Woodside set to supply cargoes to new Australian LNG terminal

Tuesday, 14 December 2021
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Viva Energy’s proposed regasification facility is at the Geelong refinery in southern state of Victoria 

LNG News Editor: 

Woodside, the operator of two liquefied natural gas export plants in Western Australia, has signed an accord which could enable Woodside to supply LNG to the East Coast market through Viva Energy’s proposed regasification terminal at Geelong in the southern state of Victoria.

Woodside and Viva Energy, the refinery operator and leading supplier of Shell fuels in Australia, have entered into a memorandum of understanding to progress discussions on capacity rights at the LNG terminal at the site of Viva Energy's Geelong oil refinery.

Discussions

“Under the terms of the MoU, Woodside will discuss with Viva Energy the opportunity to acquire regasification capacity usage rights at the terminal to regasify LNG,” said a statement.

“This could help underpin the Gas Terminal Project as a key infrastructure solution to address the expected gas supply shortfall in the East Coast Australian market from the mid-2020s, and support the National Electricity Market’s transition to lower-carbon energy,” the companies added.

In addition, Viva Energy said it signed a Heads of Agreement with Höegh LNG to charter a floating storage and regasification unit (FSRU) for the proposed Geelong Gas Terminal.

Melbourne-based Viva Energy said Höegh LNG was an industry leader in FSRU import solutions and currently operates a fleet of 10 FSRUs and two LNG carriers.

“The HoA sets out a framework and key terms for the negotiation of a binding Time Charter Party (TCP) agreement and is a material step in the delivery of the Viva Energy Gas Terminal project, confirming an FSRU provider for the project,” added Viva Energy.

Viva Energy’s existing LNG regasification terminal partners are Engie Australia & New Zealand , Mitsui & Co. of Japan and global commodities firm Vitol.

The Woodside-Viva Energy accord outlines terms for ongoing discussions of a capacity rights agreement at the LNG terminal, which subject to definitive agreements and approvals, would enable Woodside to supply LNG and to regasify it at Geelong.

“The MoU provides a framework and timeline to negotiate binding regasification capacity commitments, which are targeted to be executed following Woodside and Viva Energy approvals and are subject to a final investment decision,” said the companies.

Woodside will work together with Viva Energy in the project on an exclusive basis in relation to LNG regasification terminals in southeast Australia.

Subject to regulatory approvals, Viva Energy is planning to take a final investment decision to proceed with the project by the third quarter of 2022.

Woodside Chief Executive Meg O’Neill welcomed the collaboration with Viva Energy on potential LNG supply from Woodside’s portfolio of the North West Shelf and Pluto liquefaction and export plants supplying Asia with cargoes.

“Our MoU with Viva Energy presents an opportunity for Woodside to supply reliable, cost-competitive LNG from our Western Australian projects and global portfolio into the East Coast gas market, which is predicted to face a shortfall in coming years,” added O’Neill.

“Working to secure regasification capacity at Viva Energy’s proposed import terminal aligns with Woodside’s future production profile and the ongoing needs of East Coast Australian customers for reliable, lower-carbon energy sources,” she added.

Viva Energy CEO Scott Wyatt said he was very pleased to be making progress in the talks with Woodside.

Experience

“Woodside’s experience and capability in LNG supply, shipping, terminals and international gas markets will assist us in progressing the Gas Terminal Project,” stated Wyatt.

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