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Under the transaction, Stonepeak will provide $5.7 billion towards the expected capital expenditure for the foundation development of Louisiana LNG on an accelerated basis, contributing 75 percent of project capital expenditure in both 2025 and 2026, according to a Woodside statement.
Stonepeak has about $72 billion of assets under management, including LNG carrier owner Seapeak, following the $6.2 deal in 2022.
Woodside said in the statement the transaction provides validation of Louisiana LNG project quality and increases attractiveness of the project to other potential equity partners.
“The transaction significantly reduces Woodside’s capital expenditure profile and is a material step towards readiness for a final investment decision,” the company said.
In October 2024, Woodside acquired all issued and outstanding Tellurian common stock for about $900 million cash, or $1.00 per share. The implied enterprise value is about $1.2 billion.
Woodside also renamed Tellurian’s Driftwood LNG project Woodside Louisiana LNG.
In December 2024, Woodside signed a revised engineering, procurement, and construction (EPC) contract with US engineering and construction firm Bechtel for the Louisiana LNG export project.
The lump sum turnkey deal is for the three-train 16.5 million tonnes per annum foundation development of Louisiana LNG.
Woodside said total Louisiana LNG expenditure from December 2024 to the end of the first quarter of 2025 is forecast to be up to $1.3 billion, which is included in the overall estimated cost for the foundation development.
Additional partners
Woodside CEO Meg O’Neill recently said that Woodside is in “well advanced” negotiations with “high-quality counterparts” to sell up to 50 percent of its Louisiana LNG project.
“We are very pleased to have Stonepeak join us in Louisiana LNG, given their demonstrated track record investing in US gas and LNG infrastructure across LNG facilities, LNG carriers, and floating storage and regasification units,” O’Neill said on Monday.
“This transaction further confirms Louisiana LNG’s position as a globally attractive investment set to deliver long-term value to our shareholders. It is the result of a highly competitive process that attracted leading global counterparties and significantly reduces Woodside’s capital expenditure for this world-class project,” she said.
O’Neill said the partnership with Stonepeak, together with the lump sum turnkey EPC agreement with Bechtel and existing regulatory permits, “give us confidence to progress at pace towards a final investment decision on Louisiana LNG.”
“We are pleased with the strong level of interest from counterparties and customers in Louisiana LNG. We will continue advancing discussions with additional potential partners targeting an equity sell-down of around 50 percent in the integrated project. As we have demonstrated with our Scarborough and Pluto Train 2 project in Australia, the addition of an infrastructure partner unlocks value and paves the way for other strategic equity partners,” she said.
Transaction details
Under the deal, Stonepeak will hold 40 percent equity in Louisiana LNG Infrastructure LLC (InfraCo), with the remaining 60 percent of InfraCo owned by Louisiana LNG LLC (HoldCo), the holding company operated by Woodside.
Woodside explained that InfraCo holds the Bechtel EPC agreement and, subject to FID, will own and construct the liquefaction infrastructure and the common user facilities.
InfraCo is operated by Woodside.
Woodside said this investment in InfraCo is supported by a long-term liquefaction tolling agreement between InfraCo and HoldCo with “competitive” tolling fee terms.
HoldCo will be responsible for gas supply and LNG offtake.
Stonepeak will provide $5.7 billion towards the expected capital expenditure for the development of the three train 16.5 mtpa foundation development of Louisiana LNG from the effective date of January 1, 2025.
Stonepeak’s contribution to the project capital expenditure will be accelerated in both 2025 and 2026, representing 75 percent of the total expected capital expenditure in those years.
As a result, their total capital contribution of $5.7 billion will be lower than their nominal 40 percent equity interest in InfraCo, given the time value of money adjustment associated with the acceleration, Woodside said.
In the event of a cost overrun, HoldCo will contribute the incremental capital.
Woodside said this provides capex certainty for Stonepeak and the ability for Holdco to benefit from capex efficiencies.
Moreover, the estimated forward cost for the foundation development of Louisiana LNG from December 2024 remains $900-960/tonne.
This includes EPC costs, contractor completion incentive payments, owner’s costs, allowances, and contingency. It excludes pipeline cost and HoldCo costs and contingency.
Closing of the deal expected in Q2
Woodside said completion of the transaction is subject to conditions precedent including FID for the Louisiana LNG development, requisite regulatory, legal, and other customary approvals.
The closing of the transaction is targeted in the second quarter of 2025.
On completion, a payment of approximately $2 billion is anticipated for Stonepeak’s share of capex funding incurred since the effective date, Woodside said.