A powerful tropical cyclone has wreaked havoc in Western Australia, halting operations at the nation’s two largest liquefied natural gas (LNG) facilities operated by Chevron and Woodside. This disruption intensifies the global LNG supply crisis already affected by Middle Eastern conflicts.
Following Qatar’s cessation of LNG production in March due to facility damage from Iranian strikes, Australia ascended to become the world’s second-largest LNG exporter. This has left the global LNG supply landscape strained.
Compounding the issue, Iran’s blockade of the Strait of Hormuz has further destabilized LNG shipments originating from the Middle East.
Chevron is currently engaged in efforts to restart operations at its Gorgon and Wheatstone LNG facilities in Western Australia. These outages are believed to be a result of Tropical Cyclone Narelle, a category three storm that made landfall on Friday.
The Gorgon facility stands as Australia’s largest LNG export plant, with an annual production capacity of 15.6 million tonnes across three processing trains. Meanwhile, the Wheatstone facility, smaller in comparison, operates two trains with a capacity of 8.9 million tonnes per year.
Woodside has also reported that its Karratha gas plant experienced production disruptions due to the cyclone’s impact.
The gas plant is the onshore processing facility for the North West Shelf, Australia’s oldest and second-largest LNG project, producing 14.3 million tonnes a year, down from 16.9 million tonnes a year after it shut down one of its five production trains.
MST Marquee analyst Saul Kavonic estimated the cyclone was disrupting more than 30 million tonnes a year of Australian LNG supply.
Combined with the shock from the Middle East, he said more than a quarter of global LNG supply was affected.
“This will exacerbate gas market tightness in Asia and Europe, especially if it takes more than a matter of days to normalise Australian production levels again,” Kavonic said.
A Chevron Australia spokesperson said an outage occurred at the Wheatstone platform, about 225km off Australia’s west coast, on Thursday, causing a suspension of onshore gas production.
“All personnel were demobilised from the Wheatstone Platform ahead of the cyclone passing, which has been operated remotely from our Perth office since Tuesday afternoon,” the spokesperson said.
Three hours later, an outage shut down one of three LNG production trains at the Gorgon facility on Barrow Island, about 50km offshore.
“We will resume full production at both facilities once it is safe to do so,” a Chevron Australia spokesperson said.
Woodside said production at the North West Shelf project would restart once it is able to send workers back to its offshore facilities.
It said operations were continuing at its Macedon domestic gas plant and its Pluto LNG facility.
“If there is any material impact to production or assets, Woodside will update the market,” a spokesperson said.
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