Woodside signs LNG Sale and Purchase Agreement with Corpus Christi Liquefaction, LLC.
Woodside advises that its subsidiary Woodside Energy Trading Singapore Pte Ltd has signed a binding LNG Sale and Purchase Agreement with Cheniere Energy, Inc. subsidiary, Corpus Christi Liquefaction, LLC.
Under the agreement Woodside will purchase approximately 0.85 million tonnes of LNG per annum from the Corpus Christi Liquefaction Project on start up of the second train at the LNG export facility being developed near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is planned to include up to three LNG trains with a combined production capacity of 13.5 million tonnes a year.
LNG will be purchased on a free on board basis. The price payable by Woodside will be 115% of the monthly Henry Hub price plus US$3.50* per million British thermal unit (MMBtu), in line with contracts signed with the other buyers from the Corpus Christi LNG Project.
The twenty-year agreement includes an extension option of up to an additional ten years and a mechanism that gives Woodside the option to forgo deliveries with sufficient notice through the payment of US$3.50*/MMBtu for cancelled quantities. Cargoes to Woodside from Train 2 are expected to start in 2019.
Woodside CEO Peter Coleman said that the agreement with Corpus Christi Liquefaction, LLC complemented Woodside’s existing portfolio by providing a new product source that diversified Woodside’s LNG product offering.
“This agreement is a demonstration of how we are extending and enhancing our marketing and trading capabilities and adding value to the portfolio,” Mr Coleman said.
“From a geographic, pricing and specification perspective we expect this US LNG to be attractive to LNG purchasers, complement our existing LNG portfolio and allow us to exploit new opportunities.”
The agreement is subject to certain conditions precedent, including Corpus Christi Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second train of the Corpus Christi Liquefaction Project.