The Woodside Petroleum Limited (ASX: WPL) share price is struggling today despite its plan to supply gas to Australia's east coast.
The company has entered a memorandum of understanding with Viva Energy Group Ltd (ASX: VEA).
The understanding could see Woodside shipping gas from its Western Australia projects using Viva Energy's planned LNG regasification Victorian terminal.
At the time of writing, the Woodside share price is $22.25, 0.67% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) has been wobbling today.
Let's take a closer look at the energy giant's plan for the east coast.
Image source: Getty Images
Woodside share price slips despite east coast push
It's a rough day for the Woodside share price despite the company's potential partner announcing the pair's plans.
Viva Energy announced its exclusive discussions with Woodside to progress a capacity rights agreement at Viva Energy's proposed Gas Terminal Project.
The terminal could enable Woodside to supply and regasify LNG to Australia's eastern states.
According to Viva Energy, the Australian Energy Market Operator believes that a gas shortfall could emerge in Victoria as early as 2023.
Viva Energy is expecting to make a final investment decision on the terminal in the third quarter of 2022. It's planning to build the terminal in Geelong.
Viva Energy CEO Scott Wyatt said that Woodside's use of the terminal could see it forming "virtual pipelines", delivering LNG to the east coast domestic market. He stated:
This can be achieved more efficiently and with lower environmental impact than building new pipeline infrastructure to transport gas from other domestic gas sources to the east coast Australian gas market…
Woodside's experience and capability in LNG supply, shipping, terminals, and international gas markets will assist us in progressing the Gas Terminal Project to a final investment decision.
Woodside CEO also commented on the news, saying:
Our [memorandum of understanding] with Viva Energy presents an opportunity for Woodside to supply reliable, cost-competitive LNG from our Western Australian projects and global portfolio into the east coast gas market, which is predicted to face a shortfall in coming years.
Today's drop included, the Woodside share price is 2% lower than it was at the start of 2021. It has also fallen 4% over the last 30 days.
