Australia's liquefied natural gas (LNG) exports may be poised for recovery after two years of decline. The Santos-operated Darwin LNG facility has resumed operations following an extended shutdown, with its first shipment recently delivered to Sakai Port in Japan.
The facility had been idled since 2022 when its primary gas source, the Bayu-Undan field, became depleted in late 2023. Its revival comes after the newly developed Barossa gas field began production in September of the same year, providing a fresh supply source for the Darwin plant.
The commencement of Barossa field operations marks a critical development for Australia's LNG industry. The earlier closure of Bayu-Undan had contributed to Australia's declining LNG export volumes, directly impacting its position in global markets. In 2022, Australia lost its status as the world's top LNG exporter to the United States, with projections suggesting Qatar may surpass it by 2025.
In efforts to maintain its position as a major LNG exporter, the Australian government recently approved Woodside Energy Group's proposal to extend operations at the North West Shelf project until 2070. This decision aims to secure stable supply for decades while bolstering market confidence.
The restart of Darwin LNG operations represents a significant boost for Australia's LNG export capacity. Industry analysts suggest this development could help stabilize the country's export volumes in the coming years, though challenges remain in maintaining competitiveness against growing global supply.