Stranded gas tanker in Australia could cause global LNG prices to rise
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LNG prices in North Asia have held near US$16 a million British thermal units over the past month, above their five-year seasonal average.
PHOTO: BLOOMBERG
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Melbourne – 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.
The tanker, Cesi Qingdao, is berthed at the Australia Pacific LNG facility on Curtis Island in Queensland, and currently unable to leave, Origin Energy said on Nov 28 in a statement. Cesi Qingdao had been scheduled to sail to Wenzhou, China, according to ship-tracking data compiled by Bloomberg.
“Only one LNG vessel is able to dock at the LNG facility at a time,” said Origin, a part owner of the Australia Pacific LNG venture with ConocoPhillips and Sinopec. “As a result, no other cargoes can be loaded until the situation is resolved.”
LNG prices in North Asia have held near US$16 a million British thermal units over the past month, above their five-year seasonal average but about half the level in the previous two years, as Europe built up unprecedented inventories. New outages, adverse weather or additional curbs on Russia gas could spur more price volatility and exacerbate global LNG supply risks, Bloomberg Intelligence said in a report in November.
Australia Pacific LNG is one of 10 export plants in Australia, one of the world’s biggest suppliers of the fuel. The facility is operated by ConocoPhillips, which holds 47.5 per cent, and typically loads a vessel for export every three days, Origin said.
Two cargoes have been deferred from a delivery schedule for the financial year to June 2024, and it is expected that additional shipments will also be impacted, Origin said.
Origin, which runs onshore gas fields that feed the LNG facility, will reduce production and is taking steps to sell more into Australia’s domestic market.
The board of Origin, which is based in Sydney, is currently considering a revised takeover proposal from a Brookfield Asset Management-led group, under which EIG Global Energy Partners would acquire Origin’s 27.5 per cent share in Australia Pacific LNG. BLOOMBERG
