Wesfarmers anticipates a $190 million writedown in its Coregas business as a result of amendments to its contracts with BlueScope Steel.

The gas company is in negotiations with BlueScope for the supply of industrial gases to the steel maker’s Port Kembla operations, which are to be significantly restructured.

The negotiations are expected to be completed in the first quarter of 2012.

“As a consequence of the change in operations at BlueScope, and having regard to an associated review of the Coregas business, Wesfarmers industrial and safety presently estimates that there will be a resulting non-cash writedown in the carrying value of Coregas of up to $190 million in the current financial year,” Wesfarmers said in a statement.