Woodside's LNG Fees Exceed Market Rates, Hurdling Louisiana Project Sales

Australia's Woodside Energy is facing challenges in selling liquefied natural gas (LNG) from its planned Louisiana LNG export facility. The company is seeking liquefaction fees above prevailing U.S. market rates, which has been a sticking point for potential buyers.

Woodside has so far secured only one long-term sales and purchase agreement with Germany's Uniper for up to 2 million metric tons per year, equivalent to about 25% of Woodside's share of the plant's output.

The liquefaction fees charged by producers are rising due to labor shortages, increasing construction costs, and strong demand, which has been further boosted by the ongoing Iran conflict. However, the resistance Woodside is facing could signal a ceiling on what buyers are willing to pay for U.S. LNG.