Wesfarmers: $20m Gas Crisis

Wesfarmers Ltd says its pre-tax earnings will be cut by up to $20 million a month, as the company feels the impact of gas outages following an explosion that closed down the Varanus Island gas plant.

The Varanus Island gas plant has been closed since June 3 following the explosion, which cut off 30 per cent of the state's domestic gas supply.

Operator Apache Energy Ltd expects partial production to resume in mid-August and the plant to be operating at full capacity by December.

The gas shortage has mostly affected Wesfarmers' chemicals and fertilisers division and its energy division, CBSP which has been forced to ship in more ammonia after it suspended production of the chemical and sodium cyanide.

Mr Goyder said CSBP has secured a an ammonia shipment of around 23,000 tonnes which will arrive later this month.

The shipment should enable CSBP to produce suffiicent ammonium nitrate for the mining sector throughoutt July and into early August.

Meanwhile the commissioning of a $138 million, 175 tonne per day Kwinana LNG plant has been delayed while the the commissioning of the new ammonium nitrate prill plant at Kwinana was continuing and is due to begin production in the next week or so.

Mr Goyder said the another Kwinana LPG extraction plant was operating at lower output with one train shut down due to reduced gas flows and loss of high LPG content gas from Apache.

The impact on Wesfarmers' insurance division is being assessed, but the company expects it to be minor as it has little exposure to large industrial operations.

Mr Goyder said Wesfarmers had not had to stand down workers.