QatarEnergy signs 20-year LNG purchase deal with Woodside for Louisiana project

QatarEnergy has entered into a 20-year agreement to acquire as much as three million tonnes per year of liquefied natural gas from Woodside Energy’s development in Louisiana, expanding the Qatari company’s reliance on American supplies to offset risks linked to the Strait of Hormuz.

Delivery terms are free-on-board. Volumes will start once the second processing unit at the Louisiana facility begins operations and will increase to the full three million tonnes after the third unit is commissioned. Qatar’s state news agency, QNA, indicated that the first shipments are anticipated in 2030.

Strategic shift towards US supply

Saad Al Kaabi, Minister of State for Energy Affairs and president and chief executive of QatarEnergy, said the additional volumes make his company the biggest buyer of LNG from the United States. He added that the firm’s Golden Pass project in Texas and its expanding American purchase portfolio support its long-term growth and diversification strategy.

Liz Westcott, chief executive of Woodside, described the deal as a strong vote of confidence in the Louisiana LNG project. The facility, situated near Lake Charles, is designed to have three processing units with a combined capacity of 16.5 million tonnes a year. A final investment decision for the project was taken in April of last year, and first LNG output is targeted for 2029.

Growing US portfolio amid Gulf disruptions

The agreement follows a similar deal last week in which QatarEnergy agreed to buy four million tonnes a year from Cheniere through 2054. Golden Pass began exports in March.

On Thursday, Cheniere raised its full-year financial guidance, citing stronger demand for US cargoes as a result of Middle East gas disruptions. The company now expects adjusted earnings before interest, tax, depreciation and amortisation of $8.75 billion to $9.25 billion, up from a previous range of $7.9 billion to $8.4 billion. Third-quarter revenue increased 39 percent to $6.17 billion, and the firm shipped 188 cargoes.

This week, Italy’s Edison stated that QatarEnergy had extended force majeure on its deliveries until the end of December. Buyers in Pakistan and Bangladesh were notified that their supply suspensions would continue through year-end, according to Reuters. Bangladesh’s Petrobangla said it was purchasing spot cargoes at a significant cost.

Impact of regional instability

An Iranian strike on the Ras Laffan facility knocked out roughly 17 percent of Qatar’s LNG production capacity. QatarEnergy has warned that repairs could require up to five years.

Gulf producers have been accelerating efforts to secure US LNG supplies since the conflict began. Abu Dhabi’s Mubadala Energy is building a $13 billion project in Louisiana, while XRG has increased its stake in the Rio Grande LNG terminal in Texas.

The Strait of Hormuz normally handles about one-fifth of global LNG trade. Shortfalls from Qatar have pushed Europe’s TTF gas benchmark above €95 per megawatt hour this week, close to levels not seen since December 2022.