(Adds Apache comment and details of companies affected by gas plant outage.)     By Alex Wilson    Of DOW JONES NEWSWIRES  

MELBOURNE -(Dow Jones)- Apache Corp. (NYSE:APA) (APA) said Wednesday it has declared force majeure on gas supply contracts after a fire forced the closure of its Varanus Island gas plant off the coast of north west Western Australia state.

The fire marks the second time this year that an incident at a major gas plant has sparked serious shortages in Western Australia, raising concerns about the state's heavy reliance on two key gas suppliers.

The Varanus Island plant supplies about a third of Western Australia's gas, with most of its output going to commercial customers. A number of companies in the state's booming mining sector are now facing disruption, including Alcoa Inc. (NYSE:AA) (AA), BHP Billiton Ltd. (NYSE:BHP) (BHP.AU), Newcrest Mining Ltd. (Australia:NCM) (NCM.AU), APA Group (Australia:APA) (APA.AU) and Burrup Holdings Ltd.

The rupture of one pipeline at the plant more than 100 kilometers off the coast on Tuesday sparked a fire which then lead to the rupture of two other pipelines.

Apache Energy Managing Director Tim Wall said a small fire is still burning at one of the ruptured pipelines. The company is still assessing the impact of the fires and it is too early to say how long the plant will be closed for.

"Once you find the pipe you can get a repair fairly quickly, I would think, but we have to get in and make sure there is no other damage," he said.

Alcoa (NYSE:AA) , which operates a number of bauxite mines and alumina refineries in Western Australia as part of its joint venture with Alumina Ltd. (NYSE:AWC) (AWC.AU), said it has turned to alternative fuels to meet its shortfall.

" Alcoa (NYSE:AA) is always prepared for these situations and while there is a need to switch to alternative fuels, we are also confident that our production will not be affected," Alcoa (NYSE:AA) said in a statement.

BHP Billiton (NYSE:BBL) said its Worsley Alumina operation is facing reduced gas supplies due to the fire but that the impact on production is not yet known.

A spokeswoman for the mining giant said its Nickel West and iron ore operations, which also use gas from the damaged plant, are operating as normal and discussions are continuing with suppliers to ensure an adequate supply of gas.

Newcrest Mining (Australia:NCM) said the outage has interrupted gas supply to the power station that feeds its key Telfer mine.

"Action is being taken to minimize the impact on operations at Telfer, including drawing down diesel fuel stocks to operate the power station. Available diesel fuel stocks on site are, however, limited," Newcrest said in a statement.

Pipeline operator APA Group said the outage has disrupted gas supplies at two of its major gas pipelines and that the interruption was expected to last a number of days and should not have any material financial impact.

APA said it is in talks with customers of its Goldfields Gas Pipeline to enable them to access alternative sources of gas through the Dampier Bunbury pipeline.

Also affected were companies with stakes in the upstream gas fields that feed the Varanus Island plant, including Santos Ltd. (Australia:STO) (STO.AU) and Tap Oil Ltd. (Australia:TAP) ( TAP.AU).

Santos said production has been halted at the John Brookes field, in which it has a 45% stake alongside operator Apache with 55%.

The company said its share of production from the field in the first quarter of 2008 had been 1.36 million barrels of oil equivalent.

Tap Oil said gas supply from the Harriet field, in which it has a 12.2% stake, has also been halted.

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com

    (END) Dow Jones Newswires   06-04-08 0114   Copyright (c) 2008 Dow Jones & Company, Inc.