Commonwealth to supply LNG to Woodside from Louisiana

Singapore-based unit of Australian energy major Woodside has signed a heads of agreement (HOA) with Commonwealth LNG for the supply of LNG from the proposed export terminal in Louisiana.

Under the HOA, Woodside Energy Trading Singapore and Commonwealth LNG will negotiate a sale and purchase agreement for the supply of liquified natural gas.

The proposed Commonwealth LNG development is an 8.4 million tonnes per annum (mtpa) LNG liquefaction and export facility. It is located on the west bank of the Calcasieu Ship Channel near Cameron, Louisiana. Commonwealth is targeting the start of commercial operations at the facility by the second quarter of 2026.

The deal specifically looks at a potential purchase by Woodside of 2.0 mtpa of LNG. As mentioned, this would start in the second quarter of 2026 and would last for 20 years.

Woodside’s offtake obligation can be reduced or even eliminated as Commonwealth achieves increasing thresholds of offtake commitments from other buyers.

Woodside would also have an option to purchase an additional 0.5 mtpa of LNG.

The deal is non-binding. It is also conditional upon:

• the negotiation and execution of an LNG sale and purchase agreement;
• all necessary approvals;
• a final investment decision on the proposed development.

Woodside CEO Meg O’Neill said both Commonwealth and Woodside share a commitment to cost-effective and optimised solutions for LNG customers. “This HOA with Commonwealth secures access to competitive LNG in the Atlantic Basin and provides Woodside with the ability to build market scale through acquiring low-cost supply.”

Commonwealth LNG CEO Paul Varello added in conclusion: “This HOA is testament that Commonwealth’s approach to lowering the cost of LNG produced in the US is gaining prominent support.”