Woodside says LNG buyers willing to pay more
PERTH, May 1 (Reuters) - Buyers of liquefied natural gas (LNG) are increasingly prepared to pay prices similar to those of oil, amid strong demand and a lack of reliable supplies, Australia's Woodside Petroleum Ltd (WPL.AX) said on Thursday.
LNG, which is gas chilled to liquid form for transport in ships, has previously been much cheaper than oil, but surging demand due to environmental concerns about fossil fuels as well as tight global supplies have boosted prices recently.
"Buyers are increasingly prepared to pay prices for LNG which are close to oil price equivalent," Woodside Chairman Michael Chaney said in a statement delivered at the company's annual shareholder meeting in Perth.
Soaring energy prices, from oil to gas to coal, have boosted revenues for producers but slashed profits for many utilities.
Oil prices on Monday struck a life high of $119.93 a barrel on supply disruptions in Nigeria and Britain, while spot thermal coal prices have jumped over 130 percent from a year ago to about $130 a tonne.
Indonesian and Japanese buyers in March agreed to higher LNG prices of around $16 per million British thermal unit, based on oil prices of $100 a barrel.
Analysts have said the price was the highest they had seen for term LNG deals.
Woodside is Australia's second-largest oil and gas producer and the operator of the A$20 billion North West Shelf LNG venture, which has a production capacity of 11.9 million tonnes a year and expected to rise to about 16 million tonnes by year-end.
Woodside also reiterated its 2008 production forecast of between 80-86 million barrels of oil equivalent. (Reporting by Fayen Wong)
