Varanus gas blast case dismissed due to flaws

THE WA Government has dropped its prosecution case relating to the 2008 Varanus Island gas explosion, because of a belief that a technicality would prevent the case from being able to proceed successfully. WA Mines and Petroleum minister Norman Moore said in a statement that he was extremely frustrated and angry that Varanus Island operator Apache Northwest and its co-licencees Kufpec Australia and Tap Oil (which has since sold its stake in the venture) would avoid facing charges.
The State Government’s case related to a pipeline explosion on June 3, 2008 at the Varanus Island gas processing facility, about 115km west of Dampier in northwest WA.
The incident cut the WA’s gas supply by 30 per cent for more than a month, costing billions of dollars and bringing the state’s energy security issues into the spotlight. Mr Moore said that new information provided during pre-trial proceedings led to the Department of Mines and Petroleum’s decision to discontinue the case. He said that after extensive consideration, the unlikelihood of being able to prove two essential elements of the prosecution became apparent.
“This included the State being able to negate the statutory defence that the company’s senior executives did not hold ‘the honest and reasonable but mistaken belief’ that the section of the pipeline in question was ‘in good condition and repair’,” Mr Moore
said.
“It was also considered that there was no reasonable prospect the State could prove the section of the pipeline which ruptured was licensed under the Petroleum Pipelines Act 1969, due to a technicality in a variation document from 1992. The variation used the terms
‘pipeworks’ rather than ‘pipeline’.” Mr Moore said Apache’s continued litigation during the past two years had hindered every effort by the State and Federal Governments to thoroughly investigate the incident and publicly release findings. He said that despite the withdrawal of prosecution action, he was still unable to release findings from the Offshore Petroleum Safety Regulation – Varanus Island Incident Investigation Report (by Kym Bills and Dave Agostini), as legal obligations to the Supreme Court demanded that Apache Northwest be afforded reasonable opportunity to be heard in relation to any adverse comments in the report.
However, he said that a copy of the report was currently being provided to Apache and that upon receipt of the company’s response, he would be in a better position to share the information.
Meanwhile, there have been reports that the project responsible for Australia’s worst oil spill is due to restart production in October this year. In August 2009, a blowout from the Montara wellhead platform (254km northwest of the WA coast) caused oil to leak into the Timor Sea for more than two months. The Federal Government granted Thai operator PTT Exploration and Production (PTTEP) permission to restart the project last year, on the proviso that it met stringent conditions.
PTTEP chief executive Anon Sirisaengtaksin reportedly told shareholders at a company meeting in Bangkok in late March that the delay to the project’s start-up was due to the requirements of the company to meet the strict safety standards; however, first oil was expected in the third quarter of this year.
According to PTTEP Australasia, the Montara project’s FPSO has the capacity to produce 40,000 barrels of oil per day.

 

By Danica Newnham

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