired Boilers; World Analysis and Forecast 2007

Coal Outlook

Coal price movement

Coal Price Movement



Hunter valley coal chain the worlds largest coal export operation

Hunter Valley Coal Chain: The Worlds Largest Coal Export Operation

  • 40 Coal Mines

  • 17 Producers

  • 30 Load Points

  • > 80 Different Brands of Coal

  • 2 Above Rail Operators

  • 29 Trains/15,000 trips per year

  • 2 Track Owner/Operators

  • Haulage distances up to 350km

  • 2 Coal Loading Terminals – KCT & CCT

  • 5 Dump Stations

  • 1.5Mt of Working Stockyard

  • 5 Ship Berths and Loaders, “4 Queues”

  • Approx. 1000 vessels per year

  • Average vessel size is 84kt

  • Avg 2 Cargoes per Vessel

  • Multiple Components per Cargo

  • Tidal constrained river port

  • 10% Domestic Consumption

  • 90% Export – mostly Thermal coal

  • 70% to Japanese Power Stations

  • Turn of Arrival loading port

  • JIT cargo assembly process

  • 16 independent organisations required to move each tonne of coal

  • No control over demand – only two weeks visibility and highly variable volumes

  • Avg 5 days clean coal on stock at the mines

Q: How to maximise system throughput and drive efficient asset utilisation?

Hvcclt a cooperative planning and operating model

HVCCLT: A Cooperative Planning and Operating Model

  • Joint Venture between the organisations that own the train, track, terminal and port infrastructure

  • The movement of every tonne of domestic and export coal is planned via the HVCCLT

  • HVCCLT provides a ‘system wide’ forum for pursuing operational improvements and making efficient decisions about future investment in infrastructure

  • Provides centralised planning services on behalf of its members:

    • Short term objective – focus on maximising daily capacity and throughput

    • Long term objective – realise cohesive investment planning

  • Established under an MoU in July 2005 – operates on a premise of cooperation between the member organisations

  • Membership includes all transport asset owners in the Hunter Valley – and the newest operator, NCIG, have expressed intent to participate in the model

  • 30 Employees seconded from member organisations

  • $5 million investment in state-of-the-art constraint based planning technology and models

Declared capacity 2008

Minimum Throughput Estimate :

Base Coal Chain Capacity118Mt

Less Planned ARTC & PWCS Asset Unavailability 11Mt

Less Risk Adjustment (Demand profile, Reliability, Other) 2Mt

Less 10% Unplanned Capacity Losses 10Mt

Minimum Throughput Estimate (Mtpa) ~95Mt

Declared Capacity 2008

Hvcc performance ytd performance to 8 june 2008

HVCC Performance – YtD Performance to 8 June 2008

Vessel queue

Vessel Queue

Newcastle End of Month Vessel Queue Actual & Forecast

(Updated 1 June 2008)

Effect of June 8th Storms

Vessel Queue with CBS

Avg Approx 18, but with big fluctuations




Pre-CBS Vessel Queue

CBS Reinstated


Effectively Concluded

CBS Commenced


Hvcclt planning for performance

Track Infrastructure:


Port Coal Handling Services:



Train Operators:

Pacific National


HVCCLT: Planning for performance

Is it as simple as

“building more infrastructure”


The challenge

The Challenge

Target delivered capacity

3rd Track

Maitland to



Full MB-A Dup

& 3 Exp aligned

Base Case unable to achieve a “target” demand of 145Mtpa of delivered capacity and results in unacceptably high vessel turn around times

Hvcclt model the opportunities


Clearer definition of issues

Integrated planning is now occurring

Formal structure

System assets utilisation is being maximised

Each member still has full responsibility for assets

HVCCLT Model – The Opportunities

Hvcclt model opportunity


Is a cooperative collaboration… - Fragile

Disparate data sources can lead to non shared understanding

Staff are still employed by member organisations – perceptions of independence

Model currently excludes producers as members

Pieces of the chain are ‘linked’ – not ‘bonded’….

HVCCLT Model – Opportunity

Hardware vs software coal chain complexities the hvcclt model

Capacity Development: Use & Allocation

Demand Profile?

What ‘Toys’ ?


Risk Profile

Risk Sharing

Contractual Alignment

Queue Management

“Hardware” vs “Software”: Coal Chain Complexities & The HVCCLT Model

Moving forward

Common understanding and alignment between Producers, Ports, Track & Operatorswith respect to:

Demand Profile

Asset suite to deliver reliable capacity

Investment Triggers

Contractual & Commercial Alignment

Certainty of Outcome

Moving Forward

Hvccc proposal

“Greiner” Review Outcomes:

Agreement of Coal Chain Principles

Establishment of HVCCC as legal entity

Producer & Service Provider Board representation

HVCCC to employ staff directly

Industry commitment to 10 year take or pay rolling contracts

Contracts & performance to reflect capacity utilisation

HVCCC – Proposal

Hvcclt overview of planned investment

Appendix I – For information only

HVCCLT members recognise that infrastructure planning must be undertaken as a holistic system plan

HVCCLT members are working together to ensure all plans are complementary and will meet future system needs

Note plans are constantly reviewed and future works may change subject to delivery schedules, demand expectations or better options are resolved.

The following is an outline of current planned investments

to future system development

HVCCLT – Overview of planned Investment

Port waratah coal services

Port Waratah Coal Services Limited (PWCS) is an unlisted public company owned by the Hunter Valley Coal Industry (70%) and Japanese Coal Customers (30%)

PWCS is the worlds largest coal handling facility and currently exports coal valued above $5 billion per year

PWCS’ terminals are an important part of regional, state and national economies - coal exported through PWCS facilities counts as Australia’s largest commodity export

PWCS owns and operates two coal handling facilities in the Port of Newcastle, Carrington Terminal at a capacity of 25 million tonnes per year and Kooragang Terminal at a capacity of 77 million tonnes per year following the completion of the Project 3D expansion in March 2007

Port Waratah Coal Services

Port waratah coal services1

Expansion to 102 Mtpa (Project 3D- new pad & stacker) was completed in March 2007, nine months ahead of schedule and under budget

Development Application approval to increase the throughput capacity of the Kooragang Terminal to 120 Mtpa (total PWCS approved capacity of 145 Mtpa) was received on 13 April 2007

Board considered expansion at May 2007 Board meeting

Announcement of further expansion of Kooragang Terminal at a cost of $458 Million to 88 Mtpa (combined PWCS capacity of 113 Mtpa) made on 20 June 2007

Expansion beyond 113 Mtpa (fourth operating berth, western extension of stockpile pads C and D, the remainder of upgrades to the original stacking stream and the replacement of the remaining two original Kooragang Terminal stacking machines) will be considered in the future in order to meet long term Customer requirements

Port Waratah Coal Services

Denise mcmillan chairman hvcclt bitre colloquium june 2008 canberra

Newcastle Coal Infrastructure Group- NCIG

  • NCIG established August 2004

  • Objective : To increase total export capacity for Port of Newcastle via construction of a third coal terminal

  • Members (shareholding):

    • BHP Billiton – through Hunter Valley Energy Coal (35.46%)

    • Centennial Coal (8.78%)

    • Donaldson Coal (11.60%)

    • Peabody Energy (17.68%)

    • Felix Resources (15.4%)

    • Whitehaven Coal (11.06%)

Denise mcmillan chairman hvcclt bitre colloquium june 2008 canberra

NCIG Status & Timetable

  • Project Approval granted 13 April 2007

  • Quarter 4 2007 : Commence construction of the project and dredging

  • Quarter 2 2009 : Complete dredging

  • Quarter 1 2010 : Commence operations (first ship loaded)

  • End 2010 : Commence full operations – 30 Mtpa

Denise mcmillan chairman hvcclt bitre colloquium june 2008 canberra

Port of Newcastle – Future Capacity

PWCS – Kooragang : 88 Mtpa – mid 2009

PWCS – Carrington : 25 Mtpa

NCIG – Kooragang : 30 Mtpa – 2010

TOTAL : 143 Mtpa2010

Artc investment

Project2007-2012 Strategy2007-2012

TimingStrategy Cost

Order of Magnitude


Sandgate Grade SeparationCompleted

80 km/h approaching Minimbah BankCompleted

Muswellbrook Loop & JunctionCompleted

80 km/h approaching Nundah BankCompleted

Antiene to Grasstree duplicationQ1 2009$ 29,891,000

Bidirectional signalling Maitland to BranxtonQ3 2009$ 22,500,000

Bidirectional signalling Grasstree – St HeliersQ3 2009

St Heliers – Muswellbrook duplicationQ3 2009$ 27,000,000

Minimbah Bank 3rd roadQ4 2009$100,000,000

Newdell JunctionQ1 2010$ 7,200,000

Drayton Junction upgrade2011$ 6,000,000

Minimbah – Maitland 3rd road2012$270,000,000

Muswellbrook – Ulan

Ulan line CTCCompleted

Mangoola (304km) loopQ4 2008$ 9,030,000

Rylestone Rd (381 km) loopQ4 2008$ 9,000,000

Wollar (410 km) loopQ4 2008$ 10,726,000

Aerosol Valley (370 km) loop2010$ 9,000,000

Worondi (348 km) loop2010$ 9,000,000

Radio Hut (319 km) loop2012$ 9,000,000

Muswellbrook – Bengalla duplication2012$ 30,000,000

ARTC Investment

Artc investment1

Project2007-2012 Strategy2007-2012

TimingStrategy Cost

Order of Magnitude

Muswellbrook – Narrabri

Togar loop extensionCompleted

Murulla loop extensionCompleted

Gunnedah loop (RIC)Completed

Willow Tree loop extensionCompleted

Werris Creek loop extensionCompleted

Ardglen loop extensionQ2 2008$ 9,782,000

Breeza loop extension (RIC)Q3 2008$ 3,500,000

Curlewis loop extension (RIC)Q3 2008$ 3,500,000

Werris Creek to Gunnedah CTC (RIC)Q3 2008$ 10,000,000

Gunnedah – Narrabri CTC (RIC)2010$ 10,000,000

Emerald Hill loop extension (RIC)2010$ 3,500,000

Boggabri loop extension (RIC)2010$ 3,500,000

Braefield passing loop2010$ 9,000,000

Murrundi loop extension2011$ 6,500,000

Werris Creek Bypass2011$ 17,200,000

Parkville loop extension2011$ 6,500,000

Scone reconfiguration2011$ 1,700,000

Watermark passing loop (RIC)2011$ 9,000,000

Muswellbrook – Koolbury duplication2011$ 35,000,000

Quipolly passing loop2011$ 9,000,000

Wingen passing loop2012$ 9,000,000

South Gunnedah passing loop (RIC)2012$ 9,000,000

New Liverpool Range alignment2012$290,000,000

Burilda loop extension2012$ 9,000,000


ARTC Investment


Together, the members of the NSW HVCCLT are committed to delivering the most efficient ‘Pit to Port’ shipment of coal for customers.

The current structure ensures current system assets are being used to deliver the maximum amount of coal throughput.

Short term, HVCCLT focuses on planning & performance of current assets

Medium term, investment in complementary infrastructure and operating systems is already underway to ensure we can meet known demand.

Long term, HVCCLT members will engage in rolling review of whole of system investment strategies to create a holistic plan ensuring demand and capacity are always in alignment going forward.


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