The outbreak of coronavirus has caused uncertainties for Australian LNG projects as cargoes may be facing potential delays, according to EnergyQuest.
This isn’t limited to shipments that are due to arrive in February, EnergyQuest reported, but could apply until the outbreak is deemed to have eased.
The Chinese Government has requested that PetroChina, which has contracts in place with Shell for Gorgon offtake, to declare force majeure on February 3. PetroChina was consequently unable to secure workers at the receiving terminals.
“The east coast projects are most exposed to China,” EnergyQuest stated.
“Most other projects also have a significant exposure: Pluto 42 per cent, Gorgon 38 per cent, Ichthys 27 per cent, North West Shelf 26 per cent, Darwin 24 per cent, GLNG 24 per cent. Wheatstone only had 9 per cent and Prelude none.”
EnergyQuest received reports that Chinese buyers were potentially delaying their term offtake.
China is a key buyer of Australian LNG, representing 36 per cent of the country’s exports in January.
The coronavirus outbreak has also impacted oil and spot LNG prices, with Brent starting the month at $US67.05 ($96.03) per barrel on January 2 before rising to $US70.25 per barrel on January 6.
Prices fell steadily through the month to $US54 per barrel on February 3, which was reflective the expected fall in Chinese oil demand, according to EnergyQuest.