Woodside to Proceed with US LNG Purchase Deal

Australia's Woodside will go ahead with its deal to purchase LNG from US as Corpus Christi project got a final go ahead. 

“Woodside advises further to its announcement released on 1 July 2014 that the conditions precedent to the LNG sales and purchase agreement with Corpus Christi Liquefaction LLC have been satisfied,” the company announced Thursday.

Corpus Christi Liquefaction LLC, a subsidiary of Cheniere Energy Inc., made a final investment decision on the construction of Trains 1 and 2 of the Corpus Christi Liquefaction project on Wednesday.

There are no changes to the other key terms as announced in July last year, Woodside said.

Under the agreement Woodside will purchase approximately 0.85 million tons of LNG per annum from the Corpus Christi Liquefaction project on start-up of the second train at the LNG export facility being developed near Corpus Christi, Texas. The project is planned to include up to three LNG trains with a combined production capacity of 13.5 mt a year.

LNG will be purchased on a free on board basis. The price payable by Woodside will be 115% of the monthly Henry Hub price plus $$3.50 per million British thermal unit (MMBtu), in line with contracts signed with the other buyers from the Corpus Christi LNG project.

The twenty-year agreement includes an extension option of up to an additional ten years and a mechanism that gives Woodside the option to forgo deliveries with sufficient notice through the payment of $3.50/MMBtu for cancelled quantities.

Cargoes to Woodside from Train 2 are expected to start in 2019.