Australia's Woodside Petroleum Ltd. has signed an agreement with Commonwealth LNG on Jan. 19 to negotiate a deal to secure LNG supply from its proposed liquefaction plant in Louisiana.

The agreement contemplates the purchase by Woodside of 2 million tonnes per annum (MTPA) of LNG over a period of 20 years, scheduled to begin in the second quarter 2026, with an option to buy an additional 0.5 MTPA, the Australian oil and gas major said.

Financial approval of Commonwealth's proposed 8.4 MTPA terminal on the U.S. Gulf Coast is scheduled for the first quarter of 2022, after a year-long delay due to a drop in energy demand, with initial output scheduled for mid-2025.

"This HOA (heads of agreement) with Commonwealth secures access to competitive LNG in the Atlantic Basin and provides Woodside with the ability to build market scale through acquiring low cost supply," Woodside CEO Meg O'Neill said.