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Apache Explosion Affects West Australia Gas Supplies (Update3)

By Jason Scott

June 3 (Bloomberg) -- Apache Corp., operator of oil and gas projects on five continents, said an explosion at its plant off the coast of Western Australia will affect natural-gas pipeline deliveries to the domestic market for ``a number of days.''

No one was injured in the explosion on Varanus Island today, the company said in an e-mailed statement. Emergency response and evacuation of personnel is still underway, a subsequent statement said, without elaborating.

Gas from the island, about 100 kilometers from the town of Karratha, is pumped to Western Australia state's capital of Perth, a city of about 1.2 million, via the Dampier to Bunbury Natural Gas Pipeline. The Apache plant provides 30 to 40 percent of Western Australia's gas supplies, news provider AAP said.

``We are doing everything we can to ensure the safety of personnel and minimize the impact of the incident,'' Tim Wall, managing director of the Houston-based company's Australian unit, said in the statement. ``We have notified government authorities and also gas customers who will be affected by the disruption in gas supply.''

No more information regarding the incident will be released today, with a media conference to be held tomorrow morning Perth time, according to the statement.

Major disruptions to domestic residential electricity supplies are considered unlikely, as Apache doesn't supply gas to Verve Energy, the state's principal power station operator, AAP said. Alcoa Inc. and Burrup Fertilisers Ltd. have approached Woodside Petroleum Ltd., Australia's second-biggest oil and gas producer, asking it to fill any potential gap in supplies, it said.

North West Shelf

The pipeline is the only one connecting the Carnarvon Basin on Western Australia's North West Shelf with industrial, commercial and residential customers in Perth and the surrounding region. A spokeswoman for the pipeline, who declined to be identified, wouldn't comment on whether supplies would be affected by the explosion.

Apache, which has made more than 20 acquisitions since 1999, is focusing on boosting its oil reserves through exploration programs in Australia, Egypt and Canada.

To contact the reporter on this story: Jason Scott in Melbourne at jscott14@bloomberg.net

Last Updated: June 3, 2008 07:44 EDT

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