Woodside Energy CEO Meg O’Neill announced on Monday that the company is in discussions with onshore US gas producers, pipeline companies, and like-minded firms to partner on its Driftwood LNG project. Speaking at an investor conference in New York, O’Neill highlighted the frustration among US gas producers who earn lower Henry Hub prices for gas that is then turned into LNG and sold at higher global prices. By partnering with these producers, Woodside aims to increase their revenue while securing a gas supply for its project.
Woodside is seeking clarity on its partnering approach before making a final investment decision, although it is unlikely to have all agreements in place by the first quarter of 2025. The company’s recent acquisition of Tellurian, including its Driftwood LNG export project, for $1.2 billion, is expected to strengthen the US position as the world’s largest LNG producer. The deal will secure the completion of Tellurian’s 27.6 million metric ton per annum facility in Lake Charles, Louisiana.
The Driftwood project has attracted interest from infrastructure developers and strong counterparties in Asia and other regions. One of its most attractive features is that it was not impacted by the Biden administration’s decision to pause LNG export application approvals, giving Woodside a year’s advantage over other projects. O’Neill also noted that increased global LNG supplies towards the end of the decade are unlikely to impact demand or prices, as growing demand will offset higher production.
Woodside’s chief commercial officer, Mark Abbotsford, added that the current economic challenges in China are short-term and that the long-term trajectory points to strength in LNG demand, particularly due to the switch from coal to gas. As the company moves forward with its Driftwood LNG project, it is confident in the growth of global LNG demand and the project’s potential to meet that demand.
