Around 8% of the world’s LNG supply was disrupted by cyclone Narelle off the western coast of Australia.

What: A powerful cyclone off the western coast of Australia has disrupted production at three LNG facilities driving spot market prices to the roof.

Why: Global supply of the super-chilled fuel was already tight with the blockage of the Strait of Hormuz wiping one-fifth on LNG supply off the market and now the cyclone has disrupted a further 8%.

What Next: With Wheatstone LNG facing weeks offline for repairs, Asian LNG prices on the spot market appear set to remain sky-high for weeks.

A powerful cyclone has swept through western Australia disrupting production at three LNG plants, Bloomberg reported on March 27.

Tropical Cyclone Narelle ripped through the western coast of Australia causing a production interruption at Karratha, the processing facility for Woodside’s North West Shelf LNG export terminal, which has a production capacity of 14.3mn tonnes per year (tpy).

Similarly, Chevron was forced to halt production at one of its three trains at its Gorgon facility taking 5.2mn tpy of super-cooled gas off the market. Additionally, Chevron also stopped production at a platform that feeds the firm’s Wheatstone plant, which has a capacity of 8.9mn tpy.

The damage to the Wheatstone facility is expected to take weeks to repair, which will further tighten the market for the super-chilled fuel. The plant shipped 11 cargoes in February, amounting to about 2% of global supply. All the cargoes were delivered to Asian buyers with Japan purchasing ten and Thailand one.

Australia is the world's third-largest LNG exporter behind only the US and Qatar and the three LNG facilities provide around 8% of the world's LNG supply. The cyclone is projected to have sidelined Australian LNG supply of roughly 30mn tonnes.

Australia’s shut-ins could not have come at a worse time for buyers in Asia. The Middle East conflict between Israel, the US, and Iran has left 20% of the world’s LNG supply off the market, as both Qatar and the United Arab Emirates are unable to ship cargoes with Iran threatening to attack any vessels transiting the Strait of Hormuz.

QatarEnergy boasts a number of major clients in Asia. Buyers in South Korea and China as well as India have all been notified by the Gulf state-run company that it will not be able to carry out deliveries.

LNG spot prices in Asia have soared by over 90% since Israel and the US first attacked Iran in late February.

With exorbitant LNG spot market prices in Asia, countries have been drawing down their storage stock, hoping to delay purchases of new cargoes for as long as possible.

In particular, the world’s biggest importer, China, is on pace to buy its lowest amount of supply since spring 2018. The 3.7mn tonnes of super-cooled gas that Beijing is expected to purchase in March, according to tanker-tracking data compiled by Kpler, is a drop of 25% from a year earlier. The country’s inventory levels are projected to be around 50% at the end of March.

Meanwhile, it doesn’t appear as though the sky-high LNG prices in Asia will drop anytime soon. QatarEnergy’s CEO and President and Qatari Energy Minister Saad Al-Kaabi expects it to be up to five years before the two damaged liquefaction trains at Ras Laffan Industrial Complex are fully repaired. It means that 12.8mn tonnes of LNG from the plant will be off the market for five years.

Pressure is also mounting to speed up projects that are currently under construction. Canada, in particular, has heard many appeals recently to speed up project development.

In March, Calgary-headquartered energy infrastructure firm TC Energy’s CEO Francois Poirier urged Canadian regulators to streamline processes for Canada to be more competitive in the global LNG market and speed up the permitting process.

Canada’s projects on its west coast boast the ideal geography to reach Asia with a fast and direct shipping path that is not susceptible to geopolitical tensions or require vessels to transit through expensive canals.

Amid the clamour for more LNG with Qatar and the UAE’s supply off the market, African suppliers have been looking to step up. However, African suppliers have been prioritising customer in Europe rather than Asia.

While buyers have been feeling the pinch of a tight LNG supply, exporters are reaping both short and long-term benefits. While all exporters have benefitted from the tight market, US giant Venture Global is particularly well place.

The Arlington, Virginia-headquartered firm’s 20mn tpy Plaquemines LNG facility began producing LNG in December 2024 and remains officially in the commissioning phase. Consequently, the company retains the ability to sell volumes into the spot market rather than being bound by long-term contractual commitments, giving it tremendous exposure to current price spikes.

Indeed, winners and losers emerge in every crisis. Disruption to Australia’s west coast LNG projects due to a cyclone have amplified the impacts of Qatar’s removal from the global LNG market, furthering improving the fate of exporters, while importers weigh contingency plans.