Exxon Papua New Guinea LNG plant had to be shut down after power infrastructure on the southwestern Pacific island was damaged in a 7.5 magnitude earthquake early Monday morning.  Papua New Guinea Today photo by Jaycoz Pakura.

Exxon Papua New Guinea LNG processing units, other facilities closed

A 7.5 magnitude earthquake that killed at least 14 people on Papua New Guinea has also damaged power infrastructure on the southwestern Pacific island and forced the closure of ExxonMobil Corp’s LNG plant.

The US Geological Survey reported dozens of aftershocks in the region, including a 5.7 magnitude quake on Tuesday afternoon.

Papua New Guinea

Damage to the highway near Komo Airport in the Southern Highlands Province. Hubert Namani photo via Twitter.

Police in Mendi, the provincial capital of the Southern Highlands, report 14 people have been killed, but there are unconfirmed reports that there are up to 30 dead following the PNG earthquake.

“They were killed by landslides destroying families sleeping in their houses,” said Naring Bongi, a police officer in Mendi.

Julie Sakol, a nurse at Mendi General Hospital, told Reuters “People are afraid. The shaking is still continuing. There’s nowhere to go but people are just moving around.”

The PNG disaster management office says it is working to verify reports, but it could take days to confirm the death toll.

Exxon says communications with communities near its operations remain down.  The company says as a result, it is difficult to assess damage to its facilities that feed the PNG LNG plant.

“Communications continue to be one of the most significant challenges,” Reuters reports the company said in an emailed statement.

Exxon says it has closed the two LNG processing units at its site on the coast near the Papua New Guinea capital of Port Moresby.  The company earlier shut down its Hides gas conditioning plant and Hides production pads in Hela province, located northwest of Port Moresby.

Natural gas is processed at the Hides plant and shipped via pipeline to the PNG LNG plant where it is then exported.  Exxon’s main customers for its Papua New Guinea plant are in Japan, China and Taiwan.

Oil Search Ltd, Exxon’s partner, said a review of the facilities and infrastructure will take at least a week.  An industry source told Reuters that the Exxon plant will likely remain closed for at least a week.

Traders say the impact from the quake and resulting shutdown will depend on the duration of the closure.  LNG prices have fallen recently from over $10/mmBtu as winter recedes in North Asia.

“The global LNG market is likely to respond immediately as the buyers need to seek alternative sources,” Boseok Jin, a research analyst at HIS Markit told Reuters.