Australia’s Woodside Energy is boosting its U.S. exposure with a formal commitment to develop the $17.5 billion first stage of a world-class liquefied natural gas (LNG) project in Louisiana.
Originally called the Driftwood project when owned by New York-listed Tellurian the LNG project was stalled for several years until acquired by Woodside last July for $900 million.
A liquified natural gas transport ship docked in the Calcasieu River near Cameron, Louisiana. Jon … More
The appeal of the renamed Louisiana LNG development is the full government permitting obtained by Tellurian for up to five LNG production trains with a notional capacity of 27.5 million tons of LNG a year.
The first stage, which received Woodside board approval earlier today, is for three trains producing 16.5m/t a year.
U.S. politicians seized on the announcement as validation of the energy policies of the country’s president Donald Trump.
Louisiana Governor Jeff Landry said Woodside’s decision to develop its first LNG project in the U.S. was the biggest single foreign direct Invesment in his State’s history.
U.S. President Donald Trump looks on as Louisiana Governor Jeff Landry speaks at an investment … More
Woodside already operates LNG assets in Australia, including the original project, the North West Shelf. It is also is in the final stages of building the Scarborough project and plans to soon start construction of the Browse project, when it gets final government approval.
The chief executive of Woodside, Meg O’Neill, said Louisiana LNG was “a game changer for Woodside”, which would position her company as a global LNG powerhouse.
“This world-class project is a compelling and de-risked investment,” O’Neill said.
“It leverages Woodside’s proven strengths in project execution, operational excellence, marketing and customer relationships to offer significant cash generation and drive long-term shareholder value.”
Critical Time for Woodside
The decision to proceed with construction of Louisiana LNG comes at a critical time for Woodside as it waits for approval to build the long-delayed Browse project which has been a political lightning rod ahead of Australia’s national election on Saturday, followed by the company’s annual meeting next week.
Woodside has sold down an interest in the infrastructure associated with the LNG project to Stonepeak, a New York-based infrastructure investment specialist, which will provide $5.7 billion towards the project’s capital coast.
O’Neill said that adding Louisiana LNG to Woodside’s established LNG business provided the company with a balanced and resilient portfolio.
Meg O’Neill, speaking at the CERAWeek oil and gas conference in Houston. Photographer: Aaron M. … More
“The project benefits from access to abundant low-cost gas resources in the U.S. and boasts an asset lifespan of more than 40 years,” she said.
“The marketing opportunities Louisiana LNG offers across the Pacific and Atlantic basins leverages Woodside’s proven LNG marketing capabilities and complements our established position in Asia.
Investors have been expecting a formal development commitment for Louisiana LNG with the company’s share barely moving after today’s announcement to trade around A$20.44.
