Woodside Energy Trading Singapore has signed a binding LNG supply agreement with Cheniere Energy’s subsidiary Corpus Christi Liquefaction LLC for the purchase of 850,000 tonnes/year of LNG from the Corpus Christi LNG project when the second train at the export facility comes on stream. The facility will eventually have three trains with a combined capacity of 13.5 million tpy.
LNG will be bought on a FOB basis. Woodside will pay 115% of the monthly Henry Hub price plus $3.50/MMbtu.
The Woodside agreement is for 20 years, but includes an extension of up to an additional 10 years along with a mechanism that gives Woodside an option to forgo deliveries with sufficient notice through the payment of $3.50/MMbtu for cancelled amounts.
Cargos are scheduled to begin from Train 2 in 2019.
The deal will give Woodside’s trading arm access to the US shale industry that is predicted to enter the global market by 2020.
Woodside’s trading arm already sells uncommitted LNG from the company’s Pluto facility on the Burrup Peninsula in Western Australia.
Woodside Chief Executive Officer Peter Coleman said the Corpus Christi agreement diversifies Woodside’s LNG offering and demonstrates how the company is extending and enhancing its marketing and trading capabilities as well as adding value to the portfolio.
Coleman added that Woodside sees US LNG to be attractive to LNG purchasers and complement the company’s existing LNG portfolio as well as enable it to exploit new opportunities.