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Cyclone causes LNG loading delays in Western Australia

A powerful cyclone that swept across parts of Western Australia caused disruptions to shipments of liquefied natural gas (LNG), with at least two cargo loadings being canceled, industry sources and traders told Reuters.

Australia is the world’s second-largest exporter of LNG after Qatar. Any disruptions to its shipments could help to halt a further slide in Asian LNG spot prices, which are at a record low below $3 per million British thermal units (mmBtu), after a fast-spreading coronavirus in China drastically cut gas demand there.

Severe Tropical Cyclone Damien crossed the coast near Dampier in Western Australia state, making landfall on Saturday afternoon and bringing gusty winds of up to 200 km per hour (125 miles per hour).

No damage has been reported but several homes in Western Australia lost power briefly and two of the region’s biggest commodity ports - Dampier and Port Hedland - were shut for one to three days.

The North West Shelf and Pluto LNG plants, operated by Woodside Energy and which together export 21.8 million tonnes a year of LNG, are near the Port of Dampier, which re-opened on Tuesday.

At least two LNG cargo loadings from the North West Shelf project were canceled, an industry source familiar with the matter said. It was not immediately clear if the cargoes will be re-scheduled.

A spokeswoman for Woodside confirmed that there has been disruption due to the cyclone.

“As expected, we were required to briefly shut-in production at certain facilities, but overall we have withstood the impacts of Tropical Cyclone Damien very well,” she said in an emailed statement.

“We are currently producing from both of our Karratha onshore facilities and are working to resume normal safe, reliable and efficient operations as soon as possible.”

The port closures have left a queue of 13 vessels waiting to load LNG in Western Australia, including at Woodside’s plants and also Chevron’s Gorgon and Wheatstone LNG plants, said Rebecca Chia, an LNG analyst with data intelligence firm Kpler.

Chevron did not immediately reply to a Reuters request for comment.

The cargo disruptions follow Royal Dutch Shell temporarily suspending production at its Prelude floating LNG facility off the coast of Australia last week, also curbing exports. Work is currently under way to restore full operations at Prelude.

Reporting by Jessica Jaganathan in Singapore, with additional reporting by Sonali Paul in Melbourne; Editing by Tom Hogue

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