ADNOC Moves on Australian LNG Assets as Cyclone Disrupts Woodside's Output

ADNOC Moves on Australian LNG Assets as Cyclone Disrupts Woodside's Output A $18.7bn bid for Santos and storm-driven production halts at Woodside's western Australian terminals frame a global LNG market tighter than it has been in years. Abu Dhabi's XRG-led consortium tabled a non-binding $18.72 billion cash offer for Santos on Monday (2026-05-18), sending the Australian oil and gas producer's shares up as much as 15.23% — their biggest intraday jump since April 2020, LSEG data show. The offer price of $5.76 per share represented a 27.73% premium to Santos's Friday (2026-05-15) close of AU$6.96.³ The bid landed in a market that was already assigning fresh value to Australian LNG supply. Three days later, a tropical cyclone struck western Australia and temporarily halted production at the country's largest LNG export sites, Montel reported in the week of May 21 (2026-05-21). The timing was coincidental. The logic behind both events was not.^3,1 XRG has an enterprise value above $80 billion and described its acquisition focus as natural gas, chemicals, and lower-carbon energy solutions. Australia's LNG export infrastructure — concentrated in western Australian terminals that also underpin long-term contracted volumes to northeast Asia — is precisely the kind of strategic asset Abu Dhabi is after as it extends its energy footprint beyond crude oil.³ Woodside Energy operates western Australia's largest LNG complexes. The cyclone disruption fell on its doorstep. While Montel's reporting described the halt as temporary, any unplanned curtailment at this scale removes spot cargoes from a market where there are few short-notice alternatives. Qatar, the other major Pacific basin LNG supplier, has been losing output to the Middle East conflict.¹ No close substitute exists for Australian LNG in a tight spot market. That is what the ADNOC bid for Santos — Woodside's nearest Australian peer — is ultimately pricing in. A premium above 27% offered by a state-backed entity with $80 billion in enterprise value is a direct read on what Gulf capital thinks Australian gas supply infrastructure is worth right now.³ The Atlantic basin tells a different story about where supply growth is coming from at a longer horizon. South America is the world's fastest-growing oil region, the Economist reported, with Brazil at the centre of the shift. Rystad Energy forecasts Brazilian crude production will surge 10% to above 3.7 million barrels per day. Petrobras holds the dominant position in Brazil's deepwater offshore, and the build-out is supported by infrastructure: a pipeline project due online in 2027 will carry some 700,000 b/d to the Atlantic coast for export.² A separate South American play — fast-developing offshore fields expanding at a pace consistent with Guyana's trajectory — has been moving faster still. Production there jumped 26% year-on-year in the first quarter of 2025, with Rystad projecting a further 12% rise to around 690,000 b/d, scaling toward 1.2 million b/d by 2030. BP's new deepwater discovery in Brazil reinforces the signal that the South Atlantic is now the frontier of choice for international majors.² Brazilian crude growth addresses a different commodity and a different buyer set than Australian LNG. But the supply logic points the same direction: outside the Middle East, the two most consequential growth areas in global energy are South American deepwater oil and Pacific-facing LNG. Abu Dhabi, through XRG, is positioning itself in both.^3,2 For LNG traders, the immediate variable is how quickly Woodside restores full production after the cyclone disruption — and whether any northeast Asian buyer left short during the outage has had to reprice Q3 cargo cover at a spread that reflects just how thin the market had become.¹