The Woodside Petroleum (ASX: WPL) share price is currently up around 1% after announcing a new liquefied natural gas (LNG) agreement.
Woodside Petroleum is Australia’s largest independent oil and gas company with a global portfolio. It is an explorer, developer, producer and supplier of energy. The company has been operating for over 60 years and is now Australia’s leading LNG producer. Some of its current development projects are in Senegal (SNE), Myanmar, Canada (Kitimat) and Timor-Leste / Australia (Sunrise).
Woodside Signs Agreement for Long Term LNG Supply
Woodside Energy Trading Singapore (Woodside) announced today that it has entered into a long term sale and purchase agreement (SPA) with Uniper Global Commodities SE (Uniper) for the supply of LNG from Woodside’s global portfolio for a term of 13 years commencing in 2021.
The quantity of LNG to be supplied under the SPA will initially be u; to 0.5 million tonnes per year (Mtpa), which will increase to around 1 million tonnes per year from 2025. Supply from 2025 is conditional upon a final investment decision on the Scarborough development.
Woodside recently announced that the estimated gross contingent dry gas volume for the Scarborough field has increased to 11.1 Tcf (trillion cubic feet), an increase of 52%.
This means Woodside’s share has risen from 5.5 Tcf to 8.3 Tcf.
Woodside’s interest in Greater Scarborough, which includes Scarborough, Thebe and Jupiter field) comprises a 75% interest in WA-1-R and a 50% interest in each of WA-61-R, WA-62-R and WA-63-R, with Woodside being the operator of these retention leases.
The increased volume estimates came from new seismic reprocessing to improve the reservoir imaging quality and increased reservoir sand distribution.
Woodside said at the time that this showed how Scarborough could meet growing demand for gas in Asia as well as supplying the domestic market in Western Australia.
Execution of today’s sale and purchase agreement follows the signing of a ‘heads of agreement’ between Woodside and Uniper in September 2019.