A cyclone has disrupted operations at a total of three LNG facilities in Australia, including Chevron’s Gorgon and Wheatstone, worsening an increasingly severe global LNG supply crunch.
Santos was the first to report a shutdown at its Barossa gas field, which feeds the Darwin LNG terminal, earlier this week as a tropical cyclone barreled towards Australia. Chevron reported the outages at Gorgon and Wheatstone earlier today, as quoted by Reuters, with a spokesperson saying that “We will resume full production at both facilities once it is safe to do so.”
Woodside also reported cyclone-related disruptions at a facility linked to its North West Shelf LNG project.
The Gorgon facility is the largest LNG project in Australia, with an annual capacity of 15.6 million tons, while Wheatstone has a capacity for 8.9 million tons. Woodside’s North Wet Shelf project produces 14.3 million tons per year, and Santos’ Darwin LNG facility, which is fed by Barossa gas, has a capacity of 3.7 million tons per year.
Natural gas prices in Asia have swelled by 143% since February 28, and European gas prices have gone up by 85%, and while some observers make a point of noting that even with that increase, prices are lower than they were back in 2022, this does not really matter. The important fact is that a sizable chunk of LNG supply has been taken off the market due to war and weather.
Meanwhile, the Australian government began eyeing a windfall profit tax on energy companies as a result of the soaring prices in the LNG sector. ABC first reported the news last week, saying the Department of Prime Minister and Cabinet had drafted a document for modelling “new levy options” for the gas and coal industries. “Energy producers should not benefit from high international prices at the expense of domestic customers,” the document said.
By Irina Slav for Oilprice.com
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