Disruptions in Australian LNG Production Due to Cyclone Narelle

Tropical Cyclone Narelle has caused significant disruptions to liquefied natural gas (LNG) production at two of Australia's largest facilities, Chevron's Gorgon and Wheatstone plants. The cyclone, classified as a Category 3 storm, made landfall on March 26, 2026, leading to production outages that are expected to exacerbate an already tight global LNG supply, particularly affecting Asian markets.

Special Broadcasting ServiceReutersChevron says LNG output to resume once safe after cyclone disruptions in Western AustraliaChannel News Asia - CNAThe Sydney Morning HeraldBloombergOil Price

The Gorgon facility, located on Barrow Island, has an annual production capacity of 15.6 million metric tons, while the Wheatstone facility produces 8.9 million metric tons. Together, these plants account for approximately 8% of the world's LNG supply. The outages at these facilities, along with disruptions at Woodside Energy's Karratha gas plant, are estimated to impact over 30 million metric tons of Australian LNG supply annually.

Reuters

The disruptions come at a critical time as global LNG flows have already been affected by geopolitical tensions in the Middle East, particularly due to Iranian airstrikes on Qatari facilities and the blockage of the Strait of Hormuz. Analysts, including Saul Kavonic from MST Marquee, have noted that these combined factors could lead to increased gas market tightness in Asia and Europe, especially if Australian production does not normalize quickly.

The Sydney Morning Herald

Chevron has stated that it is working to restore production at both the Gorgon and Wheatstone facilities, emphasizing that full production will resume only when it is safe to do so. A spokesperson for Chevron noted, “We will resume full production at both facilities once it is safe to do so.” Woodside Energy has also indicated that production at its North West Shelf project will restart once it can safely send workers back to offshore facilities.

Reuters

There are growing concerns regarding the implications of these outages on domestic energy prices in Australia. The Australian government is reportedly considering a windfall profit tax on energy companies due to soaring LNG prices, which have risen significantly since the onset of the conflict in the Middle East. Critics argue that energy producers should not benefit from high international prices at the expense of domestic consumers.

The Sydney Morning Herald

While Chevron has confirmed outages at both the Gorgon and Wheatstone facilities, the extent of the impact on global LNG prices remains uncertain. Some reports suggest that LNG prices in Asia have surged by over 90% since the beginning of the conflict in the Middle East, while others indicate that prices remain lower than in 2022.

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As the situation develops, Chevron and Woodside Energy are expected to provide updates on the restoration of production. The Australian government is also likely to continue discussions regarding potential regulatory measures to address the rising energy prices and ensure domestic supply stability.

The Sydney Morning Herald

• “This will exacerbate gas market tightness in Asia and Europe, especially if it takes more than a matter of days to normalise Australian production levels again,” — Saul Kavonic, Analyst, MST Marquee

Special Broadcasting Service

• “Energy producers should not benefit from high international prices at the expense of domestic customers,” — Australian Government Document on Windfall Profit Tax

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