Alcoa cuts WA alumina production amid gas crisis

Alcoa has been forced to reduce production at its Kwinana alumina refinery in Western Australia and Wesfarmers has resorted to emergency gas in storage as the impact of an ongoing outage at a major production plant owned by Chevron worsens across the state.

WA’s biggest gas retailer, Alinta Energy, has turned to gas stored in a plant north of Perth to double supply into the state’s domestic gas market, but that has not prevented Alcoa from having to take one alumina refining unit offline.

Alcoa said the unexpected shutdown of the alumina unit combined with other reductions had cut production at its Kwinana plant by about 30 per cent and no timeline was identified for restoring full production.

Alcoa had already switched some gas supply that it usually gets from Chevron’s Wheatstone plant near Onslow to diesel to minimise the impact, but has now had to take an additional step.

Alinta Energy’s move to replace lost supply with gas from storage comes as Wesfarmers has also resorted to emergency storage to keep its operations going as the conglomerate discusses with the WA government and gas producers about the supply disruption threatening its operations.

The WA government had initially anticipated that the Wheatstone domestic gas plant, which shut down unexpectedly late on January 5 and which typically meets 17 per cent of the state’s domestic demand, would start to come back online on Sunday. But Chevron advised on the weekend it needed another two days to resolve the technical issues, which it put down to “an equipment failure”.

Gas supplies in the state were already well below normal because of partial outages at two gas plants owned by Santos, on Varanus Island and at Devil Creek.

WA mines and petroleum minister Bill Johnston described the number of commercial gas plants offline or running at reduced capacity as “unprecedented”, but noted there was no risk to household gas or electricity supply. He said gas suppliers and markets were actively seeking to meet gas demand from industry, while the state’s main gas trunkline, the Dampier-to-Bunbury pipeline, “remains in a stable state”.

Alinta lost about one-third of its regular daily supply when the Wheatstone plant broke down. LNG export operations at the site are unaffected.

Wesfarmers, one of WA’s biggest gas users alongside Alcoa, Coogee Chemicals and fertiliser producer Yara, is eating into its emergency storage to keep operations going.

The Perth-based conglomerate’s chemicals, energy and fertilisers division WesCEF said on Monday that there had been no impact so on its business or customers.

Miner South32 has not been affected to the same extent as Alcoa but is trying to minimise gas use across its alumina operations. It has had to import coal from Indonesia in recent months to help power its Worsley alumina refinery amid a coal shortage in WA.