No civil action against Apache: WA govt

The West Australian government has decided it won’t take civil legal action against Apache Energy over the Varanus Island gas plant explosion after criminal proceedings were abandoned.

The state government tried to prosecute Apache over the 2008 disaster, which cut the state’s domestic gas supply by about a third, but was recently forced to drop the matter over a technicality.

Mines Minister Norman Moore said a long-awaited WA government-commissioned report into the disaster that was tabled in Parliament on Thursday could pave the way for industrial customers of the gas to take civil action for their losses.

However, the government had no plans to take civil action against Apache as its legal advice was that it didn’t have a case.

“My understanding is we don’t have a civil case against Apache,” Mr Moore told reporters.

“But there may well be others who have suffered direct loss who may have a case and maybe they’ve been waiting for this report to come down before they decide whether to go down that path.”

The report detailed how external corrosion of a concrete cladded, high-pressure 30cm gas pipeline in a tidal zone thinned to a point where it exploded and caused neighbouring pipes to rupture and also explode.

Report co-author Kym Bills said he did not believe there was a “smoking gun” in the Varanus Island case.

He and co-author David Agostini had analysed documentation for the plant that should have rung warning bells with Apache.

However, he believed there was no doubt the company would have taken action if it had realised the pipeline was on the brink of rupture.

Broadly, the report authors concluded Apache had “some issues with safety culture and cost-cutting”.

The company had an excessive emphasis of achieving maximum production availability for the lowest possible cost.

“Part of being a good operator is being ever-mindful of what can go wrong,” Mr Bills said.

Mr Bills made several references to the litigious nature of US-based companies and would not deviate from the issues contained in the report.

While there were questions over regulation of the offshore oil and gas industry, he stressed the primary duty of care obligation was with the operator, not with regulators.

Mr Moore said the report showed there was a “mish mash” of regulation at the time that failed to properly monitor the sector.

The report recommended the state government assume responsibility for regulation of the offshore oil and gas industry in its own waters, within three metres of the shore, while the commonwealth would be responsible for regulation outside that.

Mr Moore said the state government had accepted those recommendations.

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