The West Australian producer has among the highest exposure to spot LNG and will benefit in the short term, with spot LNG forecast to trade at $US8 ($10.40) per million British thermal units in 2021 and $US9.50/mmbtu in 2022, more than double 2020 prices of $US4.20/mmbtu.“Is LNG the bitcoin of energy? LNG prices have increased from $US2 to over $US20/mmbtu on a cold winter with temperatures in Beijing dropping to a 50-year low,” Bernstein analyst Neil Beveridge said. “But the seasonal trade could give way to a more structural trade, given the lack of new supply which will reach the market. Companies exposed to spot LNG and international gas prices will benefit.”LNG prices in Asia have soared to an all-time record above $US20/mmbtu with a cold snap sparking a battle among the world’s biggest gas buyers to secure supplies, potentially delivering a windfall for Australian gas producers. The bull run will subside but companies including Woodside, Oil Search and Santos are well placed to cash in.“The tightening of LNG markets has been simply breathtaking and a sharp reminder for any commodity investors of how quickly things can change,” Mr Beveridge said.“In our view this is clearly seasonal, but there are also some structural elements to it which cause us to believe that LNG prices could be much firmer in the next few years.”Limited new supply coming on in the next few years will support LNG prices over the medium term, according to Bernstein. “After 30 million tonnes a year of new LNG supply additions over the past four years, we expect only 10-15 million tonnes a year of new supply coming on to the market over the next four years (which is 3-5 per cent of annual demand). “In addition, disruption to Gorgon, Prelude and other LNG supply projects has resulted in a shortfall of physical LNG supply to the market,” Mr Beveridge said.The rising LNG price is a sharp turnaround in fortune for Woodside, which in October last year cut 300 jobs, or 8 per cent of its workforce, after an oil price rout forced it to delay projects and trim spending. The higher prices also come as Woodside searches for a new chief executive after the surprise exit of Peter Coleman, announced late last year. Santos boss Kevin Gallagher has been named an early favourite to replace Mr Coleman, with other names including Shell’s Zoe Yujnovich, BHP’s Geraldine Slattery, BP’s William Lin and ExxonMobil’s Andrew Barry.Woodside’s VP development and marketing Meg O‘Neill is seen as the leading internal candidate alongside chief financial officer Sherry Duhe and chief technology officer Shaun ­Gregory. The group’s shares closed up 2.6 per cent on Monday at $25.46.



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