Woodside agrees to supply 0.6 mil mt/year LNG to China Resources for 15 years

Australia's Woodside Energy said March 17 it has signed a long-term sale and purchase agreement with China Resources Gas International to supply 0.6 million mt/year of LNG on a delivered basis for 15 years from 2027.

Woodside's latest SPA marks its fourth agreement for a long-term LNG supply into Asia since 2024.

"This marks the first time Woodside, on a standalone basis, has signed a long-term sale agreement with a customer in China, Asia's largest consuming market for LNG," Woodside Executive Vice President and Chief Commercial Officer Mark Abbotsford said in a statement. "And it is the first time China Resources has signed an agreement to procure LNG over a period of 15 years."

A Woodside spokesperson said its LNG supply to China Resources will be sourced from its portfolio, declining to elaborate further.

For China Resources, its SPA follows the recent signing of a strategic cooperation agreement with PipeChina, under which the latter is expected to invest in the former's LNG terminal project in Jiangsu.

China Resources' subsidiary, CR Gas, is one of the five largest city gas distributors in China. The company began construction of a 6.5 million mt/year LNG terminal in Rudong county, Nantong city, Jiangsu province, on June 21, 2023, the Nantong Development and Reform Commission said on its official website.

With a total investment of Yuan 8 billion, China Resources' Rudong LNG terminal project is divided into two phases. The first phase includes the construction of four LNG storage tanks, each with a capacity of 200,000 cu m, an LNG dock capable of berthing LNG vessels up to 266,000 cu m and various supporting facilities. The second phase involves building two additional 200,000 cu m LNG storage tanks and further supporting infrastructure.

Once fully operational, the terminal will have an LNG storage capacity of 1.2 million cu m and a natural gas supply capacity of 9 Bcm/year, according to the Nantong DRC.