Chevron Corp. said Tuesday it has shut down LNG production at its Wheatstone export terminal in Western Australia for repairs at a time when other outages are keeping the global natural gas market tight.
The company said it needs to repair the fuel system on an offshore platform that feeds natural gas to the liquefied natural gas terminal and other onshore facilities. A spokesperson said the company does not have an estimate for when the repairs would be finished.
Production at the two-train, 8.9 million metric tons/year export terminal has been suspended along with domestic gas production.
“Relevant stakeholders have been notified, and we will resume production following the safe completion of repairs,” a Chevron spokesperson told NGI.
Wheatstone exports all of its cargoes to Asia, mainly to Japan, which accounted for nearly 70% of all the facility’s offtake last year, according to Kpler data. Japan’s Kyushu Electric Power Co. and an affiliate of Jera Co. Inc. have stakes in the facility.
The shutdown comes after Chevron restarted Train 2 last week at its Gorgon LNG export terminal, which is also located in Western Australia. The train tripped offline early last week after it underwent repairs that took most of May to fix a mechanical fault. Gorgon also is slated for regular maintenance in July and August, when the equivalent of half a train is expected to be offline.
Severe heat in parts of Asia and outages elsewhere in the world have kept global gas prices elevated in recent weeks. An unplanned outage offshore Norway pushed the Title Transfer Facility (TTF) in Europe to a six-month high last week.
The TTF prompt contract gained less than 1% on Tuesday and was stable at just below $11/MMBtu. The Japan-Korea Marker also gained slightly and held at $12 amid strong spot demand in Asia.
TTF was up again on Wednesday after Uniper SE said it is terminating its gas supply contracts with Gazprom PJSC following a favorable ruling in arbitration. Uniper, one of Europe’s largest gas buyers, was awarded about $14 billion in damages for unsupplied gas from Gazprom, which cut most supplies to Europe in 2022 after Russia invaded Ukraine.
War in Ukraine and Israel, along with diminished supplies from Russia to Europe, have kept prices volatile. Bloomberg reported Tuesday that the European government and company officials are in negotiations to maintain gas flows to the eastern part of the continent through Ukraine. Russia’s transit agreement to move gas through the country expires at the end of this year.
Elsewhere, periodic maintenance scheduled for U.S. LNG terminals this summer, 45 days of work that started last week at Trinidad and Tobago’s Atlantic LNG and a stretch of heavy maintenance in Norway are likely to squeeze supplies in the coming weeks.
