U.S. LNG Export Pause Creates Opportunities for Middle East Producers, Says Woodside CEO

(Reuters) — A moratorium on new U.S. liquefied natural gas (LNG) export projects could open up opportunities for producers in the Middle East and Russia, but Western sanctions are curbing Moscow's ambitions to expand its global gas trade, a senior industry official said.

U.S. President Joe Biden's administration announced in January a pause on pending and future permits to export LNG to non-Free Trade Agreement countries until the Department of Energy finishes a new review of climate impacts. The U.S. was the world's top LNG exporter last year.

"There's plenty of gas in the U.S., in the Middle East and in Russia," Australia's Woodside Energy CEO Meg O'Neill told reporters on the sidelines of an Australian gas industry conference on Tuesday.

"The question is how does the Middle East respond with a number of different project sanctions."

Qatar is already planning an 85% expansion in LNG output from its North Field to 142 million metric tons per year by 2030 and could overtake No. 2 exporter Australia where new projects have been slow to develop.

Other Middle East producers, Saudi Aramco and Abu Dhabi National Oil Co. from the United Arab Emirates, like Woodside, are actively seeking acquisitions in the U.S. to expand LNG trading.

For Russia, Western sanctions are hampering its efforts to expand LNG exports, O'Neill said.

"Russia certainly has the gas, the challenge is they don't have the technology, or the technical capability and we've seen that affect for example the pace at which Arctic LNG 2 has been progressing," she said.

"So without access to the OEMs (original equipment manufacturers) and the expertise that Western companies bring, the Russian industry will struggle."

On demand, while China, the world's top LNG importer, has been buying energy products from Russia, they have also signed up for a number of long-term LNG offtake deals from U.S. producers, O'Neill said.

"China is very sophisticated in terms of managing their energy mix to ensure that they have that energy security," she said.

"They will manage their risk and they will not get too captive with one particular supplier."

For Japan, O'Neill was unfazed by concerns that gas demand at the world's No. 2 LNG importer could decline in the long run as Tokyo prioritizes nuclear and renewable energy.

"Japanese energy policy... they're looking at how do they get the right mix for the long term, of nuclear, gas, renewables and others," she said.

"But the actions of Japanese companies are quite telling. They want more LNG, and they want LNG from Australia," she said, as LNG Japan and JERA took a 25% stake in Woodside's Scarborough offshore development and signed up for additional LNG offtake.

Related News


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}