Qatar Energy has concluded a long-term agreement to purchase up to 3 million tons annually of liquefied natural gas from the Australian company Woodside Energy, for a period of 20 years, with supplies starting in 2030 from the Louisiana LNG project in the United States.
Under the Sales and Purchase Agreement, shipments will be delivered on a free-on-board (FOB) basis; This means that the buyer undertakes the shipping arrangements, insurance, and costs associated with sea transportation after loading the shipments onto the ship, according to the terms of the agreement.
Woodside Energy said that the agreement strengthens the long-term customer base for the “Louisiana” project, which is being constructed near Lake Charles in the US state of Louisiana, and the company aims to start producing liquefied gas from it in 2029.
In its basic phase, the project includes three production lines with a total capacity of 16.5 million tons annually. According to the company, supplies to Qatar Energy will begin from Woodside’s share in the quantities allocated to the project’s holding company, with the start of operation of the second production line, rising to 3 million tons annually when the third line begins operation.
Liz Westcott, CEO and Managing Director of Woodside Energy, said that the agreement represents an important step in developing the project’s long-term customer base, and reflects confidence in its competitive ability. She added that the agreement comes as a continuation of a previously announced supply agreement with the German company Uniper.
The company explained that the two agreements provide a degree of clarity regarding future revenues for an important part of the project’s production, while it continues to work to reach the start of commercial production.
Woodside described the Louisiana project as one of the important components of its global portfolio, noting that it will add diverse geographic supply sources and enhance its ability to meet the needs of its customers in global markets.
Baker Hughes' profits declined in the third quarter of the year, affected by the continuing conflict in the Middle East and the pressure it imposes on demand for oil and gas sector services and equipment, especially in the region, which represents one of the company's most important markets. On the other hand, the company expects an improvement in the prospects for global spending on exploration and production activities during the year 2027, despite the likelihood of a decline in its activity in the Middle East during the last quarter of the year.
The company recorded net income of $411 million, or 41 cents per share, during the three months ending September 30, compared to $609 million, or 61 cents per share, in the same period last year, according to Reuters.
The continued conflict in the Middle East and renewed tensions have put pressure on the profit margins of oil field services companies, in light of delayed decisions related to projects, disruption of operational activities, and increasing concerns about the pace of future customer spending. Baker Hughes generates about 40 percent of its revenues from the region, which makes its exposure to it greater than its competitors, SLB and Halliburton.
The sector is also facing weak demand, as producers tend to use more efficient extraction techniques, in conjunction with abundant supplies of crude oil and natural gas, which limits the need to drill new wells.
Baker Hughes' revenues in North America declined to $955 million, compared to $980 million a year ago, while its revenues in the Middle East and Asia decreased to $1.26 billion, compared to $1.45 billion in the same period last year.
The company expected that the increase in logistics costs and ongoing challenges in supply chains would affect its operations, and its activity in the Middle East was likely to decrease during the fourth quarter compared to the third quarter.
Regarding its future expectations, Baker Hughes kept its overall revenue expectations unchanged, but it reduced its expectations for the annual revenues of Chart, which specializes in industrial equipment, which it acquired last July for $13.6 billion, to $1.99 billion, from $2.05 billion previously. It attributed this to the timing of the delivery of liquefied natural gas equipment and weak demand for hydrogen.
During a conference call to discuss third-quarter results, the company expected global spending on oil and gas exploration and production activities to remain largely stable on an annual basis, with spending prospects improving in 2027. It also indicated that global capacity for liquefied natural gas production could reach 800 million tons annually by 2030.
In the Middle East, Baker Hughes expected a decline in oil and gas field services activity during the fourth quarter compared to the third quarter, in addition to a slight decline in the activity of the energy solutions and technology sector.
The company's CEO, Lorenzo Simonelli, said that Baker Hughes has observed a tangible improvement in the Middle East, and expects additional opportunities as customers increase their focus on maximizing extraction rates and extending the operational life of assets. He added that rebuilding the infrastructure in the region may provide opportunities to expand and modernize gas and electricity facilities.
For his part, James West, an analyst at Melius Research, said that the company’s expectations are in line with estimates of continued improvement in the global markets for oil field services and energy during the year 2027.
Baker Hughes shares fell by more than 1 percent in trading after the market closed.
