KEY POINTS
- Woodside Energy seeks partners for its Driftwood LNG project.
- Partnerships with U.S. gas producers and pipeline firms will increase revenue and secure supply.
- Woodside aims to finalize the structure of partnerships by early 2025.
Australia’s Woodside Energy is actively pursuing partnerships with U.S. gas producers and pipeline companies to secure resources for its Driftwood LNG project. This collaboration is expected to increase revenue for U.S. producers and secure a stable gas supply for Woodside, according to CEO Meg O’Neill, who spoke at an investor conference in New York.
Strengthening Driftwood LNG
O’Neill highlighted that discussions with potential partners are ongoing, with Woodside aiming for clarity on the structure of these partnerships before making a final investment decision. However, all agreements may not be finalized before the first quarter of 2025.
Woodside’s acquisition of U.S. LNG developer Tellurian, including its Driftwood LNG export project, was announced in July for $1.2 billion, which includes debt. However, the acquisition is expected to be completed by the end of the year, enabling Woodside to notify contractor Bechtel to proceed with the project.
The Driftwood LNG facility, located on the U.S. Gulf Coast, has a capacity of 27.6 million metric tons per year and positions the U.S. as a leading global LNG producer.
Moreover, O’Neill emphasized that the project has attracted interest from infrastructure developers and key players in Asia, offering strong counterparty support.
Navigating U.S. Policies and Global Demand
One of the key advantages for Driftwood LNG is its exemption from the Biden administration’s pause on new LNG export approvals, giving Woodside a year-long advantage over other projects.
However, O’Neill dismissed concerns about a potential oversupply of LNG toward the end of the decade, explaining that increased global supply would be met by rising demand. furthermore, she stressed that any projected LNG surplus is unlikely.
Woodside’s Chief Commercial Officer, Mark Abbotsford, shared similar optimism, stating that the company’s outlook on China’s economic challenges remains short-term.
According to Reuters, he believes long-term demand for LNG will remain strong, particularly as the country continues its transition from coal to cleaner energy sources like natural gas.
Moving Forward
Woodside’s expansion plans include partnering with U.S. gas producers and infrastructure developers to solidify its position in the global LNG market.
The company expects that growing demand for cleaner energy will drive LNG prices and maintain its strong market position, despite potential increases in supply.
However, the company remains focused on finalizing its Driftwood LNG project, navigating geopolitical challenges, and leveraging long-term global demand to achieve its goals.
