Apache, CSBP in new gas supply deal

Wesfarmers' fertiliser subsidiary CSBP has entered into a new gas supply arrangement with Apache Corporation following a confidential settlement over a dispute relating to the Varanus Island gas explosion.

The announcement is below:

Apache East Spar Pty Ltd and its affiliates (Apache East Spar) announced today that they have reached a settlement with CSBP Limited of matters regarding the 3 June 2008 pipeline explosion at Varanus Island, Western Australia, and other issues that arose prior to that event.

Prior to the explosion, Apache East Spar supplied natural gas to CSBP Limited for use in its chemical manufacturing operations. CSBP Limited is a wholly owned subsidiary of Wesfarmers Limited.

The explosion was an unforeseeable (force majeure) event that interrupted production but resulted in no injuries or environmental damage. Production has been restored to pre-incident levels.

No money exchanged hands as a result of the settlement. Apache East Spar has agreed to enter into a new gas contract at the end of the term of CSBP Limited's current contract at the existing contract's price to make up for gas volumes not supplied during the force majeure period.