Australia's Santos temporarily closes Darwin LNG Plant amid Mideast Supply Squeeze

Santos, an Australian company, announced on Tuesday that it had temporarily closed its Darwin liquefied?gas plant. This would disrupt exports of a newly restarted?supply chain during a period when the markets were tightening because of disruptions in the Middle East.

This outage occurs as LNG exports from Qatar to Europe and Asia have already been under pressure due to disruptions in shipments.

Australia is a major LNG supplier to Asian buyers.

Santos is the second largest oil and gas producer in the country. Santos, the country's No. 2 oil and natural gas producer, stated that the shutdown was due to "equipment replacement" work at the BW Opal flotation production vessel, located offshore Barossa Gas and Condensate Project, which feeds Darwin Plant.

The spokesperson for the company said that the shutdown was planned, and it related to the commissioning of the plant. However, he did not specify the length of time the plant will be offline.

According to the Australian Financial Review, Santos sent an email to its stakeholders indicating that it would take "a few weeks" for Darwin LNG?to resume operation.

The?spokesperson stated that "we are in the final phases of commissioning Barossa LNG before we come back on and get back to full rates."

Darwin LNG resumed exports in early this year, after Barossa had delayed its start-up due to technical issues, such as compressor seal problems, that affected production stability.

Santos'?quarterly report on production stated that it expects total production to range between 101 and 111 millions barrels of oil equivalent (mmboe) by 2026. Barossa is expected to contribute approximately 19 mmboe.

Santos?operates Barossa, with a stake of 50%, along with South Korea's SK E&S which holds 37.5% and Japan's JERA, with 12.5%. (Reporting and editing by Mrigank Dahniwala, Eileen Soreng, and Nikita Maria Jio in Bengaluru)

(source: Reuters)