Grew LNG portfolio by 20% to 23 million mt in 2023
Reiterates target of growing LNG portfolio to 2025
Cold winter snaps can change position on gas: CEO
BP CEO Murray Auchincloss said Feb. 6 he would be “surprised” if the company did not beat its target of growing its LNG supply portfolio to 25 million mt/year by 2025 having already built out the business to 23 million mt last year.
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On a fourth-quarter results call with analysts, Auchincloss said its LNG supply portfolio increased by 20% year on year in 2023, driven by volumes from the Coral LNG facility in Mozambique and the US Freeport export terminal.
He said BP also delivered 10 million mt of incremental short- and mid-term merchant volumes.
“On LNG build-out, we’re 23 [million mt] in [20]23,” Auchincloss said, adding that a portfolio of 25 million mt/year in 2025 remained the company’s target.
But, he said: “I’d be surprised if we’re not higher than that.”
Auchincloss said BP was expecting new LNG volumes to come from Venture Global in the US, its own Greater Tortue Ahmeyim project offshore Senegal and Mauritania, and from Beach Energy’s LNG project in Australia.
“We expect to get additional volumes from Venture, Tortue and Beach. So that’s why we feel very comfortable with 25 [million mt/year] in [20]25,” he said.
BP has an offtake agreement with the Venture Global for LNG volumes from the Calcasieu Pass terminal, but the two are in dispute over the start date of commercial deliveries to long-term offtakers from the plant.
Auchincloss said BP remained in commercial dispute with Venture, but added: “I’m not going to get into any details on it other than to say that we will enforce our rights vigorously.”
BP is operator of the Greater Tortue Ahmeyim LNG project whose startup had been targeted for the first quarter of 2024.
Auchincloss made no other mention of progress on the project on Feb. 6, though project partner Kosmos has warned previously the startup could slip into Q2 2024.
Recent media reports have suggested it could even be pushed back into Q3. BP’s press office could not be reached for comment Feb. 6.
Oman, Canada offtake
Further out, BP has also agreed a number of recent LNG offtake deals for delivery in the second half of the 2020s.
They include a deal with Oman LNG for 1 million mt/year from 2026 and an agreement with Woodfibre LNG in Canada — expected to start up in 2027 — for an additional 0.45 million mt/year of LNG.
The Woodfibre LNG deal from September 2023 brings BP’s total firm offtake from the project to 1.95 million mt/year. BP will take the remaining 0.15 million mt/year of LNG from the project on a flexible basis.
Auchincloss said an LNG portfolio of 28 million mt/year by 2030 was already underpinned.
“I think 28 by 30 is already underpinned as well by a couple of contracts we’ve done in Oman and in Canada — Woodfibre,” he said.
“So you can already see those coming into the portfolio. So you’ve got a bigger LNG portfolio to take advantage of,” he said.
Winter gas
More generally on gas, Auchincloss said the world remained “volatile” with BP’s trading business set up to handle volatile markets.
“Natural gas, we feel OK about right now but a cold snap in the winter in one of the years changes the position on natural gas as well,” he said.
“So my own sense is that the world is quite volatile. And our trading business is set up to manage volatility and do well in a volatile time frame.”
Spot LNG prices have come down from their record levels from 2022, but remain relatively high.
Platts, part of S&P Global Commodity Insights, assessed the benchmark JKM price for delivery into Northeast Asia on Feb. 6 at $9.46/MMBtu, compared with an all-time high of $84.76/MMBtu in March 2022.