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Bloomberg: North West Shelf Natural Gas Plant Restart Is Delayed (Update1)

By Angela Macdonald-Smith

Jan. 4 (Bloomberg) — Woodside Petroleum Ltd., operator of the North West Shelf venture, said the restart of domestic gas production at the Karratha plant in Western Australia has been delayed by “technical and mechanical issues.”

Output of gas for the Western Australian market is expected to restart later today, with the resumption of liquefied natural gas production after that, Laura Hammer, a spokeswoman for Woodside, said today by telephone from Perth. Australia’s second-biggest oil and gas producer, had previously said domestic gas output should resume late yesterday.

The A$20 billion ($18 billion) North West Shelf venture halted output at the plant at 8 a.m. local time Jan. 2 due to an electrical fault. The stoppage cut almost two-thirds of the state’s gas supplies and put about a third of its biggest power producer’s plants out of operation, causing the state government to urge customers to cut electricity use to avoid blackouts.

“Although overnight we have successfully reestablished the key support services on site, which include partial power generation and domestic gas compression, technical and mechanical issues have delayed the production restart which is now expected today,” Hammer said. “It’s taken some time to get the power generation to a level to actually recommence and sustain production on site.”

BHP Billiton Ltd., BP Plc, Chevron Corp., Woodside’s 34 percent shareholder Royal Dutch Shell Plc and a venture between Mitsui & Co. and Mitsubishi Corp. own stakes in the venture.

Power Shortages

Western Power Corp., operator of the electricity network in Western Australia, yesterday warned of likely rolling blackouts due to the shortage of gas supplies and as temperatures in Perth, the state capital, rose to 41 degrees Celsius (106 degrees Fahrenheit). Later in the day extra capacity was made available on the grid, avoiding the need for supply cuts.

It is “seriously critical” that domestic gas supplies from Karratha are back to normal by Jan. 7 when temperatures are forecast to again reach about 40 degrees Celsius and demand will be higher than yesterday as more businesses return to work after the Christmas and New Year holidays, said Miriam Borthwick, a Western Power spokeswoman.

The North West Shelf venture’s production of liquefied natural gas is due to start after the resumption of domestic gas supplies, which is “a priority,” Hammer said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: January 3, 2008 20:55 EST

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