Feb. 15 (UPI) -- China is of particular interest as a client for liquefied natural gas because of strong demand and clean economic ambitions, Australia's Woodside said.
Woodside reported a net profit after tax of nearly $80 million, an 18 percent improvement over 2017. Free cash flow increased to $660 million and the company said its break-even point was well below the current price of oil, which was around $64 per barrel for the global benchmark, Brent, early Thursday.
The first cargo of liquefied natural gas from the flagship Wheatstone project in Australia was planned shortly after production started in October. The Wheatstone consortium includes the Kuwait Foreign Petroleum Exploration Co., Woodside Petroleum and Chevron.
Drawing on a global portfolio, Woodside said it executed sales and purchase agreements for more than a dozen cargoes of LNG for delivery between 2017 and 2019.
At its peak, the facility will supply nearly 9 million tons of super-cooled gas every year to the emerging and energy-hungry economies of Asia. The facility is located in the state of Western Australia about 7 miles away from the Wheatstone and Iago natural gas fields.
Briefing investors on full-year 2017 results, Woodside CEO Peter Coleman said the second train, a liquefaction and purification facility, is expected online by the middle of the year with gas flows expected by the third quarter.
Production, meanwhile, is anticipated across its global portfolio, a footprint it expanded this week when it acquired a 50 percent stake in the Scarborough gas field off the coast of Western Australian in a deal with Exxon Mobil.
"Robust demand growth from Asia and low investment in new supply have created an opportunity to develop the most competitive LNG projects and deliver significant returns to shareholders," Coleman said. "China is of particular interest, because it is forecast to grow at a compound annual growth rate of 7 percent until 2025, and is taking radical steps to reduce air pollution by moving to cleaner fuels such as gas."
China, the second-largest economy in the world behind the United States, reported in January that gross domestic product expanded 6.9 percent from 2016, beating expectations by about 0.2 percent. According to the National Bureau of Statistics, it's the first time annual growth has improved in seven years.
Fatih Birol, the head of the International Energy Agency, told the U.S. Senate last month China is winning in terms of the pace of renewable energy development. By 2040, China will have 30 percent of the new wind and solar power capacity and 40 percent of the global investment in electric vehicles.
China became the world's No. 1 importer of petroleum and other products five years ago. Oil demand from China in November, the last full month for which data are available, was 9 million barrels per day -- the second highest on record.