UPDATE: W Australia State To Prosecute Apache Over Explosion

PERTH (Dow Jones)-U.S. energy group Apache Corp. (APA) said Thursday that it will defend itself against charges filed by the Western Australian government in relation to the Varanus Island fire and explosion last year.

Apache will "vigorously defend" the state's legal action," an Apache spokesman told Dow Jones Newswires. "The explosion was an unfortunate and unforeseeable event," he said.

Western Australian Mines and Petroleum Minister Norman Moore said earlier Thursday the government has filed charges against Apache and its co-licensees in relation to the pipeline rupture and explosion at the Varanus Island gas processing plant, off the state's northwest coast, on June 3 last year.

The government is alleging they failed to maintain the pipeline in good condition and repair as required by law.

"It is alleged that the 12-inch sales gas pipeline was corroded in the area of the pipeline rupture," the minister's office said in a statement.

The incident disrupted one-third of the state's gas supplies, forcing many miners and industrial users to scramble for fuel alternatives.

"The Varanus Island repair project is now in its final phase and drawing to a conclusion," the Apache spokesman said, adding that production at the facility is now running at more than 90% of the pre-incident rate.

 
  -By Stephen Bell and Alex Wilson, Dow Jones Newswires; 61-8-9244-4243; [e-mail]