11/11/2009 - 12:34

Gas negotiations continuing: Woodside

11/11/2009 - 12:34

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The Woodside Petroleum-operated North West Shelf Venture today said it was continuing to negotiate with gas retailer Alinta, owned by Babcock and Brown Power, over future gas supplies from the project following an interim ruling by an arbitrator yesterday

The Woodside Petroleum-operated North West Shelf Venture today said it was continuing to negotiate with gas retailer Alinta, owned by Babcock and Brown Power, over future gas supplies from the project following an interim ruling by an arbitrator yesterday.

Woodside and its Shelf partners have been in dispute with Alinta for over a year over the price the utility must pay for gas, forcing the matter to a formal arbitration. The dispute flows from Alinta's refusal to agree to the significant price rise demanded by the Shelf partners as a condition of extending an existing Alinta supply contract.

The arbitrator's interim ruling was handed down late yesterday, but all parties are remaining tight lipped about the detail.

A spokeswoman for the North West Shelf Venture told WA Business News that the ruling was confidential, but that talks with Alinta were continuing.

"Negotiations with Alinta Sales and its owners, Babcock and Brown Power Ltd, in relation to the interim award remain ongoing," the spokeswoman said. "Due to commercial and confidentiality requirements the NWS (domestic gas joint venture) is not in a position to comment further at this stage."

Babcock & Brown Power also went into a trading halt today, pending its review of the ruling and its likely implications for the company. The company has previously warned that the price rise demanded by the Shelf partners would put it under significant financial strain.

Alinta has a number of contracts with the Shelf which progressively expire over the next few years.

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