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During Woodside’s first-half earnings call on Tuesday, O’Neill was asked to give an update on plans to lease or own carriers to support the Louisiana LNG delivered cargoes.
“So philosophically, we think there are other companies that are well-equipped and well-suited to own LNG carriers,” she said.
“When we started up North West Shelf, there were some project-owned vessels, but we’ve moved away from that, and that’s probably the industry standard to use leased vessels,” O’Neill said.
“The number of vessels, the balance sheet exposure is something that we’re working through as we speak, so too early to advise, but as we progress that work and progress those contracts, we will certainly keep the market updated,” O’Neill said.
In April, Woodside made a final investment decision to develop the three-train, 16.5 mtpa Louisiana LNG project.
The total capital expenditure for the LNG project, pipeline, and management reserve is $17.5 billion.
Woodside said that the development has expansion capacity for two additional LNG trains and is fully permitted for a total capacity of 27.6 mtpa.
“Strong momentum”
“Following FID in April, we have maintained strong momentum on the project as we target first LNG in 2029,” O’Neill said.
She said that construction of Train 1 is 22 percent complete, and Woodisde is targeting first structural steel on site by the end of this year.
Bechtel is the engineering, procurement, and construction contractor, under a lump sum, turnkey agreement, while the facility utilizes Chart’s liquefaction technology and Baker Hughes gas turbines.
In June, Woodside completed the previously announced sell-down of a 40 percent stake in its Louisiana LNG project to US private equity firm Stonepeak.
In addition to Stonepeak, Woodside also signed a non-binding collaboration agreement with Saudi Arabia’s energy behemoth Aramco to explore global opportunities.
This includes Aramco’s potential acquisition of an equity interest in and LNG offtake from the Louisiana LNG project.
Eight million tonnes
During the call, O’Neill also answered what the targeted split is for Woodside’s equity share of LNG, on a contracted vs spot basis.
“The FID we’ve taken for the first three trains is 16.5 million tonnes. We want to keep about eight million tonnes of that in our portfolio, but we will on-sell a good portion of that,” she said.
“How much we on-sell and the contracting structure, actually we have quite a bit of flexibility. As you would have seen from our announcements in the half, we’ve done LNG offtake agreements with China Resources, with Uniper,” O’Neill said.
She noted that one of the Uniper agreements was direct from Louisiana LNG.
“I would call that in the 8 million tonnes that’s not for our accounts. So, we do have quite a bit of flexibility in our LNG marketing, really to work closely with customers to understand what do they need and to negotiate outcomes that work for both players,” she said.
