Australia’s Woodside Energy has signed a preliminary deal on supply LNG to Uniper Global Commodities.
The heads of agreement (HoA) would involve the provision of 500,000 tonnes per year of LNG, starting in 2021. It would increase to 1 million tpy from 2025. The deal would run for 13 years. The HoA was signed at the Gastech conference, in Houston.
Woodside’s CEO Peter Coleman said the agreement strengthened the company’s existing relationship with Uniper. “It is also another strong signal of market support for our plans to expand the Pluto LNG facility in Western Australia.” Coleman noted plans for a second train at Pluto LNG, which would be supplied with gas from the Scarborough offshore field.
“Uniper is committed to growing its LNG trading business in both the Atlantic and Pacific basins. This HoA with Woodside, one of Asia-Pacific’s leading LNG producers, is a further demonstration of the expansion of our portfolio in the region,” said Uniper CEO Keith Martin.
The second tranche of the supply, the increase from 2025, would be conditional on a final investment decision (FID) on the development of Scarborough. The HoA is also conditional on reaching a complete sale and purchase agreement.
The two companies signed an HoA on mid-term supplies in September 2018. This was to cover 600,000 tpy of LNG for four years, starting in 2019. Woodside was to provide the LNG from its portfolio.
Coleman, in comments at Gastech, warned attendees against a false sense of security about the future of gas. Those in the industry have a responsibility to demonstrate they are “reducing methane emissions and reducing flaring to an absolute minimum. It’s the right thing to do – for the world and for our shareholders.”
Woodside is making efforts to increase its efficiency and bring in renewables to its projects in northern Australia, in addition to hydrogen developments.
In addition to Asian trading, Uniper has also pursued LNG opportunities in Europe. It sold out of its floating storage and regasification unit (FSRU) off Italy this year but is working on a project, with Mitsui OSK Lines (MOL), on Germany’s first LNG import terminal. The Wilhelmshaven terminal is due to start up in the second half of 2022. It is also working on a proposal in the United Arab Emirates for LNG imports.