LNG

Baker Hughes, the US liquefied natural gas equipment-maker and energy services company, reported a surge in net profits and revenues amid growth in orders including for gas field services in Algeria and LNG in Australia.

Woodside Energy, the liquefied natural gas plants operator in Western Australia, reported a second-quarter increase in LNG sales revenues from the Pluto, Northwest Shelf and Wheatstone operations even at lower prices.

Woodside Energy, the Australian liquefied natural gas plant operator, has agreed to buy Tellurian’s US Driftwood LNG export project on the Louisiana Gulf Coast in a deal valued at US$1.2 billion and giving the Perth-based company a major foothold in the US market.

Woodside, which is the operator and a shareholder in the North West Shelf facility and holds most of Pluto LNG in Western Australia, has now secured a fully permitted venture with a potential 27.6 million tonnes per annum of output and “significant cash generation potential” to underpin long-term shareholder returns.

The transaction comprises an all-cash payment of about US$900 million, or $1.00 per share of outstanding Tellurian common stock.

“The implied enterprise value is approximately $1.2Bln and represents an attractive entry into an opportunity with more than $1 billion of expenditure incurred to date,” said Woodside’s statement to the Australian Securities Exchange.

Woodside boost

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” said Woodside Chief Executive Meg O’Neill.

“It adds a scalable US LNG development opportunity to our existing approximately 10 MTPA of equity LNG in Australia,” explained O’Neill.

“Having a complementary US position would allow us to better serve customers globally and capture further marketing optimisation opportunities across both the Atlantic and Pacific Basins,” the CEO stated.

“Woodside expects to leverage its global LNG expertise to unlock this fully permitted development and expand our relationship with Bechtel which is the EPC contractor for both Driftwood LNG and our Pluto Train 2 (expansion) project in Australia,” O’Neill noted.

Tellurian stated that the deal with Woodside provided “substantial and certain value for our shareholders” after a strategic repositioning in December 2023.

“Woodside’s offer reflects this progress, providing a significant premium to our share price,” said Martin Houston, Executive Chairman of Tellurian.

Martin Houston had established the Tellurian company with Charif Souki, who had previously founded and departed Cheniere Energy.

“After careful consideration of Tellurian’s opportunities and challenges, the board and senior management weighed an immediate and significant cash return against the risks and costs associated with the timeline to FID and determined that this offer is in our shareholders’ best interests,” Houston stated.

Ideal match

Houston said that Woodside was a “highly credible operator” with better access to financial resources and a greater ability to manage offtake risk. 

The Driftwood LNG plant is under construction in Lake Charles and according to current plans will have five LNG liquefaction Trains built through four phases.

Construction has commenced, with pilings for Trains 1 and 2 complete, foundation work in progress and pilings underway for the LNG storage tanks.

“The progress on ground work reduces the risk to EPC timeline and cost,” said Woodside.

Woodside added that it was targeting FID readiness for Phase 1 of the Driftwood development from the first quarter of 2025.

Tellurian said that the acquisition price being paid by Woodside represented a 75 percent premium to Tellurian’s closing price on July 19, 2024, and a 48 percent premium to Tellurian’s 30-day volume weighted average price.

Lazard, the international investment bank with main offices in Paris, New York and London, was given the task in 2023 of finding a buyer for Tellurian.

Lazard is continuing to serve as financial advisor to Tellurian and Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel to Tellurian.

Woodside Energy, the key supplier of LNG to North Asia from two operated plants in Western Australia, has shrugged off the rejection at its annual meeting in Perth of a non-binding vote on its climate change policies as several politically-motivated pension funds and advocacy groups voted against it as not going far enough.

April 17 (LNGJ) - Woodside Energy, the Australian LNG plant operator, said energy engineering company Wood Plc of the UK, the winner of a tender, would conduct a study on the proposed Greater Sunrise LNG project involving Australia and the nation of Timor-Este. The Timorese would have a more than 56 percent share in the Sunrise LNG venture if it goes ahead while Woodside would hold 33.4 percent and Japanese utility Osaka Gas would have a 10 percent stake.

   “The study will consider the key issues for developing, processing, and marketing gas with a strong focus on delivery of gas to Timor-Leste for processing and LNG sales or the alternative of delivery of the gas to Australia,” Woodside said. The study is scheduled to be completed by no later than the fourth quarter of 2024. The Greater Sunrise gas fields are located 450 kilometres (280 miles) northwest of Darwin and 150km south of Timor-Leste.

Woodside Energy, the leading supplier of Australian LNG cargoes to North Asia, has signed a sale and purchase agreement with the South Korean state-owned utility Korea Gas Corp. as more Asian nations seek to secure long-term supplies for energy security.

The SPA provides for the supply of around 500,000 tonnes per annum of LNG for a period of 10.5 years on a delivered basis whereby Woodside supplies the shipping.

The supply deals with the Koreans begin in 2026 and will come from Woodside’s portfolio.

“LNG delivered to Kogas under the SPA will be sourced from uncommitted volumes across Woodside’s global portfolio, including the Scarborough Energy Project which is targeting first LNG cargo in 2026,” explained Woodside.

Kogas already receives Australian LNG cargoes from other regional projects such as Gladstone LNG in Queensland.

Queensland LNG

The GLNG plant is operated by Adelaide-based Santos and Kogas is a shareholder along with French major TotalEnergies and Malaysia’s Petronas.

The state-owned Korean utility has been a long-term regional importer from nations like Indonesia and Malaysia as well as Qatar and Oman in the Middle East.

Woodside Chief Executive Meg O’Neill said that the SPA was significant as Woodside’s first long-term supply agreement into Korea, the world’s third-largest LNG market.

She said the agreement reinforced the ongoing contribution of Woodside’s LNG towards the energy security needs of major customers in the region.

“Woodside is pleased to be a long-term supplier of LNG to Kogas, a leading global energy company and one of the world’s largest LNG importers,” said O’Neill.

“This agreement is further demonstration of ongoing robust demand for Woodside’s products from major energy customers in our region,” O’Neill stated.

LNG for power

Kogas President and CEO Choi Yeon-Hye said she was pleased to conclude the SPA with Woodside.

“This SPA has enabled Kogas to enlarge the customer base in the domestic power market, reinforcing our role as a leading natural gas supplier in Korea,” she stated.

“By leveraging this SPA, we look forward to further expanding our business opportunities with Woodside in the LNG industry,” added Choi.

Kogas controls or jointly controls five out of South Korea’s seven import terminals at Incheon, Pyeongtaek, Samcheok, Tong-Yeong and Jeju.

The other two terminals are at Gwangyang and Boryeong and are used respectively by steelmaker POSCO and other utilities.

Woodside Energy, the operator of the North West Shelf plant and Pluto LNG in Western Australia and still considering a merger with Australia’s Santos, said it welcomed an opportunity offered to contribute to the Australian Government’s development of a future gas strategy.

The Perth-based company said that with more than 200 submissions made to a consultation process undertaken by the Australian Department of Industry, Science and Resources (DISR), there was a growing recognition of the “pivotal role of gas” at a time when access to secure, affordable and reliable energy supply is becoming increasingly challenging.

“As many submissions identified, gas will play a key role in a responsible energy transition,” said Woodside.

“This was acknowledged by local and state governments, manufacturers, regional customers, power generators, think tanks and policy experts, business and industry groups and unions,” the company added.

Woodside explained that it supported the main objectives of the government strategy and saw them as interrelated goals.

Objectives

The objectives are: providing affordable and reliable energy for Australians; maintaining strategic partnerships and energy security in the region; and simultaneously progressing decarbonisation of trading partners and decarbonisation in Australia.

“Australia has the natural resources to support both the renewable and non-renewable energy developments which will be needed as populations increase and energy consumption rises,” explained Woodside.

“These natural endowments provide Australia with an opportunity to be a regional and global leader in the energy transition,” it added.

However, Woodside said that to achieve these goals the country needed policy settings that would embrace the opportunities presented by a strong Australian gas industry.

“The industry needs fiscal and regulatory stability if it is to continue to take investment risks and develop Australia’s resources,” Woodside declared.

“Government must also provide certainty to workers and businesses, including the Australian manufacturing sector, on the medium-term and long-term role of gas so they can make decisions and invest with confidence,” said the company.

Woodside added that its submission had put forward “practical and constructive” short-term and medium-term recommendations that address issues impacting the gas industry.

“These include improving the regulatory framework to ensure approvals are provided in a timely manner and with certainty. In this respect, it is encouraging that the Commonwealth and the Western Australian State governments are working to ensure there is clarity for all parties around the consultation requirements for offshore developments,” Woodside said.

Wood, the London-listed energy engineering and consulting company formerly known as John Wood Group Plc, has secured a contract from South Korea’s Hyundai Heavy Industries for detailed engineering of the topsides facilities on LNG operator Woodside Energy's Trion Floating Production Unit (FPU) to be deployed in Mexican waters of the Gulf of Mexico.

Woodside Energy, the operator of the Northwest Shelf and Pluto LNG plants in Western Australia, has received a boost for one of its main overseas ventures, the Sangomar project offshore Senegal in West Africa, with the sail-away from Singapore of the “Léopold Sédar Senghor” floating production storage and offloading (FPSO) facility.

Woodside Energy, the operator of the Northwest Shelf plant and Pluto LNG, has signed a Sales and Purchase Agreement (SPA) with Pilgangoora Operations Ltd, a subsidiary of lithium producer Pilbara Minerals for the supply of LNG from the Pluto truck-loading facility at the liquefaction plant.