The LNG supply deal comes as Woodside and its smaller rival Santos hold preliminary merger talks. Credit: Rob Bayer/Shutterstock.

Australia’s Woodside has signed a liquified natural gas (LNG) supply deal with Pilbara Minerals‘ subsidiary, Pilgangoora Operations.

Supply under the LNG sale and purchase agreement is set to commence in the fourth quarter of 2024.

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It spans five years, with an average supply volume of 3.4 terajoules per day.

Woodside will supply the super-chilled gas on an ex-works basis from the truck loading centre at its Pluto LNG Facility on the Burrup Peninsula in Western Australia (WA).

Pilbara Minerals’ Pilgangoora lithium operation located 300km east of Karratha, WA, will use the LNG to replace diesel in power generation, aligning with energy transition goals.

This operation is said to be one of the largest hard rock lithium deposits globally. 

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Woodside CEO Meg O’Neill said: “The supply of LNG to the Pilgangoora operation assists Pilbara Minerals to reduce power emissions intensity from its operations by reducing diesel use as it continues to supply the raw materials that are vital in the production of lithium batteries, used in consumer electronics, electric vehicles, and for large-scale energy storage. 

“We are also pleased to be partnering with Pilbara Minerals, another important Western Australian resources company whose operations, like Woodside’s, provide direct jobs and contracting opportunities for local businesses in the northwest. This agreement further demonstrates Woodside’s commitment to Western Australia’s domestic gas supply from the Pluto project.”

Earlier this month, the Australian oil and gas company signed a deal to off-take 1.3 million tonnes per annum of LNG from Mexico Pacific.

Woodside will purchase the LNG from Mexico Pacific’s Saguaro Energia LNG project in Sonora, Mexico, for a period of 20 years. 

The LNG supply deals come as Woodside and its smaller rival Santos hold preliminary merger talks, which could lead to the creation of a major LNG supplier.