A unit of Australia’s Woodside has signed a heads of agreement with Commonwealth LNG to negotiate a deal for the supply of liquefied natural gas from the latter’s proposed 8.4 mtpa plant in Cameron, Louisiana.
Under the deal, Woodside Energy Trading Singapore would buy 2 Mtpa of LNG over a period of 20 years, scheduled to begin in the second quarter of 2026.
“Woodside’s offtake obligation can be reduced or even eliminated as Commonwealth
achieves increasing thresholds of offtake commitments from other buyers,” Woodside said on Wednesday.
Furthermore, Woodside would also have an option to buy an additional 0.5 Mtpa of LNG.
“This HOA with Commonwealth secures access to competitive LNG in the Atlantic Basin and provides Woodside with the ability to build market scale through acquiring low cost supply,” Woodside CEO Meg O’Neill, said.
The agreement is non-binding and also conditional upon the negotiation and execution of a fully termed LNG sale and purchase agreement but also other approvals, Woodside said.
This also includes a final investment decision on the proposed Commonwealth LNG development.
Commonwealth LNG said last year it had expected to take an FID in the first quarter of 2022.
In January 2021, the LNG terminal developer teamed up with trader Gunvor to launch an offtake tender for volumes from its proposed liquefaction plant in Cameron.
The trading firm also committed to take up to 3 Mtpa of LNG offtake from the project.
In addition, Commonwealth LNG signed a preliminary Bangladesh supply deal with Summit Oil and Shipping (Soscl) for 1 Mtpa over a period of 20 years.
