The Woodside Energy Group Ltd (ASX: WDS) share price bucked the wider selling pressure on Monday.
Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed Friday trading for $33.74. Woodside shares closed on Monday trading for $33.77 apiece, up 0.09%.
Meantime, the ASX 200 finished down 0.29%.
As you can see in the above chart, the Woodside share price is now up 8% over the past 12 months.
But that doesn't include the $3.75 per share in fully franked dividends the gas stock has paid out over the full year. With those dividends included, Woodside shares are up an accumulated 20%.
Now, here's why that strong performance could endure for "decades to come".
Image source: Getty Images
Why could the Woodside share price continue outperforming?
Until Russia's invasion of Ukraine last year, many analysts were labelling oil and gas stocks as tomorrow's stranded assets.
That, as you likely know, is due to the carbon emissions that come with burning natural gas. Atop that concern is methane emissions, a byproduct of LNG production. Methane is a much larger heat trap than CO2, of concern in a world working to contain global warming.
Gas producers the world over are working to tackle their methane emissions. And the longer-term outlook for the Woodside share price has gotten brighter since those 'stranded asset' days.
This comes as analysts are broadly beginning to acknowledge the world will need a lot more gas than previously forecast in the long march towards the sustainable energy transition.
Major new gas project in the pipeline
Indeed, major energy companies across the world including Shell and Chevron are investing billions of dollars in new gas projects. Shell expects to spend an all-time high US$5 billion on new gas investments this year. The company plans similar cap-ex on gas development through to 2025.
The offshore Scarborough gas project counts as Woodside's biggest project at the moment. But it's unlikely to be its last.
Since Russia's invasion of Ukraine, the International Energy Agency reports that some 60 billion cubic metres of new gas production capacity has been approved. That's almost twice the rate of new gas production approved over the past 10 years.
And, as Bloomberg reports, new gas projects underway in the United States could soon see the nation take the mantle as the world's top gas exporter.
In another positive sign for the long-term outlook for the Woodside share price, there looks to be no shortage of demand from Asian and European nations eager to secure their energy security.
According to senior fellow with the US think tank Center for Strategic and International Studies Ben Cahill, "LNG sellers look around this market and feel pretty confident that gas demand will be with us for decades to come."
Shell CEO Wael Sawan concurs (as quoted by Bloomberg):
Liquefied natural gas will play an even bigger role in the energy system of the future than it plays today. LNG can be easily transported to places where it is needed most. And what's more, on average, natural gas emits about 50% less carbon emissions than coal when used to produce electricity.
The Woodside share price is also well-positioned to benefit from this increased role of gas.
On the company website, Woodside CEO Meg O'Neill notes:
Woodside is well placed to be a part of the global energy transition. Our gas can help reduce emissions, displacing more intensive energy sources such as coal and biomass, while enabling customers to deliver affordable energy and climate action.
