Woodside Energy in talks with potential partners for Driftwood LNG, CEO says
Recasts with interest in partnering on Driftwood project; updates throughout with outlook on LNG market, background
By Curtis Williams
Sept 16 (Reuters) - Woodside Energy WDS.AX is in discussions with onshore U.S. gas producers, pipeline companies and companies that share its outlook and view of liquefied natural gas to partner with its Driftwood LNG project, company CEO Meg O'Neill said on Monday.
Speaking at an investor conference in New York, O'Neill said there was a lot of frustration by U.S. gas producers earning lower Henry Hub prices for gas that is then turned into LNG and sold at higher global prices. Partnering with gas producers would increase their revenue and allow Woodside access to a gas supply, O'Neill said.
Woodside wants to have clarity on the partnering approach before it takes a final investment decision, although it is unlikely to have signed all the agreements by the first quarter of 2025, she said.
Woodside agreed in July to buy U.S. liquefied natural gas developer Tellurian TELL.A, including its U.S. Gulf Coast Driftwood LNG export project, for $1.2 billion including debt.
The agreement could strengthen the position of the U.S. as the world's largest producer of the superchilled gas by securing the completion of Tellurian's 27.6 million metric ton per annum facility in Lake Charles, Louisiana.
The sale is expected to be completed by the end of the year after which Woodside said it will be able to give contractor Bechtel a notice to proceed.
Woodside said the interest in Driftwood included infrastructure developers and strong counterparties in Asia and other places.
One of the most attractive features is that the Driftwood project was not impacted by the Biden administration's decision to pause the approval of applications to export LNG and it gives Woodside a year's advantage over other projects, O'Neill said.
Increased global LNG supplies toward the end of the decade are unlikely to impact LNG demand or prices, she said, adding that higher global production will be offset by growing demand and a projected glut is unlikely to happen.
The present economic challenge in China is short term and Woodside thinks the long-term trajectory would see strength in demand for LNG especially due to the switch from coal to gas, said Woodside's chief commercial officer, Mark Abbotsford.
Reporting by Curtis Williams in Houston; Editing by Leslie Adler
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
