Australian oil and gas producer Santos was forced on Tuesday to shut down its newly-commissioned Barossa LNG plant, temporarily shutting the Darwin LNG export plant just as the global gas markets scramble for supply with the Middle East’s LNG out of the picture.
Darwin LNG is now under “temporary shutdown”, necessary to replace equipment on the offshore production vessel at the Barossa project which feeds the export plant, a spokeswoman for Santos told the Australian Financial Review.
It was not immediately clear when production at Barossa and exports from Darwin could resume, according to AFR.
The outage occurs two months after the first LNG cargo from Barossa LNG was loaded on a vessel to Japan. This shipment marked the commercial start-up of the Barossa LNG project, which is operated by Santos and is designed to backfill the Darwin LNG plant as legacy gas supplies decline.
The outage in Australia adds to already strained global supply of LNG, which has been choked by the war in the Middle East.
Related: Magnet Wars: How the U.S. Plans to Break China’s Grip on Rare Earths
Worldwide LNG exports are estimated to have plunged in the past week to a six-month low as Middle Eastern supply collapsed with the de facto closed Strait of Hormuz and the outage at the world’s biggest LNG complex in Qatar.
Qatar has been the primary driver of the lost global LNG supply following the halt of liquefaction production and exports. Supply is also lost from the United Arab Emirates (UAE), whose shipments are choked and unable to move past the Strait of Hormuz.
At the end of last week, Qatar’s state firm QatarEnergy said the damage from Iranian missile strikes on the Ras Laffan LNG complex, the world’s single largest LNG-producing facility, would cost it about $20 billion per year in lost revenue and to take up to five years to repair.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Valero Shuts Major Refinery After Explosion as Fuel Markets Tighten
- Indian Refiners Cautious Over Iranian Oil Despite U.S. Waivers
- UAE: Weaponizing Hormuz is Economic Terrorism Against the World
