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Apache says to restart partial Australia gas output

Business Materials 1 August 2008 08:35 (UTC +04:00)

US energy firm Apache Energy Ltd plans to resume gas output at its gas plant off Western Australia slightly ahead of schedule, after an explosion in June knocked out a third of gas supplies to a key mining region, Reuters reported.

Gas output from the Varanus Island plant off northwest Australia will be available at an initial rate of 110 million cubic feet (mcf) per day in the next few days, Apache said in a statement on Friday.

That would be about 35 percent of the plant's total output.

"In coming weeks, the production rate would increase to 220 mcf per day with full production of 300 mcf by the end of the year," Apache Managing Director Tim Wall said in a statement.

Apache had earlier said it expected to restore natural gas production of 180 mcf by Aug. 15 and planned to resume full production at by December.

The explosion on June 3 led to power crunch in Western Australia state, causing production shutdowns and reduced operations across a number of industries, including mining, agriculture, construction, hospitality and manufacturing.

The shortage also triggered a dash for alternative energy supplies from industrial customers such as global mining giants BHP Billiton Ltd/Plc and Rio Tinto Ltd/Plc, while Alcoa Inc declared force majeure at its Australian alumina operations.

Following the explosion, state premier Alan Carpenter ordered the reopening of a mothballed 60-megawatt coal-fired power station by the end of July, and two other units in August in a bid to fill up the energy shortfall, where about 60 percent of electricity is generated by gas-fired plants.

Apache has not offered an explanation as to what caused the explosion, and has said that investigations were still pending.

Apache, which saw its earnings more than double in the second quarter, said on Thursday its total oil and gas production was expected to rise 2 percent in 2008, down from its previous estimate of between 4-6 percent, due to the explosion.

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