Woodside Energy has announced the final investment decision for the Louisiana LNG project and plans to start production in 2029.
The facility is designed to have three liquefaction trains with a total capacity of 16.5 million tons annually. This would boost Woodside’s total LNG capacity to 24 million tons annually by next decade, the company said. Woodside also has permits to expand the Louisiana LNG facility by another two trains, which would boost its capacity to a total 27.6 million tons annually.
Woodside bought the former Driftwood LNG project as part of its acquisition of Tellurian for $1.2 billion last year. 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.
Indeed, earlier this month the news broke that Woodside had sold 40% in Louisiana LNG to infrastructure investment firm Stonepeak. Under the terms of their deal, Stonepeak will provide $5.7 billion of the total capital expenditure for the project, accounting for 75% of total capex for the project this year and next.
The entry of a partner in the project boosts Louisiana LNG’s economics and Woodside’s cash flow profile, said the Australian energy giant said. The price tag for the facility has been calculated at $17.5 billion. With Stonepeak’s entry into the project, Woodside’s share of that tag has declined to $11.8 billion.
Per its operator, the Louisiana LNG facility will generate some $2 billion annually in net operating cash once it enters full-scale operation. “It will drive Woodside’s next chapter of value creation, giving the company’s global portfolio the potential to generate over $8 billion of annual net operating cash in the 2030s,” the company said.
By Irina Slav for Oilprice.com
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