Wesfarmers' CSBP business looks to have secured years of cheap gas under a settlement with Apache Energy over the Varanus Island gas explosion in June last year.

The deal provides for Apache's next supply contract with CSBP to provide gas from the East Spar field at current contracted prices "to make up for gas volumes not supplied" as a result of the explosion, which put the Varanus Island processing plant out of action for months, extinguishing a third of WA's domestic gas supply. The terms of the agreement are confidential, but given that wholesale gas prices have risen as much as fivefold over the past two years, it implies a sharp discount when the new contract comes into effect.

The explosion is estimated to have cost WA's economy about $2 billion in lost production and left companies scrambling to secure alternative energy supplies.

In CSBP's case, it was forced to buy more expensive imported ammonia and higher-cost gas to support its chemicals business.

Although it has not quantified the financial effect, the explosion was a major factor in a plunge in its interim profit to just $4 million before interest and tax from $48 million previously.

The notoriously reticent Apache declined to answer questions yesterday, while Wesfarmers' chemical and fertilisers chief Ian Hansen referred inquiries to a media minder, who in turn insisted the matter was one for Apache's consideration.

Apache owns 55 per cent of East Spar, off WA's North-West, in partnership with Santos (45 per cent).

SEAN SMITH