A severe tropical cyclone has forced the shutdown of major liquefied natural gas (LNG) facilities along Western Australia’s coast, creating additional strain on global energy markets already grappling with supply disruptions from Middle East conflicts. The simultaneous outages at Chevron’s Gorgon and Wheatstone plants, along with Woodside Energy’s North West Shelf operations, have removed significant LNG capacity from world markets at a critical time.
Cyclone Narelle, packing winds reaching 200 kilometers per hour, prompted safety shutdowns across Australia’s northwest gas processing region on Friday. Chevron confirmed both its Gorgon (15 million metric tonne annual capacity) and Wheatstone (9 million metric tonne capacity) facilities experienced production interruptions, collectively representing over 5% of global LNG supply. Woodside Energy similarly reported offline status at its Karratha gas plant, which serves one of the world’s largest offshore gas operations.
The timing exacerbates existing market tensions caused by the Iran-Israel conflict, which has disrupted shipments through the critical Strait of Hormuz shipping channel. Energy analyst Josh Runciman of the Institute for Energy Economics and Financial Analysis noted the cyclone arrived at the ‘worst possible time,’ warning that even minor production setbacks could trigger significant price fluctuations in global markets.
Asian markets face particular vulnerability, as Australia supplies approximately 40% of Japan’s LNG requirements according to the Asia Natural Gas and Energy Association. LNG spot prices in some Asian regions have already doubled since February 28th when U.S.-Israel military actions against Iran commenced.
International Energy Agency Executive Director Fatih Birol, visiting Canberra this week, emphasized Australia’s increasingly vital role in global energy security while cautioning that ‘Australia alone will not be able to offset the entire lack of LNG coming from the Middle East.’
With companies monitoring Cyclone Narelle’s progression, Chevron and Woodside have committed to restoring production once weather conditions permit safe operations. The supply interruption comes as Australia considers implementing a windfall tax on LNG exporters benefiting from elevated prices driven by geopolitical tensions.