Woodside (ASX: WPL) share price sinks 5% regardless of new deal

The Woodside Petroleum Limited (ASX: WPL) share price is sinking today despite the business announcing a supply contract for liquefied gas (LNG).

At the time of writing, the Woodside share cost is down 5.45% to $23.96.

Let’& rsquo; s take a closer look at what Woodside revealed.

LNG supply agreement

Woodside advised it has gotten in a sale and purchase agreement with RWE Supply & & Trading GmbH (RWE). The agreement will take advantage of Woodside’& rsquo; s worldwide energy portfolio to provide roughly 0.84 tonnes per year of LNG.

This offer extends the working relationship between both celebrations, developed through mid-term and spot service offers in Asia-Pacific and the Atlantic basin.

RWE will utilize the supply of LNG to service the strong need from its customer base.

The agreement will start in 2025 and last for a duration of 7 years. Woodside stated the agreement was not subject to a last financial investment choice (FID) on any of its tasks.

Today’& rsquo; s release also kept in mind that Woodside and RWE signed a memorandum of understanding (MOU) in October last year. The file is based upon pursuing mutually useful hydrogen-related opportunities.

Hydrogen is anticipated to become significantly embraced in future as it is a carbon-neutral fuel. Currently, RWE is advancing the advancement of about 30 hydrogen projects, primarily situated in Europe.

What did management state?

Talking about the offer, Woodside executive vice president Meg O’& rsquo; Neill said:

Customers are progressively seeking to protect brand-new energy supplies in a timeframe which supports the advancement of our Scarborough offshore gas resource and the expansion of the Pluto facility with the addition of a 2nd LNG production train.

This arrangement with RWE is another demonstration of the momentum we are collecting ahead of our targeted FID on Scarborough and Pluto Train 2 in the second half of this year. The SPA also provides the opportunity for Woodside and RWE to explore the potential for carbon-neutral LNG production and trading.

RWE primary business officer Andree Stracke included:

RWE is delighted to participate in a longer-term LNG supply contract with Woodside which even more strengthens the strong relationship we have developed together over the ins 2015. The volumes will continue to enable us to deliver effective LNG options to our customers and will offer a platform to further advance our existing organization in Asia.

Woodside share price performance

The Woodside share price is down 27% over the last 12 months however up nearly 7% year-to-date. The business’& rsquo; s shares dived to $14.93 when COVID-19 put the global economy at a dead stop. Nevertheless, its shares have gradually rebounded, especially of late.

Based on the present Woodside share rate, the company has a market capitalisation of approximately $23.3 billion.

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