| CHIBA, Japan, April 4
CHIBA, Japan, April 4 Woodside Petroleum
is considering sales of some of its liquefied natural
gas (LNG) on a fixed-price basis, the chief executive of
Australia's largest independent oil and gas producer told
reporters on Tuesday at a conference in Japan.
LNG supply contracts need to evolve by diversifying their
pricing basis, particularly for new entrants into the market,
said Peter Coleman at a Gastech press briefing.
"We've talked about a lot of innovation in our business
models but the reality is that the way we contract hasn't
changed very much at all," he said, adding that most supply
contracts were still linked to oil prices.
Woodside has been considering the fixed-price structure,
especially for buyers in developing markets as it gives these
new participants surety of supply and price, Coleman said.
"It is something we are looking at for parts of our
portfolio," he said. Coleman said he would be comfortable having
between 20 and 30 percent of Woodside's LNG portfolio being sold
on a fixed-price basis, but with shorter contract periods to
The need for more diversity in LNG pricing comes amid an
overall push for contract flexibility in the industry.
Last month, the biggest buyers in the world's top three LNG
consuming countries - Japan, South Korea and China - clubbed
together to push for more flexible supply contracts that drop
cargo destination clauses.
Other producers are also toying with the idea of fixed
pricing in supply contracts.
Tellurian Inc Chairman Charif Souki on Tuesday said
at the gas conference that his firm could guarantee deliveries
of the supercooled fuel to Japan for $8 per million British
thermal units all inclusive from 2023.
The cargoes that would come from its planned Driftwood
terminal in Louisiana would be sold under five-year contracts.
BROWSE PROJECT IN PROGRESS
Woodside and its partners are expecting to reach a decision
on how to develop their Browse LNG project within the next two
years, Coleman also said.
"We are looking for decisions on Browse before 2020, (and)
we are targeting to get Browse flowing into the North West Shelf
around 2025," he added.
Woodside is planning to use its liquefaction capacity at the
North West Shelf project to bring the gas to market.
"The Browse concept at the moment, if it goes through the
North West Shelf, is now just simply an offshore development
with a long pipeline ... All the infrastructure, the big
expensive part of it, is already there. It is de-risked,"
(Reporting by Mark Tay; Editing by Tom Hogue)