23/03/2009 - 09:34

Verve seeks $40m compensation from NWS

23/03/2009 - 09:34

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Verve Energy has accused the North West Shelf joint venture of "unconscionable conduct" after the partners allegedly hiked up gas prices following the Varanus Island explosion last year.

Verve seeks $40m compensation from NWS

Verve Energy has accused the North West Shelf joint venture of "unconscionable conduct" after the partners allegedly hiked up gas prices following the Varanus Island explosion last year.

A spokesperson for Verve confirmed to WA Business News the utility filed a writ in the Supreme Court on Friday, seeking between $30 million and $40 million in damages from NWS.

Verve alleged that NWS breached the gas supply agreement on two occasions last year, one in January and the other between June and September.

The utility claims that NWS had charged a higher gas price on both occasions as compared to the contracted gas price.

The Verve spokesperson said NWS was "overpaid" and "unjustly enriched as a result of the failure of their conduct to supply gas as required".

The utility has also alleged NWS breached the trade practices act and is seeking to clarify the gas supply agreement, which is currently putting hundreds of millions of dollars at risk.

The spokesperson added the writ was filed after an attempt at mediation and settlement failed.

He added that there was "too much at stake to let it go in the interests of the state and tax payers".

Woodside Petroleum is the operator of the NWS joint venture, which includes companies Chevron, Shell, BHP Billiton and BP.

In an emailed statement, Woodside said it is "working cooperatively with Verve to resolve the matter in a timely manner".


"It is not unusual for parties to occasionally have differing views on the interpretation of commercial terms and for contractual disagreements to arise," the company said.

"The NWS Domgas JV values its long-standing relationship with Verve and will continue to honour its ongoing contractual commitments."

 

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