The Darwin LNG project in Australia's Northern Territory has been temporarily shut down by operator Santos. This stoppage is due to ongoing technical issues requiring remediation on the Barossa floating production, storage and offloading (FPSO) vessel, which supplies feed gas to the 3.7 million tonnes per annum liquefaction facility.

Global and Project Context

The shutdown occurs amidst a period of constrained global LNG supply, partly due to conflict in the Middle East affecting other producers. Australia, with a total nameplate capacity of around 88 million tpa, is a key supplier to North Asian nations. The Barossa project, which shipped its first cargo in late January within its original budget but behind schedule, is central to this supply chain.

Technical Issues and Shutdown Details

The technical problems are centered on the FPSO BW Opal, operated by BW Offshore. Recent work has involved replacing dry gas seals on several compressors. To complete this commissioning process and flush the system, Santos initiated a planned, temporary shutdown of the Darwin LNG plant, which has involved some flaring. The company had advertised this planned work and informed stakeholders, though an internal email suggested the restart could be "a number of weeks" away, with no official timeline provided.

FPSO Contract and Commissioning Status

BW Offshore holds a firm 15-year contract for the FPSO, plus options. The target for practical completion of the vessel has been slightly delayed to within the second quarter of 2026. Commissioning has been delayed by the need to reinforce seawater pipes and replace the compressor gas seals. While BW Offshore previously stated that technical adjustments are a normal part of the start-up phase and expected the FPSO to reach full capacity by the end of March, other reports indicate production may be intermittent until the contract term begins after practical completion.

Financial and Ownership Details

The contract for the BW Opal is expected to generate significant earnings for BW Offshore, with an EBITDA forecast of US$160-180 million in 2026 and US$265-275 million annually from 2027 onward. Santos operates the Barossa project with a 50% equity stake; partners are PRISM Energy (37.5%) and JERA (12.5%).