WESTERN Australia's government is scrambling to find alternative energy sources for metal producers including BHP Billiton Ltd and Rio Tinto Group after a blast at an Apache Corp plant cut natural-gas supplies by 30 percent.
Apache said on Friday that its natural-gas output from Varanus Island may be halted for at least two months, Bloomberg News reported.
Iluka Resources Ltd, the world's biggest zircon producer, and Minara Resources Ltd are among companies that have reduced or halted output due to the crisis that's threatening production in the state that generates more than a third of Australia's exports.
"For some companies, gas is an integral part of their manufacturing process, and they're the ones that are really suffering at the moment," Western Australia Chamber of Mines and Energy Chief Executive Reg Howard-Smith said after an emergency meeting in Perth yesterday attended by about 20 companies, including BHP, Rio Tinto, Alcoa Inc and Caltex Corp.
Premier Alan Carpenter formed a working group and announced measures to alleviate the crisis in the short term. The state's Kwinana coal-fired station, closed for about two months for maintenance, will reopen in about two weeks and the North West Shelf venture, which owns Western Australia's biggest gas supply plant at Karratha, will contribute additional supplies.
"Industry might consider bringing forward scheduled maintenance, changing shift arrangements or altering thermostat settings and lighting regimes to reduce energy use," Carpenter said.