Gas shortage starts to bite

Posted by James Ferre on 16th June 2008

Industrial gas users are facing a struggle in Western Australia as the Varanus Island explosion has led to the rationing of gas.

Large mining and manufacturing companies have been the hardest hit so far and the WA Food Industry Association has outlined their concerns that the explosion may restrict the competitiveness of the food industry. Major food and beverage operations already affected by the gas crisis include pork processor Craig Mostyn Group and Coca-Cola Amatil, distributor of beverages for The Coca-Cola Company.

Coca-Cola Amatil has consequently scaled down operations at their Kewdale facility in WA due to a shortage of carbon dioxide gas but believe any disruptions to their supply will only be temporary. “While there may be some interruptions to supply from time-to-time, these will be short-term and temporary, and supplies will continue to be met,” Coca-Cola Amatil said in an announcement.

Apache Energy, which operates the Varanus Island plant, has indicated it is likely to take two months to get the plant up and going and, with the plant responsible for about one-third of the state’s gas supplies, Small Business Minister Margaret Quirk has encouraged small business owners to curb their energy use. “The gas shortage has directly affected many of the bigger companies. Some have been forced to lay off staff,” she said. “The gas shortage has a ripple effect: It affects electricity supplies and pushes up the cost of alternative energy sources, like diesel, which flows on to smaller businesses reliant on the products bigger companies provide. We are asking operators to cut back on non-essential use wherever possible, to reduce the strain on available gas supplies.”

“Small business operators will need to implement contingency plans to tide them over during these times, both in terms of their workload and their energy use,” Ms Quirk concluded.

Approximately 50 WA retail business leaders are due to meet this afternoon to discuss ways to deal with the crisis.