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    WDS   AU0000224040

WOODSIDE ENERGY GROUP LTD

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Delayed Australian Stock Exchange  -  02:10 2022-07-07 am EDT
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Woodside expects LNG prices to remain high for next few years

05/25/2022 | 12:17am EDT
Preparation for World Gas Conference 2022 in Daegu

DAEGU, South Korea (Reuters) - Woodside Energy Group, Australia's top independent natural gas producer, sees liquefied natural gas (LNG) prices staying high for a few years as the market adjusts to supply disruptions after sanctions on Russia for its Ukraine invasion.

"With the invasion, we are seeing the world try to move away from Russian hydrocarbons and that means that demand for LNG from places like Australia is up," Woodside Chief Executive Meg O'Neill said.

"We do expect ... prices to remain elevated for the next year, perhaps next few years as the world tries to rebalance gas in supply and demand," she told reporters on the sidelines of the World Gas Conference.

The global LNG market was already tight before the invasion because of underinvestment in the past five years, O'Neill said.

"We took an investment decision last year on our Scarborough project, but those volumes aren't going to come into the market until 2026 so there is a period that I think things will continue to be tight."

Woodside owns 100% of the Scarborough project following its merger with BHP Group's petroleum arm. O'Neill said last week that Woodside has received strong interest from companies for a stake in the project.

Too boost its overall supply portfolio globally to meet the rising LNG demand, Woodside is keen to grow its position in the United States, O'Neill said.

Earlier this year, Woodside signed an agreement with Commonwealth LNG to secure 2 million tonnes per annum (mtpa) of LNG supply from Commonwealth's proposed liquefaction plant in Louisiana. The company already has a 20-year deal with Cheniere for supply from its Corpus Christi, Texas, plant.

"We are interested in additional U.S. offtake, one of the things we've realized and we've seen over the last 10 years is the LNG industry has grown tremendously in the Atlantic basin," O'Neil said.

But, Woodside will continue to exit from the Kitimat LNG project on Canada's Pacific coast, though it will keep its stake in the Liard Basin gas resource in Western Canada, she said.

"It's a very big gas resource and we are optimistic that we may be able to find a way to commercialize that either as a gas development or perhaps feeding into an ammonia development," O'Neill said.

Following the BHP merger, the company is evaluating its exposure to oil and gas prices as it picks up more oil production, O'Neill said.

"We've got an opportunity to really design what kind of revenue risk we want to take," she said.

This year, Woodside expects to sell up to 25% of its LNG using gas benchmarks such as the Japan-Korea Marker (JKM) in Asia, the Netherlands' TTF price for Europe, and the UK's National Balancing Point, while the rest is sold on long-term contracts linked to global oil prices.

Gas prices tend to move higher during summer and winter while oil prices are quite stable throughout the year, she said.

(Reporting by Florence Tan; Additional reporting by Sonali Paul; Editing by Himani Sarkar, Richard Pullin and Christian Schmollinger)

By Florence Tan


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BHP GROUP LIMITED 3.13% 38.94 Delayed Quote.-9.01%
LONDON BRENT OIL 4.46% 104.61 Delayed Quote.28.08%
S&P GSCI NATURAL GAS INDEX 11.18% 286.3564 Real-time Quote.53.62%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.91% 64 Delayed Quote.-17.60%
WOODSIDE ENERGY GROUP LTD 0.26% 30.28 Delayed Quote.37.71%
WTI 4.93% 103.107 Delayed Quote.34.26%
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Financials (USD)
Sales 2022 15 007 M - -
Net income 2022 5 395 M - -
Net Debt 2022 3 254 M - -
P/E ratio 2022 6,33x
Yield 2022 11,3%
Capitalization 38 988 M 38 988 M -
EV / Sales 2022 2,81x
EV / Sales 2023 2,77x
Nbr of Employees 3 684
Free-Float 99,2%
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Number of Analysts 16
Last Close Price 20,46 $
Average target price 24,32 $
Spread / Average Target 18,9%
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Managers and Directors
Meg O’Neill Chief Executive Officer, MD & Director
Graham Tiver Chief Financial Officer & Executive Vice President
Richard J. B. Goyder Chairman
Daniel Kalms Executive Vice President-Technical Services
Fiona Hick Executive Vice President-Operations
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