Sydney (AFP) – Some of the world’s largest LNG plants were forced shut on Friday by a cyclone off western Australia, squeezing fuel supplies already stretched thin by war in the Middle East. Energy giant Chevron said it suffered outages at its Gorgon and Wheatstone gas plants, which collectively supply more than five percent of the world’s liquefied natural gas. Fuel company Woodside said its Karratha plant, which processes fuel from one of the world’s biggest offshore gas operations, had also fallen offline.
Australia is one of the world’s largest LNG exporters, supplying Asian nations reeling from fuel disruptions caused by Iran’s Strait of Hormuz blockade as Tehran retaliates against Israeli-US attacks. Gas sector analyst Josh Runciman said the cyclone had come at the “worst time,” warning that even a minor hit to output could ripple through global markets. “This current disruption does little to reassure LNG importers about the reliability of LNG supply,” said Runciman from the Institute for Energy Economics and Financial Analysis.
US President Donald Trump somewhat soothed energy markets on Thursday by pushing back a deadline for Iran to open the shipping channel, which once carried one-fifth of the world’s oil and gas. Oil prices eased after Trump postponed his demand to April 6, although most equities also dropped as hopes for an imminent ceasefire faded. The US-Israel war on Iran has caused major disruptions to global supplies of both oil and LNG. Qatar, one of the world’s top LNG producers, has seen gas exports plunge as Iran targets energy installations and fuel tankers steer clear of the strait.
A sprawling industrial complex sitting just off Australia’s western coast, Chevron’s Gorgon plant is capable of pumping out more than 15 million metric tonnes of gas each year. At full capacity, the smaller Wheatstone project produces almost nine million metric tonnes.
– ‘Vital’ supply – “Chevron Australia is working to restore production at the Gorgon and Wheatstone gas facilities following production outages,” Chevron said in a statement. “We will resume full production at both facilities once it is safe to do so.” Woodside’s Karratha plant serves the massive North West Shelf gas project, described by the company as one of the largest LNG operations in the world. “If there is any material impact to production or assets, Woodside will update the market in accordance with its continuous disclosure obligations,” the company said in a statement.
The ongoing war meant Australian LNG exports had become “more vital than ever,” International Energy Agency chief Fatih Birol said earlier this week. “But Australia alone will not be able to offset the entire lack of LNG coming from the Middle East,” he said during a trip to capital Canberra. Some 40 percent of Japan’s LNG comes from Australia, according to the Asia Natural Gas and Energy Association. LNG prices in some parts of Asia have more than doubled since the joint US-Israel strikes against Iran on February 28.
Tropical Cyclone Narelle was inching towards the coast of Western Australia on Friday afternoon, whipping up winds as strong as 200 kilometres (125 miles) per hour. With LNG profits set to soar on the back of the Middle East crisis, Australia is reportedly mulling a new windfall tax on fuel exporters.
© 2024 AFP
