Alcoa's Australia unit flags 30% production cut at alumina refinery

(Reuters) -Aluminium producer Alcoa Corp said on Monday it expects production at its partially owned Kwinana alumina refinery in Western Australia to be cut by about 30% due to a shortage of gas supply.

A unit of the refinery, majority owned by Alcoa in a joint venture with Alumina Ltd, has been taken offline, hitting process flows, the aluminium producer said in statement.

Alcoa’s Kwinana refinery - with a nameplate capacity of 2.2 million tonnes a year - has resorted to using diesel instead of gas for some of its operations, as a result of an ongoing gas shortage.

Gas supply into Western Australia has been cut due to an equipment failure that knocked out Chevron Corp’s 215 terajoules a day Wheatstone domestic gas plant on Jan.5.

A Chevron Corp spokesperson said on Monday the Wheatstone plant was expected to resume production “in the coming days” and the company was working with customers, the regulator and the broader market to meet demand.

The Wheatstone outage came on top of a loss of supply from Santos Ltd’s Varanus Island operation, which has been shut since late November due to a leak on a gas pipeline from an offshore platform.

Santos said in November the gas leak would be repaired within about six weeks. It had no further updates on Monday.

Alcoa did not set out a timeline for when it will resume full production.

Reporting by Harshita Swaminathan; Additional reporting by Sonali Paul in Melbourne; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee