Woodside has signed a deal to ship as much as 14 million tonnes of liquefied natural gas to Taiwan over two decades.
The contract with Taiwan’s state-owned CPC Corporation marks the first long-term deal the Perth-based business has inked with the East Asia nation.
About 6mt of the super-chilled gas will be supplied over 10 years from Woodside’s global portfolio.
CPC will have the option for another 8.4mt from 2034 to 2043.
“This agreement with CPC for long-term supply to Taiwan is a first for Woodside and another demonstration of the ongoing demand for Australian LNG in Asian markets,” Woodside chief executive Meg O’Neill said in a statement.
“It also reinforces the value our customers place on Woodside’s ability to maintain safe and reliable supply of energy into the 2030s.”
Taiwan is the fourth top destination for Australian gas exports, according to the Federal Government’s recently released Future Gas Strategy.
More than 35 per cent of gas used in that country is shipped from Down Under.
The so-called Asian Tiger economy has been moving towards gas and away from nuclear power, analysts EnergyQuest said in a June report.
“Taiwan is committed to net zero by 2050 but is aiming to phase out nuclear by 2025 and increase the use of gas,” the report said.
About half of the country’s power could be generated by gas by next year, the report said, up from 39 per cent in 2022.
That would require about 3mtpa of additional LNG imports, EnergyQuest estimated.
But it’s still a live issue.
As recently as Wednesday, Taiwanese media were reporting that the country’s opposition parties were pushing to extend the life of nuclear plants.
Only one of the four nuclear power projects in Taiwan is still operational.
Woodside has signed a series of supply deals in recent years as the ASX20 company builds the Scarborough to Pluto gas plant in WA’s Pilbara region.
Demand has been driven by security concerns and the fuel’s use in the energy transition.
Gas emits greenhouse gases when used to make heat and power or in manufacturing, driving concern from conservationists about the impact on the climate.
The fuel has been used to replace coal power as it can be more flexible for electricity generation, and the International Energy Agency has previously forecast gas use will lift 2.5 per cent this year.
Woodside locked in a 10-year deal with South Korea’s Kogas in February for 500,000 tonnes a year.
In September 2022, Germany’s Uniper signed on for 12 cargoes for European customers each year until 2031, with the option to extend another eight years. That could tally nearly 13mt of LNG.
The agreement was inked at a time when Europe was scrambling to source alternative gas supplies in the aftermath of Russia’s horror invasion of Ukraine.
Woodside shares lifted 1.2 per cent to be $28.82 at the close of trade.