Woodside to supply QatarEnergy with Louisiana LNG under 20-year contract

what happened

Woodside Energy of Australia said on Thursday that it will deliver liquefied natural gas from its Louisiana LNG project to QatarEnergy under a 20-year agreement, Reuters reports. Volumes will be up to 3 million tonnes per year. Free-on-board deliveries start with the second train of the project and reach 3 million tonnes per year once the third train starts up.

The contract gives the Qatari company a way to serve buyers outside the Gulf while shipments through the Strait of Hormuz remain blocked by the Middle East war. For Woodside, it is also a chance to fill capacity at Louisiana LNG, which has few long-term buyers so far. Before this deal, the project had only one long-term sales agreement, with Germany's Uniper.

The project, a 16.5 million tonnes per year export plant with an investment of $17.5 billion as of August, is under construction and targets first LNG in 2029. QatarEnergy has already told some clients that deliveries will not arrive before the end of this year.

why it matters

The length of the contract matters for markets. Balfour Capital Group's global research director, Hersh Oberoi, read it as a sign that Qatar sees the Hormuz risk as lasting. LNG prices remain near multiyear highs amid the conflict and forecasts for colder weather, and deals of this length lock in volumes for years ahead.

market impact

Gas and LNG: a long contract locks in US supply while Hormuz remains blocked

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