By Angela Macdonald-Smith
Dec. 4 (Bloomberg) -- An Australian Senate committee report on Apache Corp.'s gas plant shutdown off Western Australia underlines the need for greater security of supply and competition, a group of gas users in the state said.
The report on the Varanus Island outage from the Senate economics committee shows the need to diversify the state's supply beyond the North West Shelf by developing smaller fields near the state capital of Perth, Stuart Hohnen, chairman of the DomGas Alliance, said today in an e-mailed statement.
Natural gas demand in Western Australia, which has suffered a shortage of the fuel since the June 3 explosion at the Apache plant, is set to double in the next six years, the alliance estimates. Energy supplies in the state are ``prone to serious dislocation'' because of limited supply and the lack of diverse sources, said the Senate committee report, released yesterday.
``Western Australia depends on natural gas for half of its primary energy and 60 percent of electricity generation,'' Hohnen said in the statement. ``Having a secure and competitive gas market is absolutely vital.''
Alcoa Inc., the largest U.S. aluminum producer, Newmont Mining Corp., the biggest U.S. gold producer, Fortescue Metals Group Ltd. and Burrup Fertilisers Pty are among members of the DomGas Alliance. About 95 percent of Western Australia's gas supply comes from two sources in the northwest: the Varanus Island plant and the North West Shelf venture's Karratha plant.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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