CEO CERAWEEK Woodside says that the Louisiana LNG investment decision may be delayed until Q2.
Meg O'Neill, the CEO of Woodside LNG Australia, said on Monday that the company may delay a final decision on the Louisiana plant's liquefied gas project until the second quarter 2025 if talks to sell the half of the project continue.
Woodside is looking to sell up to 50% of the project. The company has been reported to be in discussions with several buyers, including Tokyo Gas and Japan's JERA.
O'Neill stated in an interview conducted on the sidelines an energy conference held in Houston, "We want confidence in our partners and a sell-down that is adequate."
The goal is to have it ready by the end of the first quarter.
O'Neill refused to identify the parties in talks with Woodside.
Woodside previously stated that it would make a decision on the investment by the end the first quarter for the construction of the first phase of a 27.6 million ton/year facility in Lake Charles, Louisiana. Estimates place the cost of construction at $16 billion.
O'Neill stated that there is a strong interest in the Bechtel project, as it has been fully permitted and is under an Engineering, Procurement and Construction(EPC)contract.
O'Neill said that in phase 1, Woodside would retain 8 million tonnes a year for its trading portfolio, as it seeks to get away from only selling directly to customers.
O'Neill said, "Trading has become a more important part of our company, but we also see that as the portfolio grows, there are greater opportunities to create value in this part of the business."
Woodside LNG has offered LNG customers shorter contracts with higher rates than the standard 20-year offtake agreement. O'Neill stated that this presents opportunities for her business.
Woodside is fine with this. "Some customers might prefer a shorter period, which is perfectly acceptable." She said that in a way, this gives us the opportunity to gain new customers, as we move forward.
We offer greater flexibility. "I think it's something we do better."
She said that Woodside would continue to purchase LNG cargoes through Commonwealth LNG and Mexico Pacific LNG. Both companies are building LNG projects in Louisiana, Mexico and to export U.S. Natural Gas. Woodside, which is aware that both projects are slowing down, is focusing on its own project.
She said that Woodside doesn't plan to invest in gas production for the Louisiana LNG project because it can purchase from multiple gas producers from different regions and buy gas from them.
O'Neill said that Woodside is working on engineering issues in order to make a final decision about the pipeline which will transport gas to Louisiana LNG.
TRINIDAD CHALLENGES
Woodside's CEO said that it was "very clear" the financial terms were quite difficult to develop a resource as large and complex as its deep-water Calypso find in Trinidad and Tobago.
Trinidad has been pressuring Woodside and others to find gas to fill the gap for its Atlantic LNG flagship facility and the petrochemicals industry.
O'Neill said that the Trinidad government was very receptive in having a discussion about finding a way forward. (Reporting and editing by Simon Webb, Neil Fullick, and Curtis Williams from Houston)
(source: Reuters)
