Wesfarmers Energy is comprised of four gas businesses and a power generation business.

The gas and power activities include the production and distribution of industrial, medical and specialty gases by Coregas in eastern Australia and Air Liquide WA (ALWA) (40 per cent interest) operating in Western Australia and the Northern Territory; the production, import and export of liquefied petroleum gas (LPG) and production of liquefied natural gas (LNG) by Wesfarmers LPG (WLPG); and distribution and marketing of both LPG and LNG by Kleenheat Gas; and power generation for remote towns and mines by enGen.

With more than 900 permanent employees, 86 direct operating facilities and more than 700 business partners, we aim to develop our customer relationships and work towards operating sustainable businesses. This includes a strong focus on safety, health, the environment and the communities in which we operate.

We continue to evaluate and develop more effective products that offer sustainable environmental benefits for our customers across our division.

For more information on Energy view their online Sustainability Report 2009.

During the year we focused on developing our people and improving the safety of our operations.

We launched a targeted development framework designed to equip our employees with the core capabilities necessary to grow the businesses. To date 16 programmes from the framework have been rolled out to 560 employees.

We had a significant reduction in our LTIFR from 6.3 to 2.2 with ALWA, enGen, and WLPG maintaining a zero LTIFR.

Another major initiative was the commissioning of a 175 tonne per day LNG plant at Kwinana in September 2008. The project includes gas processing, storage, loading facilities and distribution of LNG. As an alternative to diesel, LNG is used to fuel more than 130 heavy duty vehicles (HDVs) and two remote power stations in Western Australia. Branded as EVOL LNG and marketed by Kleenheat Gas, an additional 60 HDVs run on LNG sourced from a third party in eastern Australia.

The remote power stations were converted from operating on diesel to LNG, which resulted in a saving of over 12,000 tonnes of greenhouse gas emissions.

The project was impacted, along with other parts of our business, by the Varanus Island incident which reduced gas supplies in Western Australia during the year.

Safety

This year, ALWA, enGen and WLPG continued their excellent safety record, with ALWA achieving three, and enGen and WLPG achieving six years without a Lost Time Injury. The All Injuries Frequency Rate (AIFR) declined from 58.0 to 46.0 and workers’ compensation claims reduced from 53 to 34.

Diversity

We conducted equal opportunity and diversity related training across our division, involving more than 700 employees. In addition, enGen employs three members of remote indigenous communities to maintain power stations where it supplies electricity.

Engagement

A number of business units increased their focus on employee engagement in the past year. Coregas conducted an employee engagement survey in December 2008, with an 81 per cent response rate. This saw the beginning of the Corepeople project, which used the survey results as a starting point to address barriers to employee engagement.

Kleenheat Gas launched a Levers for Change programme where teams are working on six areas identified for improvement, including: customer service focus; training and development; feedback; interdependencies; significance; and employee involvement.

ALWA implemented behavioural safety visits (BSV) as part of its Energise ALWA programme. This programme was established to meet ALWA’s ambition to be a recognised industry leader in the following key areas: developing our people; enhancing customer satisfaction; boosting focused growth; and improving our systems.

Wesfarmers Energy held an online auction at its Murdoch premises to recycle outdated computer equipment and raised $1,675 which was donated to the St Vincent de Paul Society.

Kleenheat Gas continued its asbestos management review and conducted a risk assessment at 41 sites. Management plans have been developed and 32 personnel completed asbestos awareness training.

Greenhouse emissions

Our total greenhouse gas emissions were estimated to be 566,456 tonnes of carbon dioxide equivalent (CO2e), down three per cent on last year.

These emissions were largely due to the operation of 16 power stations (approximately 45 per cent), our LPG facility and new LNG facility (approximately 25 per cent).

This reduction was largely due to enGen reducing its emissions by over 12,000 tonnes by converting the Darlot and Sunrise Dam power stations from diesel to LNG.

We plan to increase the use of LNG in our vehicle fleets, in addition to the 13 HDVs used to transport LNG to customer sites.

Energy use

WLPG and enGen are our main energy consumers. Total energy consumption was estimated to be 7.14 million gigajoules, down 0.9 per cent on last year. Our total energy consumption per million dollars of revenue was estimated to be 11,947 gigajoules, down 6.2 per cent on last year. This energy use is broken down into fuel (88 per cent) and electricity (seven per cent). Energy use was affected by the closure of a remote power station and the commissioning of the LNG plant.

Energy use is forecast to increase in 2009/10 due to a full year of operation of the LNG plant and the likely expansion of business operations.

Kleenheat Gas continued to progress its Australian Competition and Consumer Commission undertakings (mentioned in last year’s report) in 2009. We maintain a quality management system which conforms to the Australian Standard AS/NZS ISO 9001:2008 and recently renewed our registration until 2012.

Dangerous Goods licences for Kleenheat Gas sites in Western Australia lapsed briefly in early 2009, and have all been renewed. In addition, we received five Remediation Notices in relation to contraventions of the Dangerous Goods Safety Regulations at four sites in Western Australia; these have been rectified.

During the year there was also a noise complaint notice issued to our Armidale depot in New South Wales. This complaint has been investigated and we are now assessing options to address it.

As reported last year, Kleenheat Gas continues to assist in the management of contaminated sites in Queens Park and Osborne Park in Western Australia. Responsibility for the sites’ remediation is yet to be determined, however, at the Osborne Park site we have been served with a writ by the owner of a neighbouring property, which is currently the subject of legal proceedings.

As a result of a noise complaint at WLPG’s Kwinana plant during infrequent shipping activity, an investigation determined that the noise limits were exceeded by 1 to 2 decibels on the site’s southern boundary. We are now assessing options to address this issue.

Our total community contributions amounted to over $260,000 as we continued to develop our existing community partnerships. This included:

• the University of Western Australia’s research programme into ‘Near zero-emission hydrogen and carbon production from natural gas and bio-methane’;
• Kleenheat Gas’ partnership with the Clontarf Foundation and the Regional Achievers Awards;
• Coregas entering its 23rd year of sponsoring the Tradesperson of the Year Award through the Welding Technology Institute of Australia;
• WLPG maintaining its relationship with Kwinana Industries Council and Kwinana Industries Public Safety Liaison Group, and its support of community initiatives; and
• enGen’s support of the communities in which it operates including sponsorship of community events.

During the year we undertook the following major investments:

• WLPG commissioned the LNG production plant in September 2008, and further development opportunities in eastern Australia continue to be evaluated;
• Kleenheat Gas launched the EVOL LNG brand, providing an alternative fuel in the Australian market as part of our LNG project;
• Kleenheat Gas also invested further in the LPG operations in Bangladesh; and
• Coregas constructed and commissioned a gaseous helium filling facility in Yennora, New South Wales.