Woodside in talks to supply LNG to Viva Energy's east Australian import terminal

Australia's Woodside Petroleum is in discussions to supply LNG to an import terminal that Viva Energy plans to build in Victoria state, the two companies said on Thursday. 

Viva and Woodside have agreed on a framework and timeline to negotiate capacity rights for Woodside, thecountry's biggest independent oil and gas company, to regasify LNG for sale into Australia's east coast market, which is expected to face a gas supply shortfall from the mid-2020s. The tentative deal with Woodside gives Viva, which plans to build its import terminal on a dock near Melbourne, a leg-up over four rival LNG import projects, as none of them have lined up supply sources.

The rival Port Kembla LNG import terminal in neighbouring New South Wales state, backed by Australian billionaire Andrew Forrest, has already begun preparatory construction work. Viva Energy last month said it plans to submit its environmental effects statement to state regulators by the end of this year and wants to make a final investment decision on the project in the third quarter of fiscal 2022, aiming for first LNG imports in 2024. 

"Working to secure regasification capacity at Viva Energy's proposed import terminal aligns with Woodside's future production profile and the ongoing needs of east coast Australian customers," Woodside CEO Meg O'Neill said. 

Viva Energy said it has signed an agreement with Norway-based Hoegh LNG Ltd to charter a floating storage and regasification unit (FSRU) for the proposed Geelong terminal. Woodside will mark its first entry into the tight east coast market with its acquisition of BHP Group's petroleum arm, due to be completed by June 2022.

BHP's Gippsland Basin joint venture with Exxon Mobil Corp has been the biggest gas supplier into eastern Australia for decades, but those fields are drying up, driving the need for LNG imports.

(Reporting by: Tejaswi Marthi in Bengaluru; Additional reporting by: Sonali Paul in Melbourne; Editing by: Rashmi Aich and Stephen Coates)

 

 

 

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