Home > Woodside inks billion dollar LNG deal

Woodside inks billion dollar LNG deal

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Woodside have signed what is thought to be a multi-billion dollar LNG deal which will see Japan’s Chubu Electric receive 1.5 million tonnes of the liquefied gas over three years.

LNG delivered under the agreement will be sourced from previously uncommitted volumes from Woodside’s $15bn Pluto facility.

While the company did not disclose how much the contract is worth, The Australian reports that with spot prices recently as high as $US18 per mmBtu, a figure of $1.2 billion could be likely.          

Woodside said the deal added to the company’s long-term relationships with major Japanese energy buyers.

"The agreement demonstrates the importance of Pluto LNG volumes in meeting growing regional demand for natural gas and also Woodside's increasingly diverse LNG purchasing, sales and shipping arrangements," Coleman said.

The announcement comes a week after Woodside confirmed its Japanese partner MIMI had terminated a deal to purchase around 1.5 million tonnes of LNG a year from the Browse LNG project.

Energy consultant group Wood Mackenzie said there was increased opportunities for Australian LNG producers as gas production was unable to keep up with demand in Asia.

"The implications are a tighter seasonal spot (LNG) market in Northeast Asia; increased opportunities for suppliers and further reforms needed to accelerate shale development," the group explained.

"Central Asian pipeline imports will be ramped up to capacity levels and significant volumes of spot LNG will be required.”

Wood Mackenzie’s head of Asia-Pacific gas and power analysis, Gavin Thompson, said this trend was set to continue as seasonal demand increased.

"The pace of unconventional gas development, particularly shale and coal-bed methane, will play a critical role, but we still do not foresee significant production of domestic shale before 2020,” he said.

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