Natural gas demand has not slowed, and that’s helping to grease the skids for export contracts, ExxonMobil CEO Darren Woods said Wednesday.
During a webcast to discuss capital spending and projected plans, Woods was asked about the company’s opportunities in the global LNG export market. The integrated major is a partner in several big gas projects.
Has it become more difficult to secure LNG customers with the plethora of competing projects in the queue?
“You know, it’s interesting, I think, that since the Russian invasion of Ukraine, we’ve seen a much greater recognition around the world of the importance of LNG in many countries,” Woods said.
“I’d say there’s a very much stronger desire to lock in long-term energy commitments. And we’re using that in the work that we’re doing.”
ExxonMobil’s Golden Pass export facility, now underway on the Texas coast, was set to begin operations before the end of 2024. However, the company disclosed Wednesday that the schedule has been revised. Golden Pass is now set to be “mechanically complete” by the end of 2024, with first exports in the first half of 2025.
That hews closer to the timeline suggested by Chief Commercial Officer Jeff Hammad in October. Speaking at the Gulf Coast Energy Forum, Hammad said Golden Pass was “still targeting” initial startup “for the latter half of 2024, and we will do whatever we can to meet that schedule.”
Golden Pass is a joint venture with QatarEnergy, which holds a 70% stake in the project. ExxonMobil holds a 30% interest.
ExxonMobil also is partnering in projects that are progressing in Mozambique, Papua New Guinea (PNG) and QatarEnergy’s North Field expansion.
There are “still a lot of customers out there who are looking to sign long-term contracts,” Woods told analysts. “We’re using that to back up the projects that we’re developing…We’re growing our equity portfolio of LNG,” with the expectation “that we'll have roughly 80% of that under long-term contracts.”
The company wants to maintain “roughly 20%” of its LNG sales to the spot market. So far so good, as ExxonMobil has continued to have “the ability to maintain that kind of balance in our portfolio.”
Where Do I Sign?
There remains “a very healthy appetite” for contracts,” the CEO said. On that front, “we’re not challenged…in signing up agreements for the LNG that we’re looking to bring on with these projects.”
As far as operational issues, the Mozambique development “is still in force majeure,” Woods noted. A “critical milestone” will be to establish “adequate security” for the project and the workforce.
To that end, ExxonMobil is working with partner TotalEnergies SE to resolve the security issues. Woods said he has confidence they can be addressed.
“The good news in Mozambique is we’ve used the time associated with the force majeure to continue to develop that project, enhance it and optimize it. So we feel really good about the ability to bring on a very competitive source of LNG…”
For PNG, pre-development activity continues.
“One of the key challenges is making sure that we’ve got a project concept that is very cost competitive, from a cost-to-supply standpoint,” Woods said of PNG. “All the partners are getting their financing set up. I think that’s going through what I would characterize as the ‘normal’ project development process…
“We don’t see anything getting in the way of that timeline…So PNG looks pretty solid in terms of going forward at this stage. And in Mozambique, our expectation is that we’ll see that move…early next year.”
Meanwhile, Venture Global LNG Inc. told Reuters Wednesday that its Plaquemines LNG project under construction in Louisiana could take 24 months to commission when it starts up next year.
The company has had a prolonged commissioning at its Calcasieu Pass LNG terminal, which has delayed cargoes for long-term contract holders. CEO Michael Sabel told the news agency that Plaquemines’ customers would likely start receiving cargoes in 2026 at the earliest.
Venture Global’s Calcasieu Pass terminal loaded its first commissioning cargo early last year. However, due to equipment problems, it has yet to declare that the facility is complete and commercially operable, which would require it to begin supplying cargoes to its long-term offtakers.
Venture Global has said the commissioning process at Calcasieu Pass will take 36 months in all. The company expects it to end late next year, when cargoes would finally be delivered to long-term customers, some of which are in arbitration proceedings to get shipments sooner.
