The perfect storm surrounding the global LNG supply chain, which hit a brick wall two weeks ago when Iranian attacks shuttered 17% of Qatar's LNG output following devastating strikes on the Ras Laffan plant, the largest in the world, just went from metaphorical to literal after storm damage to Chevron’s Wheatstone gas plant in Western Australia is hampering efforts to restart operations and the facility won’t be back online fully for weeks, adding even more turmoil to the global LNG market.
As Reuters reports, tropical Cyclone Narelle was estimated to have disrupted Australian LNG facilities along the northern and western coasts, and disrupted supply equating to more than 30 million metric tons per year. Combined with the shock from conflict in the Middle East, more than a quarter of global LNG supply has been disrupted, MST Marquee analyst Saul Kavonic said on Friday.
“The Wheatstone gas facility near Onslow has had equipment damage from the severe weather, which has impacted restart activities,” Chevron said in a statement, adding that “while damage assessments continue at both the onshore Wheatstone plant and offshore Wheatstone Platform, it is likely to be a number of weeks before production returns to full rates to allow time for repairs to be safely completed."
As we reported last week, Chevron said earlier in the week that one of three LNG production units at its Gorgon plant was halted, as well as a platform that feeds Wheatstone, which is a two-train LNG project which produces 8.9 million tons a year, about 15% of which is meant to be reserved for the domestic market. On Sunday it said the 15.9 million ton Gorgon LNG export facility and domestic plant continued to operate at full rates, adding that all of its three trains returned to full production on Sunday.
The storm also hit infrastructure feeding Woodside Energy Group's North West Shelf export plant. The company said it’s working to resume normal operations, and output continues at its Macedon and Pluto gas facilities.
Woodside also said ship loading at Pluto LNG is restarting following the reopening on Saturday of Dampier port.
Gorgon, Wheatstone and North West Shelf accounted for almost half of Australia’s exports last month, or about 8.4% of the global trade, according to researcher EnergyQuest.
Australia became the world’s second-largest LNG exporter when Qatar shut down production this month after Iranian airstrikes damaged its facilities. The country most impacted from the Australian outage will likely be China, which following the Qatar force majeure production halt has been forced to rely on Australian product to a far greater degree.