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Shell’s Prelude floating LNG plant out of action for several months?

Australian LNG exports defy supply glut

Angela Macdonald-Smith
Angela Macdonald-Smith Senior Resources writer

Australia’s exports of liquefied natural gas are holding at near-record levels, defying a global supply glut that has swamped the market, causing prices to crash and driving the cancellation of cargoes from the US.

LNG production from the country’s plants on the north-west and eastern coasts rose in the March quarter by 11 per cent from the year-earlier quarter to 19.9 million tonnes, and was only marginally below the record levels of the second half of 2019, according to the latest analysis from consultancy EnergyQuest, released on Friday.

The high level of exports came despite the ongoing shutdown of Shell’s Prelude floating LNG plant off the far north coast of Western Australia, which has been out of action since early February due to a power fault and is expected to take several months to resume production.

Australia’s five largest oil and gas companies slashed about $6.2 billion in short-term spending between them after the collapse in crude prices, putting a range of projects in limbo, including Woodside Petroleum’s Scarborough, Pluto-2 and Browse ventures, Santos’ Barossa project, and the Crux LNG project involving Shell, Osaka Gas and Seven Group Holdings.

Shell’s decision in April to proceed with the first part of its $10 billion Arrow onshore gas project on the east coast with partner PetroChina bucked the trend.

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