Under the terms of the agreement, Woodside will deliver approximately 600,000 tons of LNG annually to China on a delivered basis for 15 years, beginning in 2027, the company announced on Monday.
This development coincides with Chinese firms showing reluctance to increase gas imports from the U.S., the world’s largest LNG exporter, following Beijing’s recent imposition of tariffs on U.S. fuel.
Mark Abbotsford, Woodside’s Executive Vice President and Chief Commercial Officer, highlighted the significance of the deal, stating, “This is the first time Woodside, operating independently, has secured a long-term LNG sales agreement with a Chinese customer.” He also noted that this marks China Resources’ first 15-year LNG procurement contract.
The agreement reflects a thawing of relations between Canberra and Beijing, which had reached a low point in 2020 when former Australian Prime Minister Scott Morrison called for an independent investigation into the origins of COVID-19.
This move had prompted Chinese companies to temporarily suspend plans to purchase additional Australian fuel. Tensions were further exacerbated in 2021 when Beijing imposed tariffs on Australian wine and restricted imports of coal, metals, and agricultural products. However, these tariffs were lifted three years later, signaling a gradual improvement in bilateral ties.
China Resources, one of China’s largest city gas distributors, is currently constructing its Rudong LNG terminal in Jiangsu province. The facility is expected to become operational by early 2026, aligning with the timeline of the new LNG supply agreement.
This deal underscores the growing energy collaboration between the two nations amid shifting global trade dynamics.