Woodside signs 20-year Louisiana LNG supply deal with QatarEnergy
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Woodside Energy has signed a 20-year agreement to supply QatarEnergy with up to 3 million metric tons per year of LNG from its Louisiana LNG project, a deal QatarEnergy says will make it the largest buyer of US LNG.
The sale and purchase agreement was announced on Oct. 29. Supply will be on a free-on-board basis, meaning QatarEnergy takes the cargoes at the Louisiana terminal and handles the shipping itself. Deliveries start when the project’s second liquefaction train begins operating and rise to the full 3 million metric tons per year once the third train starts up.
QatarEnergy expects its first deliveries in 2030.
Louisiana LNG is under construction near Lake Charles, Louisiana. It is designed with 3 trains and a combined capacity of 16.5 million metric tons per year, and Woodside is targeting first LNG in 2029. The QatarEnergy volumes will come from Woodside’s share of the project’s output.
The deal puts one of the world’s largest LNG exporters on the buying side of the US export boom, and gives Woodside a long-term customer for a project still years from completion.
QatarEnergy is building a large position in US LNG
QatarEnergy is one of the largest LNG producers in the world, so a 20-year purchase from a US project stands out.
Saad Sherida Al Kaabi, Qatar’s Minister of State for Energy Affairs and president and CEO of QatarEnergy, said the additional volumes make the company “the largest buyer of LNG from the US.” Qatar Tribune reported that he linked the deal to the company’s Golden Pass LNG project in Texas and its growing portfolio of US LNG purchases.
Al Kaabi described the agreement as a way to strengthen QatarEnergy’s global supply and trading portfolio.
That points to the strategy behind the deal. US LNG gives QatarEnergy supply from outside the Gulf, loaded at terminals on the US Gulf Coast. Free-on-board terms let it decide where those cargoes go, which adds flexibility for a company that trades LNG to customers in Asia, Europe, and elsewhere.
Supply from outside the region has taken on extra weight this year. The conflict involving Iran has sharply reduced traffic through the Strait of Hormuz, the route for Qatar’s own LNG exports. QatarEnergy has not linked this agreement to the conflict, and its deliveries from Louisiana are not due to begin until 2030, but the deal adds supply that does not depend on that route.
Louisiana LNG gains a long-term anchor customer
For Woodside, the agreement adds a major buyer to a project it is still building.
Liz Westcott, Woodside’s CEO and managing director, said the deal reflected “disciplined execution of Woodside’s strategy” and called it “a strong vote of confidence in Louisiana LNG.”
Long-term contracts underpin the economics of LNG export projects. They give developers predictable revenue for the decades a terminal is expected to run, and they help justify the cost of building liquefaction trains before the first cargo is shipped.
QatarEnergy joins Uniper, which has a previously announced supply agreement linked to the project, as a long-term buyer of Woodside’s volumes.
The timing of the QatarEnergy volumes is tied to construction milestones rather than a fixed date. Supply starts with train 2 and reaches its full level with train 3, so the pace at which Woodside brings those trains online will decide when QatarEnergy receives its full annual volume.
US LNG is attracting buyers from across the energy industry
The agreement adds to a pattern of long-term buyers committing to US export capacity.
A 20-year commitment from one of the largest LNG producers in the world shows that demand for US supply extends to companies that already export LNG themselves.
For US LNG developers, that broadens the pool of potential customers. For buyers, it reflects a view that US supply can play a long-term role in a diversified portfolio alongside volumes from other regions.
The QatarEnergy deal also highlights the role of free-on-board contracts in US LNG. Buyers that take cargoes at the terminal can redirect them as prices and demand change, which makes US supply attractive to companies with their own trading operations.
Several questions remain open. Woodside has to deliver its 3 trains on schedule, with first LNG targeted for 2029, and QatarEnergy’s full volumes depend on train 3 coming online. The agreement also leaves open how QatarEnergy will deploy US cargoes alongside its own production once Louisiana LNG is running, and whether more producers follow it into long-term US supply deals.
Source
Woodside Energy
