May 8, 2023

Equinor’s Snohvit LNG plant to stay offline until May 19 due to compressor failure

The Equinor-operated 4.2 mtpa Snohvit LNG plant on Norway’s Melkoya Island near Hammerfest has shut for unplanned maintenance and is expected to return to operations on May 19.

Equinor said the cause of the shutdown since May 4 is compressor failure, according to the Remit page of Gassco's website. Gassco, Norway's gas system operator, publishes information about planned and unplanned gas production or transportation unavailability on its Remit page.

The 16-day unplanned maintenance is likely to result in a loss of 172,603 t of LNG, or almost three 60,000 t cargoes, based on Snohvit's production at nameplate capacity.

Two LNG ships, the 140,000 m3 Arctic Voyager and the 147,200 m3 Arctic Lady, have signalled their arrival at Snohvit on May 11 and 14 for cargo loading, respectively. Market participants said the ships' scheduled arrival dates suggest they will be idle until operations at Snohvit restart.

Snohvit shipped one cargo this month on May 1 on the 140,000 m3 Arctic Discoverer to the Netherlands’ 11.8 mtpa Gate LNG terminal on May 5. It shipped six cargoes, or 0.39 mt of LNG, in April, down slightly from its recent peak of seven cargoes, or 0.46 mt of LNG, in March, the data show.

The unexpected halt to production at the plant comes amid a softening in spot LNG prices as high stock levels in Europe and Asia have suppressed spot LNG demand.

The front-month Dutch TTF gas futures prices settled at $11.834/mmBtu on May 5, up slightly from its previous settlement of $11.536/mmBtu sharply below its peak of $99.389/mmBtu on Aug. 25 last year. The front-month futures contract was last in the $11s/mmBtu in mid-July 2021.

Snohvit was still offline a year ago, having been forced to halt operations in September 2020 due to a fire. It restarted exports on June 6 last year. The terminal has shipped all but four cargoes to Europe since last June, with higher LNG netback prices for deliveries to Europe over Asia incentivising the cargoes to stay within the region.

It shipped three of those four cargoes to Asia and Latin America last year, with one cargo each delivered to Argentina’s 3.7 mtpa Bahia Blanca in July, Jamaica’s 3.6 mtpa Port Esquivel in September and PipeChina’s 4.2 mtpa Yuedong LNG terminal in October. This year, its sole shipment outside of Europe was to PipeChina’s 4 mtpa Diefu LNG receiving terminal in April.

Plants such as Oman LNG’s 10.9 mtpa Qalhat and Qatar’s 77 mtpa Ras Laffan LNG export facility face lower production. But this is due to planned maintenance. Oman LNG took the third of its three liquefaction trains offline on May 3. The firm did not disclose when the train would restart production.

Qatar’s Train 1 has been offline since Apr. 30 for a two-week-long scheduled maintenance, and a restart is expected around May 13, market participants said.

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