The troubled $6 billion flagship will be out of action "for a number of weeks," just as Santos' customers are desperate for gas to replace supply from the Middle East.
The shutdown of the Yara Pilbara plant comes as a quarter of global trade in ammonia, used for urea fertiliser and mining explosives, is blocked by war.
Santos shuts down Barossa LNG amidst global gas crunch
The troubled $6 billion flagship will be out of action "for a number of weeks," just as Santos' customers are desperate for gas to replace supply from the Middle East.
Santos, which has seen its share price jump 19 per cent in a month due to a global oil and gas shortage, has quietly shut down its flagship Barossa LNG export project for several weeks.
Twenty per cent of global liquefied natural gas (LNG) capacity is isolated by the Strait of Hormuz, which Iran has blocked.
The shutdown of the Darwin LNG plant, which processes gas from the Barossa offshore gas field, will deprive its customers of desperately needed supplies and prevent Santos from benefiting from sky-high prices for any uncontracted production capacity.
A "planned shutdown"
On March 19, Santos emailed stakeholders in the Darwin area about a "planned shutdown" of its 3.7 million tonnes-per-year Darwin LNG plant.
"Flaring will occur at the facility and may continue for a number of weeks until the plant is restarted and operational," the email seen by Boiling Cold said.
Only four weeks ago, BW Offshore, the owner of the Barossa offshore production vessel, seemed unaware of any planned shutdown.
The Norwegian company told investors it expected the Opal to reach full capacity by the end of March. The vessel may now produce nothing on March 31.
The Barossa gas field is 300km north of Darwin. Image: Santos
In the 27 February presentation, BW Offshore said commissioning of the 358m-long vessel had been delayed by the need to reinforce pipes carrying seawater and to replace gas seals on compressors.
BW Offshore had expected to achieve Practical Completion on its contract with Santos by mid-March - a contractual milestone that typically would require the Opal to be safe and functional with nothing but minor issues to be addressed.
Santos went ahead with the $US3.95 billion ($5.7 billion) Barossa project in 2021. That cost excludes the construction of the BW Opal owned by BW Offshore.
Barossa has required substantial drilling, construction of almost 400km of subsea pipeline, and the refurbishment of the 20-year-old Darwin LNG plant, which had been used to process gas from the now-shuttered Bayu Undan field.
Santos missed its end-of-year deadline to ship gas from Barossa, and the first carrier left the Darwin LNG plant on 25 January.
Darwin Port data, going back to February 20, shows that the only LNG carrier to dock at the Darwin LNG berth in that period has been the Kool Husky on February 27.
The Darwin Port shipping schedule had shown that another LNG carrier, the Bishu Maru, was to arrive on March 16, but the berthing was later cancelled. The vessel is now going back and forth north of Darwin, according to the vessel tracking site Marine Traffic.
Santos did not respond to the questions sent by Boiling Cold on Friday.
The Barossa LNG project is operated and 50 per cent owned by Santos. Japan's JERA holds a 12.5 per cent stake, and the Korean firm PRISM Energy International Australia owns 37.5 per cent.
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday, The Guardian and Boiling Cold, winning five WA Media Awards.
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