Resource Consent Application - Removal/Remediation of Flare/Blowdown Pit at Kapuni Well site KA2 for Shell Todd Oil Services Ltd

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2 27 March 2012 Project No South Taranaki District Council Private Bag 902 Hawera, 4640 Attention: Blair Sutherland Dear Blair Subject: Resource Consent Application - Removal/Remediation of Flare/Blowdown Pit at Kapuni Well site KA2 for Shell Todd Oil Services Ltd 1 Introduction This letter has been prepared by URS New Zealand Limited (URS) on behalf of Shell Todd Oil Services Ltd (STOS) in support of a resource consent application for the removal of the flare/blowdown pit and potential removal of associated contaminated soil at Kapuni Well site KA2 pursuant to Regulation 11 of the Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations The works will include the removal of the flare/blowdown pit earthen bunds and potential removal of contaminated soil from beneath and adjacent to the bunds for investigation and/or remediation purposes. This letter describes the activities that will be undertaken, the potential environmental effects associated with the activities and the measures proposed to mitigate these effects. Site: Kapuni Well Site KA2, Rapid # 140, off Palmer Road, Kapuni Legal Description: Lot 1 DP TNF2/103 (Certificate of Title Attached) Applicant: Shell Todd Oil Services Ltd (STOS), Private Bag 2035, New Plymouth Address for Service: URS New Zealand Limited, City Chambers, 142 Featherston Street, P.O. Box 3367, Wellington, 6140 Attention: Suzanne Lowe, Ph: , Suzanne.Lowe@urs.com 2 Site Description The site is an operating production well site (gas) and is owned and operated by STOS. A site layout plan is attached. A flare/blowdown pit is located on the central northern boundary of the well site and is estimated to extend approximately 1.5 to 2.5 m below surrounding grade and has not been used since approximately URS New Zealand Limited City Chambers, 142 Featherston Street PO Box 3367, Wellington 6140 New Zealand T: F:

3 Blair Sutherland 27 March 2012 Page 2 3 Description of the Proposed Activity 3.1 General Flare/blowdown pits were historically used to contain potentially contaminated vapour, water and condensate associated with gas well development, maintenance and operation. Standing water arising from these activities was generally removed for off-site disposal. STOS has undertaken to decommission the flare/blowdown pit and the associated containment bunds at this site. During decommissioning work STOS also intends to remove soil from the flare/blowdown pit area that is assessed as not suitable for remaining on site. Such soil would be transported to an off-site facility licensed to accept such waste. The sketch below shows a schematic section of the bunds, the flare/blowdown pits, and extent of excavation beneath the pit required to remove soil not suitable for remaining on site. Sketch: Schematic Section of Flare/Blowdown Pit extent of contamination is unknown The extent of excavation will be determined on site based on observation of the condition of the soil (discolouration, odour, free-phase product, etc) and confirmed later through laboratory analyses of soil samples. As a result the actual earthwork quantities are not known. However, the estimated earthworks quantities are on the order of 100 to 500 cubic metres of soil disturbance over an approximate area of 60 to 100 square metres. Works will be undertaken and supervised by qualified personnel in accordance with STOS comprehensive health and safety requirements. A site-specific health and safety plan will be developed and implemented for the works. All works will be conducted in accordance with applicable Department of Labour/Occupational Health and Safety rules. The works are likely to take two to six weeks to complete and would commence following granting of the consent.

4 Blair Sutherland 27 March 2012 Page 3 The proposed works are not significantly different to the majority of maintenance works completed by STOS at the Kapuni well sites. A description of the proposed flare/blowdown pit decommissioning and contaminated soil removal methodology is provided below. 3.2 Stockpile Areas Temporary stockpile areas will be established on site to allow for characterisation of soil to determine whether it is suitable to remain on site or will be removed to an off-site facility consented to accept waste soil. Soil assessment criteria are described in Section 3.4. Stockpile areas will be established at locations not subject to stormwater run-on and remote from drains, soakage areas, etc. If stockpiled soils are inferred to be contaminated the stockpile area would be established/managed as follows: Construction of an earthen (300mm) or staked hay bale bund at the periphery of the stockpile Lining of the bund with PVC, HDPE or EPDM liner with a minimum 300 mm overlap at for each liner sheet (not welded or glued) Stockpiles to be less than 4 m in height and with a stable slope Covering or wetting of stockpiles to minimise odour and dust effects. Stockpiled soils inferred to be not contaminated will be managed similarly but would not be provided with a liner. 3.3 Earthworks Proposed earthworks include decommissioning of the existing flare/blowdown pit bunds and removal of soil assessed to be not suitable to remain on site. It is anticipated that the majority of soils will be suitable for reinstatement on site. Soil assessment criteria are described in Section 3.4. The sequence of earthworks will be as follows: Isolation/protection of stormwater drains in the immediate vicinity of the works. Standing water present in the flare/blowdown pits will be pumped from the pit and transported off site for disposal/treatment at a facility licensed to accept such waste. Excavation of existing flare/blowdown pit bunds to stockpile, segregation of soil visually assessed as contaminated to separate stockpile. Test pitting of soils adjacent to the flare/blowdown pit to determine the extent of potentially contaminated soil. Excavation of overburden soil to stockpile, segregation of soil visually assessed as contaminated to separate stockpile. Excavation of contaminated soil to stockpile. The maximum anticipated depth of excavation is 1 m below the groundwater table. Wet soil would be allowed to drain back to the excavation from the excavator bucket prior to placement in stockpile.

5 Blair Sutherland 27 March 2012 Page 4 Collection of soil samples from stockpiles, excavations and testpits to characterise the extent, if any, of contaminated soil. Observation of water within the excavation (if any) to determine the presence of sheen or other indication of free-phase hydrocarbons. Removal of free-phase hydrocarbons to an off-site facility licensed to accept/ treat such waste. Backfill of the excavation below the water table with imported clean rock and/or gravel material or suitable stockpiled soil. Backfill and compaction of excavation with stockpiled soils assessed to be suitable or with imported hardfill. When suitable excess soil from excavations is available the remaining soil would be filled and blended on site to match surrounding grades. The area surrounding excavations will be graded to direct ground surface stormwater away from the excavations. Dust and odours will be controlled by limiting works during high winds and/or wetting soils as required to minimise off-site effects. 3.4 Contaminated Soil Characterisation Soils will be characterised for off-site disposal or on-site filling based on the following criteria: Ministry for the Environment Guidelines for Assessing and Managing Petroleum Hydrocarbon Contaminated Sites in New Zealand, Revised 2011 (hereafter referred to as the Oil Industry Guidelines) The hierarchy set out in the Ministry for the Environment Contaminated Land Management Guidelines No. 2, 2011 Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations 2011 Excavated soils not meeting the above criteria will be disposed of off-site at a facility licensed to receive such waste. Soils identified for off-site disposal will be characterised as required by the receiving facility. Soil samples in support of soil characterisation will be collected and analysed in accordance with Contaminated Land Management Guidelines No.5: Site Investigation and Analysis of Soils (2011). 3.5 Off-site Disposal of Contaminated Soil Disposal Locations Soil not suitable for remaining on site will be disposed of at an off-site facility consented to receive such waste soil. Preliminary off-site soil disposal locations include the following: Colson Road Landfill, New Plymouth Bonny Glen Landfill, Marton Remediation New Zealand, Mokau Rd, Uruti BTW Oeo Facility, Pihama BTW Brown Road Facility, Waitara

6 Blair Sutherland 27 March 2012 Page 5 The actual off-site disposal location will be determined based on the soil characterisation described in Section 3.4 and the requirements of the receiving facility Transportation Off-site transport of waste soil and waste liquids will be in accordance with the Land Transport Rule: Dangerous Goods All off-site loads shall be covered and free liquids shall be removed from waste soil loads for separate off-site disposal prior to transportation. Wheels will be inspected prior to leaving the site and cleaned if required to minimise off-site tracking of soil. The contractor will implement appropriate traffic management during the works, in accordance with industry practice. 4 Requirement for Consent under the National Environmental Standards The Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations 2011 came into effect on 1 January Regulation 8(3) sets out the requirements for disturbing soil on potentially contaminated sites (those sites listed as being on the hazardous activities industries list) that must be met in order for the activity to be a permitted activity. It is considered that the soil disturbance and soil removal required for the works described above will exceed the permitted activity threshold of 25 m 3 (disturbance) and 5m 3 (removal) per 500 m 2 of land per year, respectively. Therefore, resource consent will be required. In order to be considered as a controlled or a restricted discretionary activity under the NES, a detailed site investigation of the piece of land must exist. In this case, a detailed site investigation for the flare/blowdown pit area has not been undertaken. Therefore, consent is required as a discretionary activity pursuant to Regulation Assessment of Environmental Effects This section describes the potential environmental effects of the activity and the mitigation proposed. Overall the proposed works are likely to have a positive effect on the local environment through decommissioning the flare/blowdown pits and through removal of soil, not suitable to remain onsite, to an appropriate off-site disposal facility. Risk to Human Health Historic discharges to the flare/blowdown pit may have contaminated adjacent soils. During the proposed activities site workers may be exposed to contaminated soils, which may present a human health risk. The proposal includes development and implementation of a site-specific

7 Blair Sutherland 27 March 2012 Page 6 health and safety plan in accordance with applicable rules to manage these (and other) risks. In addition, STOS comprehensive health and safety requirements will be implemented during these works. The proposal may also involve off-site disposal of contaminated soil; thereby, reducing the overall risk profile of the site in terms of soil contamination. Based on the above it is considered that risks to human health associated with the proposed works will be temporary and less than minor. Transportation, disposal and tracking of soil and other materials It is anticipated that the incremental effect of proposed works on traffic in the area of the site will be less than minor. If required, traffic management will be in accordance with industry practice. Contaminated soils and liquids will be removed for off-site disposal. potential for releases/exposure during transportation and disposal. Therefore, there is the In summary, the proposed controls include the following: Transportation of waste soils and liquids off site in accordance with applicable rules Covering waste soil loads during transportation and utilising water-tight truck beds as required Checking and cleaning wheels, as required, to minimise off-site tracking of soil and debris Disposal of soils and/or liquid wastes at facilities licensed/consented to receive such wastes Based on the implementation of the above controls, the effects from transportation, disposal and tracking of soil and other materials to the environment are considered to be less than minor. Surface Water Quality During the works there is potential that stormwater may come in contact with contaminated soil and/or liquids. The proposed controls include the following: Directing stormwater away from stockpiles, excavations and disturbed soil. Isolation of stormwater drains and other features that may be impacted by the works. Stockpile management controls, including lining, covering and height limitations. Covering waste soil loads during transportation. Based on these mitigation measures it is considered that the effects of proposed works on surface water quality will be temporary and less than minor. Air quality management odour and dust During the works odour and dust may be generated. The proposed controls include limiting works during strong winds, appropriate stockpile management procedures, and, if required, wetting or covering exposed soils. The site is located in a rural area away from any nearby residential dwellings. Based on these mitigation measures it is considered that the off-site effects of odour and dust will be temporary and less than minor.

8 Blair Sutherland 27 March 2012 Page 7 Noise Noise will be generated by mechanical plant used on site for excavation, backfilling, stockpiling and off-site transport. Although the duration of the works is anticipated to be four to six weeks, physical works will likely only occur during the first and last week of that period (with the interim period used to conduct soil quality laboratory analyses). The site is located in a rural area away from any nearby residential dwellings. Based on this it is considered that the off-site effects of noise will be temporary and less than minor. 6 Consultation with Potentially Affected Parties The site is owned and operated by STOS. No other parties are considered to be affected or potentially affected by the proposed works due to the way the works are planned to be undertaken and given the mitigation measures that will be implemented to control the works. 7 Suggested Draft Conditions for Consent The following are suggested draft conditions for consent: The works shall be undertaken in general accordance with this resource consent application. Applicant to notify STDC of the intended start date, no less than one week prior to works commencing. Applicant to dispose of contaminated natural soil to a facility authorised to receive the soil, and must notify STDC of the soil disposal facility to be used. Applicant to submit a report to STDC following completion of the works, documenting the decommissioning of the flare/blowdown pit. 8 Conclusion Overall the proposed works are likely to have a positive effect on the local environment through decommissioning the flare/blowdown pits and by implementing mitigation measures during the works in accordance with current best practice. The potential effects on the environment from the proposed are considered to be less than minor and appropriate mitigation measures will be implemented as outlined above. STOS owns and operates the site. No other parties are considered to be affected or potentially affected by the proposal. Therefore, it is requested that this consent is processed as a non-notified application in accordance with Section 95(2)(A) of the Resource Management Act because the adverse effects of the activity on the environment will be less than minor. As such, it is considered that consent should be granted. Prior to the approval of the consent it is requested that a copy of the draft conditions be provided for our review. Please contact the undersigned if you have any questions.

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10 / KA8/12/15/18 KA4/14 KA1/7 KA9/16 KA5/10 KA13 KA2 KA6/11/17 KA3 This drawing is subject to COPYRIGHT km Scale 1:50,000 Whilst every care is taken by URS to ensure the accuracy of the digital data, URS makes no representation or warranties about its accuracy, reliability, completeness, suitability for any particular purpose and disclaims all responsibility and liability (including without limitation, liability in negligence) for any expenses, losses, damages (including indirect or consequential damage) and costs which may be incurred as a result of data being inaccurate in any way for any reason. Electronic files are provided for information only. The data in these files is not controlled or subject to automatic updates for users outside of URS. SHELL TODD OIL SERVICES LIMITED (STOS) Final STOS KAPUNI FLARE/BLOWDOWN PIT INVESTIGATION SITE LOCATION PLAN Figure: File: \Site_Locations.mxd Drawn: SS Approved: SL Date: 19/03/2012 Rev. A 1 A4

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12 COMPUTER FREEHOLD REGISTER UNDER LAND TRANSFER ACT 1952 Search Copy TNF2/103 Identifier Land Registration District Taranaki Date Issued 17 February 1981 Prior References TN266/29 TNC1/857 Estate Fee Simple Area hectares more or less Legal Description Lot 1 Deposited Plan Proprietors Shell Todd Oil Services Limited Interests Appurtenant hereto is a right to take, convey and lead water and other rights created by Transfer at pm Transaction Id Client Reference Search Copy Dated 19/03/12 11:51 am, Page 1 of 2 Register Only

13 Identifier TNF2/103 Transaction Id Client Reference Search Copy Dated 19/03/12 11:51 am, Page 2 of 2 Register Only