WA government to prosecute Apache Energy

The West Australian government will prosecute oil and gas producer Apache Energy Ltd
for failing to maintain and repair a gas pipeline that exploded last year.
US-headquartered Apache says it will vigorously defend the charges.
WA Mines and Petroleum Minister Norman Moore on Thursday announced the government
had started proceedings to prosecute Apache Northwest Pty Ltd and its co-licensees,
Kuwait's Kufpec Australia Pty Ltd and Tap Harriet Pty Ltd, in relation to the
incident.
The blast in June last year at Apache's Varanus Island gas plant, off Western
Australia's Pilbara coast, slashed the state's gas supply by one-third.
A charge filed on Wednesday in the Federal Court alleged the companies had not
maintained the pipeline in good condition and repair as required under the Petroleum
Pipelines Act, Mr Moore said.
"It is alleged that the 12-inch sales gas pipeline was corroded in the area of the
pipeline rupture which occurred at the pipeline beach crossing on Varanus Island on
June 3 last year," he said in a statement.
The pipeline "was corroded from a nominal wall thickness of 11.1mm down to a wall
thickness of 3-4mm in the area of the pipeline rupture", WA's Department of Mines
and Petroleum executive director petroleum and environment Bill Tinapple told
reporters on Thursday.
Mr Tinapple said Apache, Kufpec and Tap each face maximum penalties of $50,000.
The charge follows an investigation by the WA Department of Mines and Petroleum
after the release of the initial investigation report by the National Offshore
Petroleum Safety Authority (NOPSA) last year.
NOPSA's October report found that Apache may have committed offences under two
pipeline acts.
The report said the explosion was the result of ineffective anti-corrosion coating,
insufficient protection of a transition zone of the beach section of the pipeline,
and not enough inspection and monitoring of the 17-year-old pipeline.
The ensuing gas shortage played havoc with Apache's industrial customers, cutting
the state's business production by about $6.7 billion from forecast levels during
the September quarter alone, according to the state's Chamber of Commerce and
Industry.
A Senate inquiry into the explosion was followed by an independent inquiry into the
blast, which is yet to be completed.
In the Federal Court last week, Apache was successful in blocking disclosure and use
of state information by a joint state and federal inquiry into the incident.
The court upheld an application to prevent an expert panel from using information
held by the state.
Mr Moore said Apache had limited the scope of the inquiry's final report by blocking
access to vital information by Kym Bills and David Agostini, who were appointed as
inspectors under the Petroleum Pipelines Act.
The final investigation report into the Varanus Island explosion is expected to be
finished next month.
Apache government and public affairs manager David Parker on Thursday told AAP the
proceedings would be vigorously defended.
"The explosion was an unfortunate and unforeseeable event," Mr Parker said.
"The Varanus Island repair project is now in its final phase and drawing to a
conclusion.
"I can report that production is now well over 90 per cent of the pre-incident rates."
Mr Parker last week would not be drawn on when it would be returned to full
production, other than to say "the next few weeks".
Apache said shortly after the incident that full production would be restored by
late December.