A loaded liquefied natural gas (LNG) vessel lost power at an export terminal in Australia and will disrupt some exports, adding to supply concerns ahead of the fuel’s peak demand period, says an article published on the strait times website.
Disruption At Australia Pacific LNG Facility
In a setback for the liquefied natural gas (LNG) industry, a fully loaded LNG vessel, has lost power at the Australia Pacific LNG facility in Queensland, triggering concerns of supply disruptions amidst the approaching peak demand period.
Origin Energy reported on Nov 28 that the vessel, scheduled for Wenzhou, China, is currently stranded at the Curtis Island facility, unable to leave.
Supply Chain Implications
Origin, a stakeholder in the Australia Pacific LNG venture with ConocoPhillips and Sinopec, highlighted the facility’s limitation of only accommodating one LNG vessel at a time. Consequently, loading of other cargoes is halted until the situation is resolved, potentially impacting the LNG supply chain.
Market Impact And Global Dynamics
LNG prices in North Asia have hovered around US$16 per million British thermal units, exceeding the five-year seasonal average but remaining half of the levels seen in the previous two years.
The incident adds to existing concerns, with Bloomberg Intelligence warning of heightened price volatility due to potential new outages, adverse weather, or additional restrictions on Russian gas.
Operational Consequences And Deferred Deliveries
Australia Pacific LNG, operating as one of Australia’s ten export plants, typically loads a vessel for export every three days. With two cargoes deferred from the delivery schedule for the fiscal year ending June 2024, it is anticipated that additional shipments will also be affected.
Origin, responsible for onshore gas fields feeding the LNG facility, plans to reduce production and redirect resources to Australia’s domestic market.
Corporate Landscape And Takeover Considerations
As the incident unfolds, the board of Origin, headquartered in Sydney, is reviewing a revised takeover proposal from a Brookfield Asset Management-led consortium.
The proposed deal involves EIG Global Energy Partners acquiring Origin’s 27.5% share in Australia Pacific LNG, adding an additional layer of complexity to the company’s strategic decisions in these challenging circumstances.
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Source: The strait times
