(Bloomberg) -- The head of Australia’s largest liquefied natural gas exporter said that higher prices for the Northern Hemisphere winter, when demand typically peaks, indicate the market is still finely balanced.
“What we are seeing in the forward curve, particularly in Asia, is actually a bit of a tick-up versus a typical pricing level,” Meg O’Neill, the chief executive officer of Woodside Energy Group Ltd., said in an interview on Bloomberg TV. “The market is nervous about a cold winter and what that means, and customers are trying to get ready.”
While gas prices have eased significantly from the record-high levels in 2022 following Russia’s invasion of Ukraine, the market is still susceptible to volatility as little new supply has come online. Europe has turned to LNG to help fill the void left by Russian pipeline gas, risking more competition with Asia, home to the largest consumers of the seaborne fuel.
The North Asia LNG futures curve shows higher prices for this and next winter, before they slump from 2026 as new supply enters the market.
Still, Europe is heading into the colder months with inventories almost completely full, which will help temper future price gains. This has also allowed for more LNG shipments to flow to Asia over the last several months.
Woodside sees a long-term role for LNG in the global energy mix, and O’Neill said that it is happy to consider joining potential projects in the Middle East. The producer has been looking to expand its energy portfolio, and earlier this year bought US LNG developer Tellurian Inc. for $900 million.
Shares in the company rose as much as 5.3% in Sydney, their biggest gain since April 2023, after it posted an 11% increase in first-half net income.
--With assistance from Joumanna Bercetche.
©2024 Bloomberg L.P.
