06/08/2008 - 11:32

Govt orders review into gas security

06/08/2008 - 11:32

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The Carpenter government has ordered a review into the security of the state's gas supplies following two major interruptions this year as gas begins to flow at Apache Energy Ltd's Varanus Island facility today.

The Carpenter government has ordered a review into the security of the state's gas supplies following two major interruptions this year as gas begins to flow at Apache Energy Ltd's Varanus Island facility today.

Premier Alan Carpenter, who is currently at the Varanus facility, has instructed the Office of Energy to carry out the review which will also look into future gas security options.

The government department is already conducting a review into the state's first gas interruption this year, where an incident at the North West Shelf Joint Venture's Karratha gas plant cut supplies for several days in January.

The incident was followed by a pipeline rupture at Varanus Island on June 3 where WA's gas supply was cut by a third.

"Various propositions have been put forward this year, ranging from a second pipeline from the north of the State to the south, to building massive gas storage facilities near Perth," Mr Carpenter said.

"The cost and viability of many of these ideas has been called into question by industry.

"But we need to consider all options - and that is exactly what I have asked the Office of Energy to do."

The office will report back to Government within six months.

Gas has started flowing at Apache's Varanus Island facility, with the plant pumping out 50 terrajoules a day. It is expected to more than double output to 120 terrajoules by the end of business tomorrow.

Apache plans to produce 240 terrajoules a day by the middle of the month and return to full production of 350 terrajoules by December.

Apache has started providing gas to a number of its customers, but Mr Wall refused to name specific companies.

"We have constant conversations with all our customers and try to meet their needs as best we can," Mr Wall told reporters.

Newcrest Mining says it is now receiving 50 per cent of its normal gas requirements from Apache.

Apache's other customers include BHP Billiton and Rio Tinto.

The WA government says the gas crisis has cost the state about $1.8 billion in lost revenue.

The Chamber of Commerce and Industry said last month that the cost to the state's economy was $2.4 billion and the energy shortage had punched a $6.7 billion hole in the state's business production forecasts.

It said up to one-third of WA businesses had been directly or indirectly affected by the crisis.

The National Offshore Petroleum Safety Authority is holding an inquiry into the explosion.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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