Newcrest Resumes Using Apache Gas as Supply Restarts

By Angela Macdonald-Smith

Aug. 6 (Bloomberg) -- Newcrest Mining Ltd., Australia's largest gold mining company, said it switched back to using gas from Apache Corp. at its Telfer mine in Western Australia after a two-month disruption due to a gas pipeline explosion.

As much as a half of Telfer's normal gas requirements will be available under the supply contract with Apache after the Houston-based company partially resumed supplies from the Varanus Island gas plant off Australia's northwest coast, Melbourne-based Newcrest said today in a statement to the Australian stock exchange.

Apache said Aug. 1 it would restart a third of production at Varanus Island this week after repairing part of the plant and pipeline systems damaged in the June 3 explosion and fire. The shutdown had cut gas supplies to Western Australia, generator of more than a third of the nation's exports, by about 30 percent.

``Telfer's remaining requirements are expected to be supplied by Apache around mid-August as it further increases its gas supplies,'' Newcrest said today in the statement.

Newcrest terminated part of its interim gas supply arrangements with the North West Shelf venture. It will continue to get some gas from the Woodside Petroleum Ltd.-operated venture until Apache resumes full supplies to Telfer later this month, the company said.

Apache's Australian unit said Aug. 1 it would resume supplies initially at 110 million cubic feet a day, to double later in August, then to reach full output of 330 million cubic feet a day by the end of the year.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net