Woodside Adds LNG Export Capacity Through Western Australia Supply Tradeoff

Woodside has secured additional LNG export capacity in Western Australia through a deal tied to increased domestic gas supply, highlighting the balance between exports and local energy demand.

(Reuters) — Energy giant Woodside has signed a deal with the Western Australia government to export about 3 million tonnes more LNG in return for selling additional gas to the domestic market, the Australian Financial Review reported on March 17.

Western Australia's domestic gas policy requires LNG exporters to reserve around 15% of their production for domestic markets to ensure stable supply for the region, unlike the East Coast where supply shortages are a recurring issue.

The Woodside deal was struck last month via an amendment to a state agreement governing the use of infrastructure supporting the company's Pluto gas project, according to the AFR report.

Under the deal, Woodside will supply 23 petajoules of additional gas into the domestic market by 2029, AFR reported.

In January, the Australian energy firm had said it has finalized commercial and government agreements to accelerate LNG and domestic gas production from Pluto feed gas.

The arrangements would facilitate processing of around 2.8 million tonnes of additional LNG in aggregate and about 22.9 PJ of additional gas for the Western Australia domestic gas market, Woodside had said.

Pluto LNG 2 is due to start up in the last quarter of this year, adding five million tons capacity.

Woodside did not immediately respond to a Reuters request for comment.

Meanwhile, the Australian Energy Market Operator predicted a small power shortfall in Western Australia in the 2025-2026 period, but cautioned the longer-term outlook remains uncertain.

The AEMO report said more capacity must be procured before the end of the decade.