Last week, Wesfarmers' chief executive Michael Chaney said the extraction plant might be shut down after 2005 unless the North-West Shelf partners extended a 20-year agreement to put mandated volumes of LPG into the Dampier-to-Bunbury gas pipeline.

However, Mr Ripper said the issue was one of commercial negotiation between the various stakeholders, rather than government intervention. "No case has been presented for the government to interfere in the market and overturn commercial arrangements," Mr Ripper said.

"At the time of privatisation of the pipeline, it was envisaged that these matters would be handled commercially and contractually, not through legislation or the use of government persuasive powers."

The Kwinana plant, which supplies LPG to the domestic market and Japan, has been a lucrative earner for gas distributor and retailer AlintaGas due to the profit sharing arrangement with Wesfarmers. Both Wesfarmers and AlintaGas are hopeful that the plant can continue after 2005 by sourcing LPG from alternative suppliers.