The tariff war that President Trump started earlier this year could affect the Louisiana LNG project, its majority owner, Woodside Energy, has warned.
The Australian energy major’s CEO, Meg O’Neill said in a quarterly update today that “Around 25% of Louisiana LNG’s estimated capital expenditure is equipment and materials, approximately half of which is currently expected to be sourced from the U.S.” This means the other half would be imports and tariffs could interfere with the company’s plans for the facility.
“If energy prices come under further pressure as a result of tariff-related growth pressures, it could make things trickier for Woodside down the track,” the chief market analyst of KCM Trade Global told Reuters in comments on the news.
Woodside bought the former Driftwood LNG project as part of its acquisition of Tellurian for $1.2 billion. The deal “adds a scalable US LNG development opportunity to our existing approximately 10 Mtpa of equity LNG in Australia,” Woodside chief executive Meg O’Neill said at the time. Then, this year, reports emerged that Woodside was looking for partners in the projects, seeking to sell up to 50% of the ownership.
Woodside needs partners to shoulder part of the costs for the development of the first phase of Louisiana LNG, estimated at $16 billion. This first phase will have an annual production capacity of 11 million tons of liquefied natural gas. Upon completion of all four phases, Louisiana LNG should have a total capacity of 27.6 million tons of the superchilled commodity.
Earlier this month, the Australian company sold a 40% stake in Louisiana LNG to New York-based infrastructure investment firm Stonepeak for $5.7 billion. Under the deal, Stonepeak will cover 75% of capital expenditure for 2025 and 2026, helping Woodside preserve cash flow while still advancing a major foothold in the booming U.S. LNG market. The total forward cost for the foundation phase is expected to be between $900 and $960 per tonne, excluding pipeline infrastructure.
By Irina Slav for Oilprice.com
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