Woodside said that traditional LNG markets are well supplied while growth from emerging buyers enabled by lower prices, new technologies and business models.
However, in supply side, sanction of additional 20 MMT/Y gas liquefaction capacity required to meet future demand. Since start of this year, 3.8 MMT/Y new LNG export project [Tangguh plant’s expansion project] sanctioned but 39.4 MMT/Y new planned LNG export projects deferred, Woodside has reminded in its 2016-H1 results briefing on 19 August.
“You can see a change is happening in the LNG market as new LNG buyers are emerging as prices reduce and floating storage and regasification units become commonplace,” the Australian operator’s CEO, Peter Coleman said.
With nearly 40 MMT/Y of future production deferred since the beginning of this year, “we remain of the view that new supply will need to be sanctioned from 2018 onwards to meet market demand from the mid-2020s,” Coleman added.
Regarding its LNG contracting position, Woodside revealed that its objective is to reduce its spot exposure on Pluto and North West Shelf LNG plants volumes to between 10% and 15% as its new mid-term contracts close to finalization and equivalent volume is under negotiation and is also expected to be finalized by year end.
“We're targeting for 85% to 90% of expected 2017/18 LNG production to be committed under term contracts and we're currently extending our debt maturity profile and capacity,” Woodside said.
However, the company has admitted that it expects lower LNG prices as it renegotiates short-term contracts and buyers will increasingly resist deals that restrict the reselling of the purchased LNG.

Related Document:

World LNG Trading 2015, Outlook 2016