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Nahan pushes for gas reserves

Gas retailers Alinta and Kleenheat could be forced to hold extra gas supplies in reserve in a bid to avoid a repeat of the crippling effects of the Varanus Island explosion seven years ago.

In a move that could have implications for household gas bills, Energy Minister Mike Nahan has confirmed he is looking at measures to increase the security of WA's "small user" gas market.

The explosion at the Varanus Island plant in the Pilbara in 2008 cut the State's gas supplies by a third and wiped about $3 billion from the economy.

At issue is whether Alinta and Kleenheat, which collectively supply about 710,000 households between Geraldton and Albany, should be required to store gas in case of a similar emergency. State-owned electricity retailer Synergy, whose gas-fired plants provide much of WA's power, is already bound by a similar obligation.

The absence of reserves led to Alinta shedding customers such as hotels and laundry businesses at the height of the Varanus crisis to ensure households were spared.

Alinta was also forced to pay record high prices for alternative gas - costs that were later passed on to consumers through higher bills.

Dr Nahan said he had asked the Public Utilities Office to look at whether benefits of the proposed change would outweigh the costs, which would likely be passed on to consumers. However, he noted that since Varanus "a number" of measures had been put in place to "substantially" boost the security of the system, including the entry of new suppliers and the construction of a gas storage facility north of Perth.

An Alinta spokeswoman said the retailer was "well positioned" to respond to future disruptions.

"This is largely due to the availability of gas supply and the flexibility of our gas portfolio strategy," she said.

Kleenheat boss Mark Gadsby signalled he would oppose anything that "unnecessarily" added to gas bills.