(Reuters) – Australian oil and gas major Woodside Energy said on Wednesday it had signed a supply deal with BP, under which the British energy giant would supply natural gas to its Louisiana liquefied natural gas (LNG) project.
Under the deal, the Louisiana project would buy up to 640 billion cubic feet of gas from the integrated energy major, on a long-term basis, Woodside said in a statement, but it did not disclose any financial details of the agreement.
Woodside bought Tellurian for $1.2 billion last year to develop the 27.6 million metric tons a year Louisiana LNG project, formerly called Driftwood, in four phases to meet growing demand for gas.
Louisiana LNG would help Woodside produce around 24 million tons per annum (Mtpa) from its worldwide LNG portfolio in the next decade, making up for more than 5% of its global supply, to service demand in Europe and Asia.
The project is expected to generate $2 billion in annual net operating cash in the 2030s, offering an internal rate of return of 13% and a payback period of seven years.
Earlier this month, Woodside, Australia’s top gas producer, agreed to sell a 40% stake in its Louisiana LNG plant to U.S. infrastructure investor Stonepeak for $5.7 billion. (This story has been corrected to say gas, not LNG, supply deal in the headline)
(Reporting by Rajasik Mukherjee; Editing by Alan Barona and Rashmi Aich)
