MELBOURNE, July 1 Australia's Woodside Petroleum
Ltd has signed up to buy liquefied natural gas (LNG)
from Cheniere Energy Inc's export plant in Texas in a
move to help it remain a competitive supplier to buyers in
Japan, Korea and Taiwan.
Proposed exports of LNG from the United States have led the
world's biggest gas importers in North Asia to press for changes
in pricing of gas from oil-linked terms to prices linked to the
U.S. gas benchmark at the Henry Hub delivery point in Louisiana.
"In our opinion, this deal is a portent of the future of the
LNG market. Woodside is responding to market forces," JPMorgan
analyst Ben Wilson said in a note.
Woodside said the deal to buy 850,000 tonnes a year of LNG
from Cheniere's proposed Corpus Christi LNG plant over 20 years
starting in 2019 was part of a strategy to diversify the
company's sources of gas and build its trading capability.
The gas from Cheniere will be priced at 115 percent of the
monthly Henry Hub price plus $3.50 per million British thermal
units (Btu), which Woodside said was in line with contracts with
other buyers from the Corpus Christi project.
Woodside is set to decide in 2015 whether to build a
floating LNG plant for its Browse project off Western Australia,
and the exposure to U.S. gas will give it the flexibility to
offer a mix of oil and gas-linked pricing to potential Browse
customers, JPMorgan's Wilson said.
That would help Woodside stay competitive with LNG majors
like BP Plc, Total SA, BG and Royal
Dutch Shell, who already have exposure to U.S. gas
prices, he said.
(Reporting by Sonali Paul; Editing by Joseph Radford)