Chevron has restarted production of liquefied natural gas at its Wheatstone project in Australia after repairs prompted by cyclone damage in March.
The repairs took a while due to the severity of the damage. “Extreme winds associated with the cyclone damaged several hundred air-cooled heat exchangers, known as fin fans, making the repair programme a significant undertaking,” the supermajor’s head of operations and maintenance in Australia said in a statement, as quoted by Reuters.
Tropical Cyclone Narelle last month 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. Gorgon only had to suspend operations at one of its three liquefaction trains.
The disruption came at the worst possible time as LNG supply from Qatar dried up amid Iran’s closure of the Strait of Hormuz and strikes on Qatari LNG infrastructure that prompted a force majeure declaration on exports.
Over the past month, Asia’s imports of LNG have plunged to their lowest level since the Covid pandemic crashed demand in June 2020, but this time it is because of prices, pushed significantly higher by the Qatari force majeure and the Australian outages.
The 30-day moving average of net shipments of liquefied natural gas to Asia plummeted below 600,000 tons this weekend, ship-tracking data compiled by Bloomberg showed earlier this month. This was the lowest one-month moving average of LNG arrivals into Asia since June 2020, according to the data.
Yet Asian buyers continue seeking LNG cargoes, with about a dozen tankers initially bound for Europe diverting to Asia over the past few weeks. Meanwhile, about 50 empty LNG tankers are sitting idle across Asia because of the Qatari production freeze. The number represents a loss of at least 3.456 million tons of LNG in carrier capacity.
By Irina Slav for Oilprice.com
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