Woodside Energy is currently in discussions with potential partners for its Driftwood liquified natural gas (LNG) project, aiming to secure a stable gas supply and enhance revenues for US gas producers, reported Reuters, citing CEO Meg O’Neill.
O’Neill highlighted the company’s strategy during an investor conference in New York.
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The Australian energy company is engaged in talks with US onshore gas producers, pipeline operators, and other companies that align with its perspective on LNG.
She expressed the frustration of US gas producers with the lower Henry Hub prices, especially when their gas is converted to LNG and sold at higher prices globally.
By partnering with these producers, Woodside aims to increase their revenue and gain access to a steady gas supply.
The company is seeking clarity on its partnering approach before making a final investment decision, although it is unlikely to have all agreements signed by the first quarter of 2025.
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By GlobalDataIn July this year, Woodside agreed to acquire Tellurian, including its Driftwood LNG export project on the US Gulf Coast, for $1.2bn, including debt.
This agreement could bolster the US’ position as the leading producer of super-chilled gas by ensuring the completion of Tellurian’s 27.6 million tonnes per annum facility in Lake Charles, Louisiana.
The sale is expected to close by the end of the year, after which Woodside will be able to instruct the plant’s contractor Bechtel to proceed.
Interest in the Driftwood project has come from infrastructure developers and reputable counterparties from Asia and other regions.
A significant advantage for the Driftwood project is that it was not affected by the US administration’s pause on LNG export application approvals, giving Woodside a year’s lead over competing projects, the CEO said.
Despite potential increases in global LNG supplies towards the end of the decade, O’Neill believes that demand and prices will remain robust.
She anticipates that higher production will be balanced by growing demand, making a projected surplus unlikely.
Furthermore, Woodside’s CCO, Mark Abbotsford, remains optimistic about the long-term demand for LNG in China, especially with the country’s transition from coal to gas, despite current economic challenges.
