Woodside Energy CEO: We are in discussions with potential partners about Driftwood LNG

Woodside Energy CEO Meg O'Neill announced on Monday that the company is in talks with U.S. onshore gas producers, pipelines and companies who share its views and outlook on liquefied gas for its Driftwood LNG Project.

O'Neill, speaking at an investor's conference in New York said that U.S. producers of gas were frustrated by the lower Henry Hub price for gas which is then converted into LNG and sold to higher global prices. O'Neill stated that Woodside would be able to access a gas supply by partnering with gas producers. This would allow them to increase their revenue.

She said that Woodside wanted to be sure of the partnership approach before making a final decision on investment. However, it was unlikely that all agreements would have been signed by the first quarter 2025.

Woodside has agreed to purchase U.S.

liquefied natural gas developer Tellurian

The project includes the U.S. Gulf Coast Driftwood LNG Export Project, valued at $1.2 billion, including debt.

By completing Tellurian's 27,6 million metric tons per year facility in Lake Charles (Louisiana), the agreement could help the U.S. become the largest super-cooled gas producer on the planet.

Woodside expects the sale to be complete by the end the year, after which it can give contractor Bechtel an order to proceed.

Woodside stated that Driftwood was of interest to infrastructure developers, as well as strong counterparties from Asia.

O'Neill noted that one of the most attractive aspects of the Driftwood Project is that it was not affected by the Biden Administration's decision to pause approval of LNG export applications. This gives Woodside an advantage of a year over other projects.

She said that increased global LNG supply at the end of this decade will not impact LNG prices or demand. The higher production in the world is offset by the growing demand, and the projected glut won't happen.

Mark Abbotsford, Woodside's chief business officer, stated that the current economic challenges in China are short-term and Woodside believes the long-term trend will see a strong demand for LNG, especially due to a switch from coal to natural gas.

(source: Reuters)