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Woodside announced the decision in a statement on Tuesday, saying that the company is targeting its first LNG in 2029.
Development of Louisiana LNG will position Woodside as a “global LNG powerhouse”, enabling the company to deliver approximately 24 mtpa from its global LNG portfolio in the 2030s, and operating over 5 percent of global LNG supply, it said.
Woodside noted that the development has expansion capacity for two additional LNG trains and is fully permitted for a total capacity of 27.6 mtpa.
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 was for the three-train 16.5 mtpa 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.
$17.5 billion
Woodside said that Louisiana LNG represents a “compelling” investment that will deliver “significant” cash flow and create long-term value for Woodside shareholders.
It exceeds Woodside’s capital allocation targets, delivering an internal rate of return (IRR) above 13 percent and a payback period of seven years.
At full capacity, the foundation project is expected to generate about $2 billion of annual net
operating cash in the 2030s, according to Woodside.
“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 firm said.
Woodside said the forecast total capital expenditure for the LNG project, pipeline, and management reserve is $17.5 billion (100%).
US private equity firm Stonepeak, as an investor in Louisiana LNG Infrastructure LLC, will provide $5.7 billion towards the expected capital expenditure for the LNG project on an accelerated basis, contributing 75 percent of capital expenditure in both 2025 and 2026, Woodside said.
Earlier this month, Woodside agreed to sell 40 percent of its Louisiana LNG project to Stonepeak.
Woodside’s share of the forecast total capital expenditure is $11.8 billion.
“Historic moment”
Woodside CEO Meg O’Neill said the final investment decision on Louisiana LNG was an “historic moment” for the company.
“Louisiana LNG is a game-changer for Woodside, set to position our company as a global LNG powerhouse and enable us to deliver enduring shareholder returns,” she said.
O’Neill said that the company has secured “quality partners” and is now ready to take FID.
“The project benefits from access to abundant low-cost gas resources in the United States and boasts an asset lifespan of more than 40 years. It also has access to well-established interstate and intrastate gas supply networks,” O’Neill said.
According to O’Neill, 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.”
She said this supply can target “strong and sustained” demand for LNG expected in both Asia and Europe.
Woodside recently signed LNG sale and purchase agreements for long-term supply of LNG to Germany’s Uniper.
Woodside’s Louisiana LNG will supply 1 million tonnes per annum (mtpa) of LNG on a free-on-board basis for up to thirteen years from the commercial operations date (COD) of the project.
In addition, Woodside Energy Trading Singapore will supply up to 1 mtpa of LNG on a delivered ex-ship basis from Woodside’s global portfolio into Europe, commencing with Louisiana LNG’s COD over a term until 2039.
Further equity sell-downs
On top of the Stonepeak deal, Woodside is looking to sell a further stake in Louisiana LNG.
“We are pleased with the strong level of interest from potential strategic partners and are advancing discussions targeting further equity sell-downs,” O’Neill said.
“This will further reduce Woodside’s capital and accelerate the value of Louisiana LNG and is consistent with the approach we have taken with our Scarborough energy project in Australia,” she said.
“As the largest single foreign direct investment in Louisiana’s history, Louisiana LNG will also be the first greenfield US LNG project to go to final investment decision since July 2023,” O’Neill noted.
“Louisiana LNG will support approximately 15,000 national jobs during construction. Woodside appreciates the support Louisiana LNG has received from both the US Federal and Louisiana State governments,” she added.