Page 11 - AsianOil Week 03 2021

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Woodside, Uniper expand LNG supply deal

PROJECTS & AUSTRALIA’S Woodside Energy has agreed to spot LNG prices soaring in recent weeks, pro-
COMPANIES expand its supply of liquefied natural gas (LNG) jects once deemed overly risky are once again
to Germany’s Uniper Global Commodities. under review.
Woodside said on January 18 that its Singa- Woodside CEO Peter Coleman told Austral-
porean trading unit had agreed to double the ian daily The Age on January 21 that “momen-
volumes originally laid out in their binding long- tum” was returning for an FID on the AUD16bn
term sale and purchase agreement (SPA), which ($12.32bn) Scarborough project.
was announced in December 2019. Coleman said he saw “a lot of positive signs”
Woodside Energy Trading Singapore will that Asian LNG demand was strengthening,
increase initial supply volumes starting in 2021 adding: “Chinese buyers are now coming back
to 1mn tonnes per year, and again to approxi- into the market, they’ve approached us again
mately 2mn tpy from 2026. recently to re-engage on negotiations.”
While the LNG is to come from the com- He said: “We think everything is starting to
pany’s global portfolio, Woodside said the line up and gather momentum again.”
majority of supply from 2025 was conditional The deal with Uniper, Coleman said, demon-
upon a final investment decision (FID) being strated further progress towards reaching FID
reached on the development of the Scarbor- in the second half of this year. He added: “This
ough gas resource offshore Western Australia. agreement with Uniper highlights the strong
It noted that the 13-year term of the SPA was market demand we are seeing for Scarborough
unchanged. LNG as customers consider their energy require-
The Scarborough FID was delayed after last ments from the second half of this decade. We
year’s oil price collapse drove developers around have now secured long-term customers for
the world to slash upstream budgets in a bid to over 40% of our expected Scarborough equity
ride out the economic downturn. However, with production.”™

Woodside, Santos post

record production in 2020

PERFORMANCE AUSTRALIA’S two largest oil and gas develop- Commenting on the performance results,
ers, Woodside and Santos, have posted record Woodside CEO Peter Coleman said: “Production
production figures for 2020, though both com- licences were awarded [in the fourth quarter] for
panies saw revenues compressed by last year’s the processing of Scarborough gas through an
energy price collapse. expanded Pluto facility and we remain on track for
Woodside’s production climbed by 12% year a targeted final investment decision [FID] on the
on year to 100.3mn barrels of oil equivalent development in the second half of this year.”
in 2020 from 89.56mn boe in 2019. This was He added: “Oil and gas prices have strength-
despite the company’s fourth-quarter output of ened considerably heading into the first quarter
24.9mn boe falling slightly from the 25.3mm boe of 2021. We agreed to our highest ever spot LNG
recorded in July-September and the 25.7mn boe price for delivery in the coming quarter, surpass-
recorded in the same quarter of 2019. ing our previous record set in 2012.”
Woodside said its fourth-quarter sales reve- Santos’ production, meanwhile, climbed
nue had climbed by 32% quarter on quarter to by 18% y/y to 89mn boe in 2020 from 75.5mn
AUD920mn ($708.3mn), but had shrunk from boe in 2019, sitting at the top end of the com-
the AUD1.41bn ($1.09bn) recorded in the final pany’s guidance upgrade in December 2020.
three months of 2019. Moreover, the company Fourth-quarter production expanded by 1%
revealed that its quarterly revenue had been q/q to 25.4mn boe from 25.1mn boe in the
adjusted down by AUD87mn ($67mn) to reflect same period of 2019. The company’s revenue
price reviews that were currently under negoti- contracted by 16% in 2020 to $3.39bn from
ation for multiple contracts across NWS Project $4.03bn in 2019. While fourth-quarter revenue
and Pluto LNG. climbed to $922mn from the $797mn recorded
Woodside has set a production guidance for in July-September, it was down from the $1.03bn
2021 of 90-95mn boe, with liquified natural gas reported in the same period of 2019.
(LNG), liquids and Australian domestic gas out- Santos kept its 2021 production guidance of
put all anticipated to shrink this year. 84-91mn boe, as set in December, unchanged.™

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