Australia is one of the world’s largest exporters of LNG and the main supplier of liquefied gas to Asian countries which are bearing the brunt of the disruptions in hydrocarbon supplies caused by the blockade of the Strait of Hormuz imposed by Iran, in retaliation for Israeli-American attacks.
The Chevron-operated sites, Gorgon and Wheatstone, together supply around 5% of the world’s LNG according to the company, while Woodside’s Karratha plant processes gas from one of the world’s largest offshore gas operations.
“Chevron Australia is working to restore production at the Gorgon and Wheatstone gas infrastructure following production interruptions,” the company said in a statement.
Both plants suffered outages on Thursday afternoon as tropical cyclone Narelle threatened off the coast of Western Australia.
The Gorgon plant, the larger of the two, continued to operate at reduced capacity, Chevron said.
At full capacity, it can produce more than 15 million tonnes of gas per year and Wheatstone almost nine million tonnes.
The Australian oil and gas company Woodside Energy in turn indicated on Friday that its Karratha site, in the state of Western Australia, had also suffered a “production interruption”.
“Should production or facilities be significantly impacted, Woodside will notify the market in accordance with its obligations,” the company said in a statement.
Tropical Cyclone Narelle is moving along the coast of Western Australia on Friday afternoon. It is moving south, gradually moving away from the coastal sites of Gordon, Wheatstone and Karratha, but in its wake carries winds of up to 200 kilometers per hour.
“This disruption” comes “at the worst time” because it further reduces fuel supplies already strained by the war in the Middle East and “does little to reassure LNG importers about the reliability of LNG supplies,” gas sector analyst Josh Runciman told AFP.
LNG prices in certain Asian countries which rely heavily on fuel imports, notably from Australia, have more than doubled since the conflict began at the end of February.
For example, 40% of Japan’s LNG comes from Australia, according to the Asian Natural Gas and Energy Association.
Qatar, on the podium of world LNG exporters behind the United States, has seen its exports fall with the conflict that began almost a month ago, with LNG tankers avoiding the de facto closed Strait of Hormuz.
US President Donald Trump partially calmed energy markets on Thursday after his announcement to extend for a second time the deadline for the ultimatum set for Iran to reopen the strategic maritime passage, but they remained wary on Friday, the barrel of Brent from the North Sea, a world benchmark, still exceeding 100 dollars.
International Energy Agency (IEA) director Fatih Birol said Australia’s LNG exports had become “more essential than ever”.
“But Australia will not be able, on its own, to make up for the entire shortage of LNG from the Middle East,” he said during a trip to Canberra earlier this week.
With LNG industry profits expected to rise in the wake of the crisis, Australian media have reported that Australia will consider introducing a new tax on exporters’ windfall profits.
